Global fashion brands have been slow to embrace Tmall, but luxury automakers have been less fearful as Chinese demand for online car sales takes off.
More than half of the luxury auto brands benchmarked in L2’s new China: Luxury Auto Insight Report maintain an official Tmall shop, including Audi, Mercedes-Benz, and Maserati. Out of 18 total brands benchmarked, 10 have Tmall e-flagships and eight use them to sell vehicles.
As luxury companies across all sectors remain concerned that Tmall may be too mass-market for their brand DNA, high-end automakers on the platform are focused mainly on accessible luxury. With the exception of ultra-luxury carmaker Maserati, all of the luxury auto brands currently selling on Tmall fall into the accessible category. They’re also opting to use the platform to sell their most mass-market models: Mercedes-Benz, for example, only sells its Smart cars on the platform. L2 finds that Geely-owned Volvo dominates among benchmarked brands with five out of the top 10 best-selling models on the site.
The emphasis on using Tmall for accessible luxury extends beyond the auto sector. The percentage of luxury auto brands with Tmall shops is still below that of beauty brands, which have a 73% adoption rate among prestige names. Meanwhile, less than one-fourth of luxury fashion labels and less than one-third of luxury watch and jewelry brands are on the platform.
Despite fears of brand dilution, luxury automakers that are willing to adopt online sales early can benefit from several key advantages. Maserati, for example, joined Tmall in order to reach customers in lower-tier Chinese cities where the brand isn’t available at local dealerships. In addition, Chinese consumers show the highest demand in the world for purchasing cars online—a recent survey found that 77% would be willing to do so. As auto brands weigh the pros and cons of setting up shop online in China, it will pay off to remain ahead of the curve digitally with consumer demand.