With VIP personal shoppers and sales of $140,000 watches, Richemont-owned Net-a-Porter is famous for pushing the limits on just how exclusive luxury e-commerce can get. In contrast, Alibaba’s Tmall platform is a place where China’s shoppers can score deals on everything from diapers to rice cookers. While these two e-tailers may not seem like the most likely partners, the importance of China’s luxury market has brought them together.
Last week Net-a-Porter and Alibaba announced a new joint venture, which will include the creation of new men’s and women’s mobile apps as well as an official Net-a-Porter Tmall shop. This linkup could help Net-a-Porter become more competitive in gaining resonance in the China market, where the platform trails both foreign and local multi-brand luxury e-tailers in web traffic, according to Gartner L2’s Digital IQ Index: Luxury China.
The luxury site’s “digital offering in China is in its infancy,” said Richemont’s chairman in a joint release with Alibaba announcing the deal, highlighting the need for more visibility in the market. The Yoox Net-a-Porter Group stated it was looking for Chinese partners earlier this year after the company was taken over by Richemont.
Net-a-Porter isn’t the first foreign high-end e-tailer adjusting its China strategy to work with a local e-commerce giant. While LVMH’s Sephora generally focuses on maintaining control over its distribution, it has launched official shops on both Tmall and its rival JD.com in the China market. And the UK’s Farfetch sees its China logistics carried out by JD.com after the Chinese company purchased a stake in the unicorn luxury e-tailer.
While Tmall may be a mass-market platform, Net-a-Porter’s launch isn’t entirely equivalent to setting up shop on Amazon in the United States. Its store will be available through Tmall’s Luxury Pavilion, an invitation only in-app platform created last year as part of Alibaba’s push to court luxury brands.
Net-a-Porter’s new mobile apps will likely rival JD.com’s standalone Toplife luxury app, which was also created last year and has hosted sales by brands including Fendi, Alexander McQueen, and Saint Laurent.
The Net-a-Porter Tmall partnership provides another online distribution choice for brands in China’s luxury market, which includes options like pure-play e-tailers, WeChat, and DTC commerce. In the beauty space, 82% of prestige cosmetics brands analyzed in Gartner L2’s Beauty China report have opted to sell directly through Tmall shops, where they have more control over how their products are marketed.
But Net-a-Porter’s existing relationship with luxury brands could prove more useful for Tmall. Gartner L2’s report finds that 26% of luxury fashion brands and 37% of watch and jewelry brands now have official Tmall stores. Many luxury brands—like Gucci—remain wary of China’s mass e-tailers due to concerns around brand equity and counterfeits. Alibaba has stated the the site’s entire roster isn’t guaranteed to be available, so it is yet to be seen which brands will be signing on.