Tmall’s head of luxury breaks down metaverse technologies that are changing the way Chinese consumers shop
From livestreaming to social commerce, China has been at the forefront of digital shopping innovations.
Now, Alibaba’s Tmall Luxury Pavilion, the Chinese e-commerce platform, is stepping it up with a series of digital upgrades in the metaverse starting with an AR fashion show earlier this month in honor of its fifth anniversary, according to a release.
- Instead of supermodels, the show featured “super mascots” from a range of luxury brands that walked down the “virtual runways” wearing items from the collection. Viewers were also allowed to take selfies with the mascots.
- “From 2019 to 2021, Luxury Pavilion has seen its customer base grow over 150% with sales increasing nearly 300%,” the company revealed.
Alibaba’s initiatives also come at a time when several luxury labels are already experimenting with the metaverse, which Janet Wang, head of Alibaba’s Tmall Luxury division, said has been ahead of before it even “became a buzzword.”
“So far, more than 100,000 consumers have visited our AR show online,” she told Retail Brew in an email. “We believe it’s critical for brands to interact with consumers multi-dimensionally through new digital technologies.”
- These technologies also include a “Meta Pass” that offers customers priority access to brands such as Burberry and Max Mara.
- The “digital warrants” that are certified on the blockchain could also be treated as digital collectables, Wang added.
- For instance, a shopper could exchange these warrants for limited-edition items, such as Max Mara’s oversized sweater from its fall/winter 2022 collection, Burberry’s Lola bag, or fleece-lined sneakers from Marni. “Within a few days of our Meta Pass launch, 10,000 Meta Passes were collected by consumers—a milestone we hit sooner than expected,” Wang said.
Over 20 luxury brands have released digital art collectibles via Tmall Luxury Pavilion to date, according to the company. There are also some VR try-ons and digital art exhibitions in the works.
Locked up, but online: And while the innovations have helped luxury brands in China keep up with—or in some cases, stay ahead of—digital trends, it has also been a critical strategy as China deals with near-constant lockdowns that have limited consumer access to physical retail.
“This strategy was crucial to keeping Chinese consumers engaged during lockdowns,” Wang said, adding that when luxury gifting became an important trend during the pandemic, jewelry brands such as Piaget and Bulgari also turned to digital gifting tools as an alternative. “Overall, we see more consumers than ever before investing in upmarket goods, with strong demand for luxury products, particularly items that keep their value, such as jewelry, watches, and home decor,” she explained.
“In general, Chinese consumers, who are digital natives, adopt these new technologies and shopping experiences faster than their Western counterparts,” Wang said. “In 2021, the number of consumers on Tmall Luxury Pavilion grew 153% from 2019, and gross merchandise volume on the platform rose 309%.”
Ground rules: Still, while digital strategies are integral to tapping into the Chinese market, brands that have been most successful under the Tmall umbrella have embraced a more omnichannel approach.
“Brands that perform well on Tmall Luxury Pavilion are quick to think about how they can best service their customers, both offline and online,” Wang told us, pointing to Burberry, one of the first luxury brands to join Tmall Luxury Pavilion, as an example.
“Burberry has worked with Tmall Luxury Pavilion to release digital collectables five times in the last year, receiving outstanding consumer engagement and feedback each time,” she said.
As for those luxury brands still looking to get into the Chinese luxury game, Wang has some specific pointers. “Understanding the Chinese consumer and localization is key,” she told us. “And getting to know Chinese consumer behaviors and expectations can help brands plan their merchandising strategy and deliver the right level of customer service.”—JS