Tag Heuer on Tmall
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Swiss watchmaker Tag Heuer has launched a flagship store on Tmall.
The opening of Tag Heuer on Tmall takes to five the number of LVMH units to have a presence on the Alibaba-owned site.
The launch is the latest sign of luxury goods makers, faced with slower sales in the once-hot China market, embracing new sales channels and digital marketing in an attempt to reach the country’s internet savvy younger generation.
Leo Poon, Tag Heuer’s GM for Greater China, called the move “a right decision, since Tmall is the largest B2C platform in China and can help us to reach our target customers.” More than 75 per cent of Alibaba users are 35 years old or younger. The company’s China retail marketplaces had a total of 443 million annual active buyers as of December 31.
China’s share of the global luxury goods market declined slightly from 31 per cent to 30 per cent in 2016, according to a recent report released by consulting firm Bain. But the country remains an engine of growth for luxury goods as China’s middle class continues to increase in size and purchasing power. Tighter government controls on “grey market” imports are bolstering domestic consumption through legitimate sales channels; meanwhile, online shopping in China grew a brisk 26 per cent last year, according to China’s National Bureau of Statistics.
Against this backdrop, luxury good makers are targeting a younger demographic through digital sales and marketing strategies.
“If you want to win the future, you should establish a relationship with the young generation early,”
“If you want to win the future, you should establish a relationship with the young generation early,” said Liu Xiuyun, general manager of Tmall’s apparel division. “Confronted with the internet and e-commerce, conservative luxury brands will lose the future in China.”
Tmall is not only a sales channel, Liu added. Because it is part of Alibaba’s online ecosystem, which includes mobile apps, social media and entertainment portals, merchants can engage consumers where they live online. Alibaba also has a wealth of data allowing merchants to more precisely target and cultivate individual customers as well as predict general consumption trends, “and this is exactly what luxury brands are looking for,” Liu said.
In addition to Tag Heuer, other LVMH flagship stores on Tmall are cosmetics brands Make Up For Ever and Guerlain, beauty brands retailer Sephora and premium luggage brand Rimowa.
LVMH’s venerable Louis Vuitton label has also partnered with Alibaba. Last year, Louis Vuitton invited members of Alibaba’s exclusive Apass Club – online shoppers who spend an average of $45,000 a year in Alibaba marketplaces – to visit the company’s headquarters in France. In addition, Louis Vuitton became one of the first international brands to join Alibaba’s recently launched Big Data Anti-Counterfeiting Alliance, an organisation set up to share industry and technical know-how in order to combat the online sale of counterfeit goods.
At a February 13 ceremony marking the opening of their Tmall store, Tag Heuer unveiled a pair of his-and-her watches, priced at $,852 for both, as a special Valentine’s Day promotion in China. The launch ceremony, broadcast via Tmall’s mobile app, featured a livestream of Chinese actress Song Jia.
-Susan Wang
Questions & Answers
Q.Why has Tag Heuer opened a flagship store on Tmall now?
Why has Tag Heuer opened a flagship store on Tmall now?
Luxury brands face slower sales in China and are using new digital channels to reach younger consumers. Tmall is China's largest B2C platform, providing access to a young, internet-savvy demographic that Tag Heuer aims to target for future growth. Online shopping is also growing rapidly in China.
Q.How many LVMH brands are now present on Tmall?
How many LVMH brands are now present on Tmall?
With Tag Heuer's launch, five LVMH units now have a presence on the Alibaba-owned site. These include cosmetics brands Make Up For Ever and Guerlain, beauty retailer Sephora, and premium luggage brand Rimowa. Louis Vuitton has also partnered with Alibaba.
Q.How is Tmall more than just a sales platform for luxury brands?
How is Tmall more than just a sales platform for luxury brands?
Tmall is part of Alibaba's wider online ecosystem, including mobile apps and social media, allowing merchants to engage consumers across various platforms. Alibaba's data capabilities also help brands precisely target customers and predict consumption trends, which is valuable for luxury brands.
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