Alibaba to introduce luxury portal in order to attract high-end brands
Alibaba, the Chinese e-commerce giant, said it will launch a “luxury pavilion” for high-end products within its Tmall marketplace, as Digiday reports. The launch of the portal is part of the giant’s plan to entice more brands to sell on its marketplace.
At the moment, only 21% of fashion labels have a store on Tmall, according to Business Insider. Alibaba has been struggling for a while to attract luxury brands. By separating luxury goods into their own portal, the company hopes it can convince brands that selling them on Tmall doesn’t cheapen their image. Alibaba has also enlisted machine learning that will make the luxury pavilion available to those who are likely to purchase a luxury item, in order to heighten the sense of exclusivity.
The general public sees Alibaba as a home for knockoffs, which is why the company is making new efforts to counter this perception. Kering, owner of several luxury brands like Gucci and Saint Laurent, has dropped its lawsuit against the e-commerce giant and decided to join it in its fight against counterfeit sellers, according to Bloomberg. Thiss kind of efforts might convince other brands to sell their products on Tmall.
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Apart from trying to combat its image as a home for counterfeit, Alibaba might also make these changes as a response to JD.com’s focus on luxury goods and affluent consumers. JD.com is the second largest e-commerce site in China and has been growing faster than Alibaba lately. The main reason is that JD.com has focused on affluent consumers, after having invested in luxury e-retailer Farfetch. Alibaba has been rumoured to be interested in Yoox Net-A-Porter; however, there is no deal between the two at the moment so the company might battle JD.com in the luxury market might on its own.
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