In an unusual move that highlights what a force Alibaba has become on the global eCommerce scene, British luxury brand Burberry has opened a virtual storefront on Alibaba Group Holding Ltd.'s Tmall shopping site.
The move allows Burberry to stake its claim in the highly lucrative and exploding Chinese eCommerce scene while at the same time combatting the grey market that luxury brands like Burberry face in China. Luxury goods are often bought outside of China at a lower rate and then resold at a profit within the east-Asian country.
Tmall houses 70,000 sellers and controls nearly half of China's online retail sales.
"The new tie-up is a first for any luxury brand and reflects a shared commitment to offering Chinese consumers the best in luxury experiences across all of Alibaba Group's platforms," Burberry said in a statement.
The move also benefits Alibaba, which is seeking Western partnerships in advance of its planned U.S. IPO later this year. Not everyone is supportive of the move.
"Luxury brands rely on exclusivity, so I don't see why they would lower themselves and have a store on Tmall," said Yujun Qiu, an analyst at Planet Retail, a research firm, reports The Wall Street Journal.
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