Following the launch of two Helena Rubinstein luxury beauty shops in China, on Dec. 25, Giorgio Armani also announced that it would launch a trial operation on Tmall, Alibaba’s online shopping platform. The store will officially launch Jan. 16, 2018, on trend with an increasing amount of Western luxury brands entering the Chinese market.
Compared with brick and mortar stores, Tmall’s consumer demographic is 5-10 years younger, the same group that accounts for a large part of retail consumption in China.
Luxury goods, whose prices fall between RMB 2000-5000 (about USD 300-750), are favorites of Tmall’s consumers. CBNweekly reported that teenagers ages 20-25 are major consumers of luxury items in China. Consumers under the age of account for 60% of CPB’s online consumers.
According McKinsey & Co research, 80% of Chinese luxury stores are concentrated in the top 15 cities by GDP, but only of 25% consumers who buy luxury goods live in these cities. It is obvious that store coverage and consumer demand are disproportionate. Due to increasing brand awareness in Chinese second and third-tier cities, it is important to cooperate with Tmall, JD, and other major e-commerce platforms that make luxury goods accessible to consumers outside of the biggest cities.
In addition to opening an online store on Tmall, Giorgio Armani will also start its business at Luxury Pavilion, Tmall’s Luxury platform. As the world’s first virtual platform exclusively for luxury brands, Luxury Pavilion provides customized service and has five hundred million consumers making it a good platform for luxury brands to enter the Chinese market.