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With unprecedented levels of unspent inventory, diminished sources of revenue and consumers closing their wallets, Tmall – China’s largest e-commerce platform attached to the Alibaba Group – acted with a sense of urgency. The Chinese giant just announced the launch of its new “Luxury Soho” Outlet to enable high-end brands to offer their merchandise at discounted prices and thus increase their digital footprint in post-Covid-19 China.
In the context of the VIDOC-19 crisis, many global players of the luxury sector have faced problems of overstocking but also of drastic reductions in their activities and profits.
Faced with these difficulties, China, the world’s largest luxury market, tried to come to their rescue, helped by an early resumption of its activities.
Tmall, the Chinese e-commerce site belonging to Alibaba Group Holding Ltd. launched “Luxury Soho” on Monday 20 April, a new store format enabling luxury brands to sell their goods at lower prices, in the wake of Luxury Pavilion e-store, already launched by Tmall in 2017.
“In the future, luxury brands will be able to open two different types of stores at Tmall. Official flagship stores that focus on the seasonal new products will remain on Luxury Pavilion, and official retail stores that focus on discounted products will be able to be placed on the Luxury Soho site.” said Weixiong Hu, Vice President of Alibaba and General Manager of Tmall’s Apparel Fashion Business Unit.
The new outlet, named after New York’s trendy SoHo district, will allow luxury brands to offer their products at competitive prices while protecting their high-end image, according to a report by Alibaba, but also to benefit from a new source of income as they will be able to liquidate stocks that have accumulated due to the coronavirus pandemic.
In addition, this new channel will maximize the life cycle of luxury products because while Luxury Pavilion will highlight the emblematic products of the new collections, Luxury Soho will provide access to all kinds of items, thus resisting seasonal cutbacks. “Luxury brands have a specific lifespan. Tmall, as the main platform for the digital exploitation of luxury partners, offers various solutions for different scenarios. “continues Weixiong Hu.
With severe sales disruption and consumer spending reduction forecasts, this chain therefore appears to be a great alternative, a way for luxury retailers to get their heads above water after COVID-19.
Seduced, the American brand Coach was one of the first brands to join the chain, offering discounts of up to 70% on its range. “This strategic cooperation with Tmall will help us establish a deep bond with Chinese consumers and show them Coach’s unique brand image, products and experience.” said Yann Bozec, CEO and President of Coach China.
Several other brands are hoping to benefit from this and will join the chain, including Emporio Armani, Giuseppe Zanotti, Hugo Boss AG, Versace, Diesel, La Perla and Calvin Klein.
After the global trauma of COVID-19, the luxury brands also hope to raise awareness of environmental and sustainability issues.
While few of them were willing to sell their unsold stock at a discount before the pandemic (companies like Burberry even went so far as to destroy their unsold stock to prevent it from being sold at low prices), luxury brands now see stock reduction as a way of getting back to business; the luxury group Kering recently declared that it will reduce its prices on seasonal products in the course of 2020.
Faced with a change of era and new realities, the new Luxury Soho chain could therefore be an ideal solution for luxury conglomerates: a way for them to sell their unsold products without diluting their identity, to increase their profits, to accelerate their digital transformation but also to conquer the much revered Chinese luxury market.
An excellent opportunity especially for the Tmall trading platform, which wants to turn it into a formidable digital distribution channel: a meeting place for fashion lovers, but also for the more price-sensitive Millennials and Gen Z shoppers.
Read also > Why fashion and luxury brands should continue to rely on e-commerce despite crisis
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With unprecedented levels of unspent inventory, diminished sources of revenue and consumers closing their wallets, Tmall – China’s largest e-commerce platform attached to the Alibaba Group – acted with a sense of urgency. The Chinese giant just announced the launch of its new “Luxury Soho” Outlet to enable high-end brands to offer their merchandise at discounted prices and thus increase their digital footprint in post-Covid-19 China.
In the context of the VIDOC-19 crisis, many global players of the luxury sector have faced problems of overstocking but also of drastic reductions in their activities and profits.
Faced with these difficulties, China, the world’s largest luxury market, tried to come to their rescue, helped by an early resumption of its activities.
Tmall, the Chinese e-commerce site belonging to Alibaba Group Holding Ltd. launched “Luxury Soho” on Monday 20 April, a new store format enabling luxury brands to sell their goods at lower prices, in the wake of Luxury Pavilion e-store, already launched by Tmall in 2017.[/vc_column_text][vc_cta h2=”This article is for subscribers only.” h2_font_container=”font_size:16″ h2_use_theme_fonts=”yes” h4=”Subscribe now!” h4_font_container=”font_size:32|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”I SUBSCRIBE!” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true”]Unlimited access to all the articles and live a new reading experience, preview contents, exclusive newsletters…
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With unprecedented levels of unspent inventory, diminished sources of revenue and consumers closing their wallets, Tmall – China’s largest e-commerce platform attached to the Alibaba Group – acted with a sense of urgency. The Chinese giant just announced the launch of its new “Luxury Soho” Outlet to enable high-end brands to offer their merchandise at discounted prices and thus increase their digital footprint in post-Covid-19 China.
In the context of the VIDOC-19 crisis, many global players of the luxury sector have faced problems of overstocking but also of drastic reductions in their activities and profits.
Faced with these difficulties, China, the world’s largest luxury market, tried to come to their rescue, helped by an early resumption of its activities.
Tmall, the Chinese e-commerce site belonging to Alibaba Group Holding Ltd. launched “Luxury Soho” on Monday 20 April, a new store format enabling luxury brands to sell their goods at lower prices, in the wake of Luxury Pavilion e-store, already launched by Tmall in 2017.[/vc_column_text][vc_cta h2=”This article is for subscribers only.” h2_font_container=”font_size:16″ h2_use_theme_fonts=”yes” h4=”Subscribe now!” h4_font_container=”font_size:32|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”I SUBSCRIBE!” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true”]Unlimited access to all the articles and live a new reading experience, preview contents, exclusive newsletters…
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