Is e-commerce and social media the next big frontier for luxury fashion? Alibaba’s Tmall carries Cartier and partners with Net-a-Porter, and JD.com with Farfetch – but Amazon falls short

Mar 28 , 2022

What are the leading platforms in the new digital frontier in luxury? Illustration: James Stewart

Tmall’s Luxury Pavillion and JD.com have both onboarded over 200 luxury brands, including Balmain, Bottega Veneta, Cartier, Louis Vuitton, Prada and Armani

JD.com also works with Farfetch and luxury conglomerates Richemont and Kering – but Amazon is behind, with less than 50 brands including Oscar de la Renta

Amazon, Alibaba, TikTok, WeChat. These are just some of the biggest and most dynamic companies of today that are probing an uncertain new digital frontier in luxury.

Traditionally reluctant to go online, and usually confined to proprietary websites or multi-label e-commerce specialists like Net-a-Porter and Farfetch, the luxury industry has been expanding its digital footprint in recent years by actively seeking new partners. Online marketplaces such as Amazon, Alibaba’s Tmall (Alibaba is also the owner of the South China Morning Post) and JD.com are racing to carve themselves as big a niche in luxury e-commerce as possible, while the rapid growth of social commerce, through media platforms such as Instagram, TikTok, WeChat and Xiaohongshu (also known as Little Red Book and similar to Instagram), is a further significant potential engine for growth.

The winning strategy to digital luxury is to have a delicate balance of wide audience reach, robust branding opportunities and a seamless purchasing experience. Illustration: James Stewart

The ultimate winning strategy is likely to hinge on a delicate balance of wide audience reach, robust branding opportunities and a seamless purchasing experience.

“Luxury brands want to meet their new customers where they are,” says Dr Thomaï Serdari, founder of luxury branding consultancy Brand(x)Lux and adjunct professor at the New York University Stern School of Business. “If that means embracing a platform that has more of a mass appeal, they have to consider it.”

Considering that Alibaba’s Tmall has some 53 million average active monthly users, while JD.com has 205 million and Amazon’s Prime membership has over 200 million subscribers, the platforms’ access to consumers is not in question.

Despite this, each of these three major players has experienced different levels of success. Tmall’s Luxury Pavilion and JD.com have both onboarded more than 200 leading luxury brands, with Tmall bagging the likes of Balmain, Bottega Veneta and Cartier, and JD.com inking deals with Louis Vuitton, Prada and Armani. Tmall, as the first to launch luxury e-commerce in 2017, has an existing relationship with Net-a-Porter too. JD.com recently entered into a partnership with luxury e-commerce specialist Farfetch, and luxury conglomerates Richemont and Kering. Amazon, on the other hand, has fewer than 50 brands in its luxury stores, none of which have the same luxury cachet as the ones its Chinese rivals have bagged: its most luxurious brand being Oscar de la Renta.

Amazon has fewer than 50 brands in its luxury stores. Photo: Amazon

Amazon’s lacklustre performance can, according to Serdari, be partially attributed to its reputation for deep discounting and questionable product quality – exactly the kind of negative branding luxury brands try to avoid. On the other hand, Tmall’s Luxury Pavilion is an aspirational brand in itself, and thus able to convey the luxury association desired by brands on its platform. “The main question,” she adds, “is how can brands overcome the challenge of delivering not only product over these platforms but also a consistent brand experience”. Branding is, after all, fundamental to a luxury marque’s appeal.

Tmall and JD.com both have a similar strategy, allowing brands to create a store-in-store experience unique to each label – much like a boutique in a luxury mall. On these platforms, brands maintain total control over the visual experience and content available to the customer, while the channel partner takes care of everything from digital infrastructure support to supply chain and last mile fulfilment services. For both Tmall and JD.com, this even includes white glove delivery, to ensure that consumers can enjoy the full luxury experience and brands can rest assured of the quality of service.