Alibaba continues to make powerful in-roads in luxury with Kering’s Alexander McQueen
Chinese tech titan Alibaba has something its western counterpart, Amazon, doesn’t: a burgeoning foothold in the luxury sector. Alibaba (along with JD.com, which is also held in Dominion’s Ecommerce Fund) is seeing more and more of the world’s most prestigious luxury brands selling on its platform. Last week, French luxury giant Kering became the latest to add goods to Alibaba’s Tmall site: high-end designer Alexander McQueen’s eponymous brand.
Alibaba’s share price has risen by 33% year to date
Source: Yahoo Finance
LVMH is the world’s largest luxury company, and a few years ago, its chief financial officer made his view on Amazon very clear, saying: “the existing business of Amazon doesn’t fit with luxury, full stop.” Nothing seems to have changed in that regard – LVMH, Kering, and other big names in the luxury sector still snub Mr. Bezos’ online everything shop. But the problem doesn’t seem to be Big Tech itself – in China, most of them are building a presence through Alibaba and JD.
Valentino, Bottega Veneta and Burberry are all on the Luxury Pavilion section of Alibaba’s Tmall platform. And they’re not the only ones: luxury participation is growing. According to ecommerce publication pymts.com: “in 2018, 26 percent of tracked luxury fashion brands had a store on Tmall, an increase of 7 percent from 2017.”
Partly, this is down to Chinese consumers, who prefer third-party sites, and who are distinct from western counterparts in two important ways: first, they’re even more geared up to online retail and other techy pursuits, and second, they are responsible for driving global luxury consumption. But it might also say something about Alibaba, which, unlike Amazon, has worked hard to court the luxury sector. Just last week, for example, Alibaba won an award for intellectual property protection from the Luxury Law Alliance.
At the time, Matthew Bassiur, Alibaba’s vice president and head of global intellectual-property enforcement, said: “I’m honoured to receive this prestigious award representing Alibaba, and we thank the Luxury Law Alliance for its recognition of our IPR protection efforts. Through meaningful collaboration and continuous innovation, we are achieving great success together with industry stakeholders. We have come far, but there is still much to do. We are all part of the solution and our past accomplishments in IPR protection are just the beginning.”
Dominion holds Alibaba and JD.com in its Global Trends Ecommerce Fund.
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