ALIBABA’S e-commerce platform for premium and luxury brands Tmall is taking an innovative approach to enhancing the user experience of their high net worth clients by banking on the lure of exclusivity, a highly important element for China’s ultra-wealthy.
The new platform called the “Luxury Pavilion” will be an invite-only platform that will stock the cream of the fashion crop, including clothing, watches, beauty and cosmetic products – even cars – from some of the world’s biggest names, such as Burberry, Hugo Boss, Maserati, Guerlain and Zenith.
App Update: Tmall adds luxury 'Pavilion' feature for select users pic.twitter.com/4FwOFmaNiF
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All these products are already available on Tmall, but the Luxury Pavilion will make some products exclusive to a handful of consumers culled from the wealthiest consumers off Tmall. Only users who have a specific level of wealth, or are APASS members – a list of the top consumers based on annual purchasing records – will be able to see the Pavilion entry point on the Tmall website, reports Jing Daily (JD).
“Exclusivity is key to this project,” Nordey said to JD, “hence the invitation-only business scheme to onboard luxury brands on the platform.”
Alibaba is locked in a battle with its close local rival, JD.com, who recently launched a premium shopping brand in partnership with exclusive British platform, Farfetch. JD.com invested heavily in the platform, sinking US$397 million into a project that has already claimed some successes, such as a partnership with prominent French label, Saint Laurent.
Both Alibaba and JD.com will be looking to edge each other out in the increasingly competitive e-commerce space, and Alibaba is already fighting on multiple fronts in the online-to-offline (O2O) segment. Rival group buying company, Meituan Dianping, just announced a potential US$5 billion fundraising round in order to bolster its efforts against Jack Ma’s tech giant.
In 2015, Alibaba was already taking steps to begin competing in the luxury e-commerce space when it invested in Mei.com, a flash sales luxury site. Some of Mei.com’s team will be joining the Tmall team to prepare for the launch of Luxury Pavilion, according to JD.
The new platform has two goals in mind: totally overhaul and personalise customers’ shopping experience, and act as a testing ground for Alibaba’s new e-commerce technologies aimed at dominating the O2O segment.
Alibaba revealed to Alizila, its company news website, that the user experience on Pavilion will be like nothing ever seen by consumers on Taobao and the current iteration of Tmall. Instead, Pavilion is going to go highly granular when it comes to personalizing homepages, product recommendations, brand pages, exclusive VIP awards and post-purchase customer service, to make for a truly customized shopping journey.
Artificial intelligence and big data frameworks embedded into the very infrastructure of the Tmall site will allow the company to analyze traffic data and pull specific insights into their most prized clients. High net worth users tend to prize service that is highly specific to their individual experience, and Alibaba will be looking to capitalize on this fact in order to gain further insight on the relationship between big data insights and customer behavior.
Likely Pavilion will provide the perfect testing ground for Alibaba to see how it can provide customized experiences in a small, controlled group. Perhaps we could even see such technologies being opened up to the everyday Taobao customer in future.
Furthermore, the Pavilion’s tailored experience technology could potentially drive up advertising and branding revenues for Alibaba as well. The main currency of luxury brands is their ability to be highly specific when it comes to the demands of their customers, and so Pavilion’s offerings are in perfect alignment with the exclusivity of haute couture labels. The platform will give brands the marketing and branding tools it needs to engage with rich clients on a deeper level, and eventually turn those digital experiences into tangible sales.
“Luxury brands increasingly want to use new retail technology and consumer insights to connect with younger consumers, as well as drive business-model innovation,” Liu Xiuyun, head of Tmall’s fashion unit, said in a statement.
Aside from big data insights, Pavilion will also be integrated with interactive technologies, such as augmented reality (AR) and virtual reality (VR) capabilities to mimic the experience of visiting a real store.