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    Luxury Brands in Chinese Online Retail

    5/8/19 | 9:00 AM time

    Gartner L2: Why TMall can market high-end labels that Amazon can't

    Gartner L2, a market research company, analysed how the Chinese online retailer T-Mall, a subsidiary of the Alibaba Group, operates in the beauty segment. The analysis shows that the Chinese supplier sells lots of premium brands - something that its American counterpart Amazon often fails to do.

    Premium Cosmetics on TMall

    According to the latest Gartner L2 report, TMall has established itself as a supplier of premium cosmetics in China. Some 86 per cent of the premium labels analysed have their own shop on the website. High-end brands like Estée Lauder or Givenchy Beauty are found in a special shop area, called Luxury Pavilion. This exclusive area requires an invitation and is thus clearly distinguishable from other offers. Out of the fifty labels examined in the study, 16 were already included in the Luxury Pavilion in 2018, whereas only eleven were included in 2017.

    Luxury Pavilion Advantages

    According to Gartner L2, the online provider's exclusive department enhances the visibility of each brand. This means that no luxury brand is in danger of fading into the background or appearing next to products of lower quality due to the usual abundance of products within the layout.

    TMall also offers brands the opportunity to set up a loyalty programme for their customers, launch multimedia campaigns and even run their own live streams on their account. The online visibility also serves as another platform for omnichannel marketing.

    To date, 78 per cent of the premium brands have launched a loyalty programme. They are even more successful in doing so than normal labels, according to Gartner L2: only about 19 per cent of conventional brand customers actively use the programme, compared to 36 per cent in the premium segment.

    Source: Gartner L2, photo: Adobe Stock / leungchopan

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