Alibaba Expands Into The French Luxury Market.
Chinese e-commerce giant Alibaba has created a partnership with the Frence government in order to promote French brands in a new deal that is most aimed towards courting more high-end companies.
According to a report done by Xinhua, the top Chinese-tailer’s three-year memorandum if understand (MOU) signed during Friday with France is aimed towards encouraging new French brands to sign up by providing them with express enrollment, brand promotion, and marketing support on Tmall. The was signed between Alibaba Founder Jack Ma and Frence Foreign Minister Laurent Fabius, who has stated that it, “will significantly widen the choice of French products available for Chinese consumers who will enjoy their well-deserved reputation of high quality and security.”
Tmall has already garnered a significant number of French brands on its site, as part of this recent deal, the platform has launched a one-week “Elegance of France” campaign during May 19 so they can highlight more than 30 flagship stores that are owned by French companies on the site.
This agreement will most likely be aimed towards pushing an upscale image and alluring luxury brands, which have become wary about opening their shops onto Tmall due to its discount-driven business model and are worried that it might lead towards diluting their brand image. While the British label Bruberry may be the only foreign luxury brand on the site after its Tmall shop launched a couple of weeks ago, plenty of French beauty brands such as L’Oreal and Clarins have already begun to actively sell on Tmall.
Another reason for this high-end push will most Alibaba’s need to attract foreign investors with its recent IPO announcement. While its B2C Tmall and C2C Taobao e-commerce site have thrived off many transactions of cheap, imitation luxury goods, the company has made a collaborative effort to show that its combating against fakes and plans to profit of legitimate business.
During the previous week, it announced that it had streamlined its process for dealing with counterfeit goods and had begun automatically removing products flagged as fake. According to Jack Ma, the MOU serves as ”an example how Alibaba Group can work hand-in-hand with foreign trade entities to expand global cross-border trade in order to benefit both global businesses and Chinese consumers through our marketplaces.”
If Tmall cannot convince upscale brands that they will not lead to the ruination of their luxury image by listing on their site, Alibaba appears to have a backup plan in place with its investment with the American site known as ShopRunner and agreement to help the site distribute into China. While ShopRunner has a similar format to that of Tmall, it claims more prestigious brands, and may become a main compromise for storied luxury brands nervous about leaping into China’s e-commerce market.