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Tmall won over luxury brands in 2018

Glossy – Tmall, the massive Chinese e-commerce platform, has positioned itself as the gateway between brands from outside of China and Chinese consumers, who are increasingly some of the most valuable and lucrative audiences for luxury brands. Over the course of 2018, Tmall’s effort to lure more luxury brands was proven successful as an accelerating cadre of luxury brands joined the program, culminating with Bottega Veneta, which joined the program on Tuesday.

In August 2017, Tmall launched the Luxury Pavilion, a platform for luxury brands outside of China to sell their goods to Chinese customers without having to build their own infrastructure. At launch, there were only 17 brands on the Luxury Pavilion. Now, just over a year later, that number has snowballed to a total of 82. In the week spanning the end of November and the beginning of December, the program gained two new, big names in the luxury space: Ermenegildo Zegna and Valentino. Tmall celebrated the launch of Valentino by debuting its new computer-generated “digital influencer,” Noonoouri, wearing a Valentino outfit.

“Many Western luxury brands are joining Tmall’s Luxury Pavillion, and for good reasons,” said David Naumann, vp of marketing at BRP, retail consulting firm. “The China market is the single largest market for luxury goods in the world, as it currently accounts for a third of all luxury goods worldwide, and that percentage will continue to increase. Luxury brands can’t ignore this massive market. Tmall’s Luxury Pavillion is the top online location for China’s luxury shoppers.”

Naumann pointed to recent stats, like online sales accounting for 25 percent of all luxury sales by 2025, as evidence that Tmall is in a good place to capture more luxury sales.

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From Conspicuous to Conscious, the Definition of Luxury Evolves

Sourcing Journal – Bleecker Street in New York City’s West Village neighborhood was once an epicenter of luxury retail
with a disproportionate number of Marc Jacobs storefronts, a destination for tourists and local
shoppers alike. That is, until roughly 2017, when most of the clothing retailers located in the area
shuttered thanks to high-rent blight.

Today, the area is seeing a new kind of luxury retail staking its claim on the famed street. Naadam, a
three-year-old mid-priced luxury cashmere brand, just open a new, permanent retail location there,
representing a reinvention of both Bleecker Street and, more generally, the definition of luxury.
Naadam is but one of a handful of newer brands leading the charge toward a new luxury: Denham
focuses on premium denim materials; Edun supports African trade with its mission-based philosophy;
Cuyana ethically sources Chinese silks and prioritizes philanthropy for abuse victims.

“The products end up being timeless, and I think that’s the key on the brand side,” said Ken Morris,
principal at Boston Retail Partners retail consulting firm. “If you can create a timeless product, it doesn’t matter
when it’s purchased, and instead it becomes an investment in clothing.”

To call these nascent brands disrupters is perhaps a bit premature, though they’re certainly influencing
consumer perceptions of what it means to shop responsibly, as well as industry standards for
sustainability. In a $1.4 trillion luxury goods market, European conglomerates may not yet feel the pain
or pressure brands like Naadam and KOTN do, but Morris says they’d better take note because young
and mature shoppers alike have become more aware of what’s going on.

“As more people enter that luxury market, they are more socially conscious, focused on more of a social
mission and they want to know their product isn’t being made by underage children in Pakistan, or
they want to know the wood they buy for furniture isn’t stripped from a forest in the northwest United
States,” Morris said.

“Plus, [the big European houses] would be crazy not to invest in this space,” he said. “As those older
brands age, so to speak, this new blood is invigorating the older houses to change things up a bit.”

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From Conspicuous to Conscious, the Definition of Luxury Evolves (.pdf)
From Conspicuous to Conscious, the Definition of Luxury Evolves (Web – subscription required)