High End Brand Enters Tmall To Defend Its Image Against Illegal Sale

Foreign media said that the French skin care brand L'OCCITANE (L'Occitane) recently opened a store in Alibaba group's Tmall shopping website, and became another senior brand to join its platform in response to its illegal sale of Tmall products.

According to reports, L'OCCITANE's online flagship store opened in December 1st, selling Cherry Blossom Body Lotion and hand cream, each with a unit price of about $40.

L'OCCITANE Asia Pacific president Hoffman (Andre Hoffmann) said the company's products had been sold unauthorized by Tmall, so they decided to open flagship store in Tmall.

Hoffman said that only in this way can we ensure that the expired and damaged products are not sold, and the company's goal is to become the only seller authorized by Tmall to sell L'OCCITANE products.

British luxury brand Burberry and Estee Lauder, Estee Lauder's high-end cosmetics brand, also opened stores in Tmall this year.

People familiar with these companies say the key is to open stores to protect their brand's image on Tmall.

The spokesman said there is no doubt that Chinese consumers are very interested in high-end brands, and Alibaba will continue to develop these brands on Tmall website.

Reporters interviewed more than 30 sellers, brands and analysts this year, and learned that Alibaba is committed to high-end brands. As long as they open stores in Tmall, Alibaba will clean up merchants who sell unauthorized products on the website, or take more actions to combat counterfeit products.

In September, Alibaba launched the largest global initial public offering (IPO) paction in the world with a scale of $25 billion.

YipitData, an e-commerce data company.

It showed that when Boboli and Estee Lauder opened their stores earlier this year, all the third party sellers who sold the two brands disappeared from Tmall website.

Analysts believe that this reflects the Alibaba to attract some brands to enter the Tmall will take considerable measures.

However, YipitData data show that after L'OCCITANE opened flagship store in Tmall, the number of L'OCCITANE products sold by third party sellers did not decrease immediately, with about 1400 entries.

Nevertheless, Jordan Milan, a product analyst at YipitData, said the company's analysis showed that brands could better control their image by opening flagship stores in Tmall, because the flagship store could get a more favorable display position on the website, making it difficult for gray market products to be easily accepted by Milan.

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Hoffman said L'OCCITANE is discussing with Alibaba how to deal with Tmall's third party sellers selling L'OCCITANE products, many of which are sold at a discount.

A Alibaba spokesman said the company did not comment on the dialogue with consumers or third party data.

Reported that gray market goods has always been a problem facing high-end brands.

These goods are purchased from distributors outside China and then sold at mainland China at a discount price.

High end brand companies worry that this unauthorized sale may damage their image and undermine their pricing power.

L'OCCITANE has been consulting with Alibaba for months on Tmall's flagship store.

The main concern of the skincare company is how to protect its high-end image on Tmall, according to people who have revealed the negotiations.

It is reported that L'OCCITANE's decision to open a shop in Tmall is seen as a change in its strategy.

Paul McKenzie, an Asia Pacific market analyst at CLSA, wrote in its 2013 September research report that L'OCCITANE deliberately avoided Chinese shopping websites, and thought that these shopping websites did more harm than good to their businesses.

According to the report, L'OCCITANE believes that Chinese online shoppers have been used to think that online stores offer lower and more favorable prices than physical stores, but L'OCCITANE is reluctant to make concessions.

However, analysts said that these brands also realized that they could not ignore the development prospects of China's e-commerce.

According to Euromonitor International, Tmall has more than 70 thousand sellers, controlling about 45% of Chinese companies' online sales to consumers.

In the past three years, Tmall's sales have increased by more than nine times to 50 billion 900 million US dollars, according to ou.

Tmall is one of Alibaba's three main e-commerce sites.

Hoffman said, for L'OCCITANE, Tmall flagship store sales in the first few days is encouraging.

Erwan Rambourg, a luxury analyst at HSBC, said other high-end brands had told him that they were open to opening flagship stores on the Alibaba platform.

Lang Bo said that enterprises are just adapting to the current consumption situation in China. Many traditional brands are faced with the problem of losing their brand value on the one hand, and on the other hand, they want to get more customers.