L’Occitane International, a maker of high-end skin care products, is in final negotiations with Alibaba to open up a virtual storefront on it Tmall site.
The French company is set to open for business on the world’s largest portal to consumers by the end of 2014, reports The Wall Street Journal, though it is still in the final phases of deciding how to best protect its brand’s integrity in the high traffic (but highly discount driven) Alibaba e-commerce ecosystem.
Tmall hosts more than 70,000 sellers and controls nearly half China’s B2C sales. Those sales have been on fire, with a nearly tenfold surge $44.1 billion over the last three years, reports The Journal. Despite the siren song of access to hundreds of millions of highly motivated Chinese consumers—analysts have often cautioned brands, particularly luxury brands, away from Alibaba sites like Tmall—noting that the deep discounting and lack of exclusivity on the platform can have a deflationary effect on a brand’s integrity.
Still, that conventional wisdom is changing, as high-end brands like Burberry are opening up on the Tmall site.
“How can you be serious about e-commerce but not be where much of the population is?” said Vincent Digonnet, executive chairman in the Asian-Pacific region for digital consulting firm Razorfish, reports The Wall Street Journal.