Luxury brands are selling more and more on Chinese eCommerce sites like JD.com and Alibaba, while still keeping their distance from Amazon, according to a report in The Wall Street Journal.
French multinational luxury goods conglomerate LVMH’s finance chief made his views on Amazon clear in 2016 when he said “the existing business of Amazon doesn’t fit with luxury, full stop.” The idea of being listed along with batteries and windshield wiper fluid is not one that attracts luxury brands, the Journal reported.
However, Valentino, Bottega Veneta and Burberry can all be found in the Luxury Pavilion section of Alibaba’s Tmall site. Participation in the site is growing every year, and in 2018, 26 percent of tracked luxury fashion brands had a store on Tmall, an increase of 7 percent from 2017.
Even online luxury outlets are partnering with Chinese giants, as Farfetch merged its business in China with JD.com’s luxury platform earlier this year, and the parent company of YOOX NET A PORTER inked an agreement with Alibaba in 2018.
The move is partly due to China’s shopping habits, as many Chinese consumers prefer third-party sites that offer a multitude of brands. This approach can be challenging for luxury brands, which prefer to sell through their own platforms. Shoppers in China also like to use apps, and Alibaba and JD.com are on the cutting edge with their technology. There is also a huge growth opportunity for luxury brands in the country, as only 5 percent of luxury purchases are made online in China.
Amazon, for its part, has not catered to luxury the way Alibaba and JD.com have, by offering separate platforms focused on luxury purchases. Alibaba has an algorithm-driven, invite-only club for loyal members who spend lots of money, and luxury purchases on JD.com are delivered by men wearing white gloves who are “well-educated.”