The World'S Second Largest Luxury Group Is Fully Betting Tmall.

China's electricity supplier's environment is changing rapidly, and different luxury brands are building their own businesses. But the peak group, whose core business is watches and jewellery, is very fond of Tmall.

Shanghai, China -- the fashion industry seems to have reached a consensus on China's savior theory. Not only LVMH and Kering have been pleased with China's market recovery, but also emphasized the importance of China's business to Richemont when it announced its 2019 annual report last week.

Although in the 2019 fiscal year ended March 31st, the total sales volume of the group rose by 2% to 14 billion 238 million euros, but its net profit decreased by 67% to 931 million. From this earnings report, the market can also see that the peak sales last year accounted for 19% of group sales, up from 16% in the same period in 2018. Limited to the core business represented by jewellery and watches, the group seems to have a relatively conservative attitude towards expanding online sales channels. Although the fourth quarter is full of challenges, it seems to be able to get some inspiration from it.

In the quarter, the sales volume of the business of Yoox, Net-A-Porter and other sectors of the group, including the electricity supplier, has increased significantly, partly easing the suspension of tourism and retail businesses. The Group expects its e-commerce sales to account for a larger share of the overall business this year.

At the same time, China's regional business has not failed to meet expectations. There has been a gratifying recovery. The chairman of the group said that the rapid recovery of the Chinese market is hard to replicate to other regions.

Business Live previously said: "the peak group continues to bet on the Internet world, and formulated a clear strategy for Chinese online consumers." Now we can reconfirm the above content. The frequent action of the peak group in China's e-commerce business is a carefully deployed strategy for a long time. And the main battleground for its choice is undoubtedly Tmall.

　　 Yoox Net-A-Porter (YNAP) is a joint venture with Alibaba.

The cooperation between the group and Alibaba started in October 2018. The group's luxury electric business Yoox Net-A-Porter (YNAP) and Alibaba formally established a joint venture company. The two sides will provide basic support for technology, payment, logistics and so on by Ali side. At the same time, there are also suggestions and help for the Chinese market, such as critical data selection, consumer insight, etc., to a great extent, laying a good road for the group to deeply contact the environment and consumers of China's electric business. The Group Chairman Johann Rupert has said that through the strategic cooperation with Alibaba, the first step is to introduce Net-A-Porter and Mr Porter to more Chinese consumers. He believes that the cooperation between the two sides is a milestone in the luxury industry.

In September 30, 2019, after a long time of deployment, Net-A-Porter officially opened flagship store on Tmall luxury platform Luxury Pavilion. It also showed that the joint venture of the two parties' main body was officially put into operation. The flagship store contains a series of men's wear and jewellery watches, with more than 130 brands, including brands of Cartire, Cartier, IWC, Panerai, Jaeger Le Coulter (Jaeger-LeCoultre), and other fashion and luxury brands including Tom Ford, Jimmy Choo, Brunello Cucinelli, and Balmain.

In January this year, Cartire, the core brand of the group, announced its entry into Tmall luxury Luxury Pavilion. Despite the news of luxury brands entering Tmall, a large proportion of brands only put beauty, fragrance, accessories and other small pieces into the water. As the first luxury brand to march into Tmall with the whole category, Cartire has launched the world's first two new products of Juste UN Clou series new bracelet and Guirlande de Cartier chain handbag on the platform, splashing great splashes in the industry. In addition, the brand has also customized the customized services under the line. After that, he also took part in Tmall's super brand day activities.

　　 Cartire Santos-Dumont series limited wrist watch, photo source: brand

Affected by the new crown epidemic, Geneva's "Watch & Wonders" exhibition was cancelled in 2020. Then the organizers of the Swiss advanced horological Watch Foundation (FHH) transferred the exhibition to the digital platform. Cartire also displayed its new and rare watches on the Internet, and also released the Santos-Dumont series limited watches at its Tmall flagship store. Until then, the brand has never launched exclusive limited works on the Internet platform for its customers. This once again confirms the further deepening of cooperation between the brand and Tmall, the group of peaks and Alibaba.

On the eve of the "520" festival, which is particularly important for luxury brands, even though many brands have launched a "winning battle" in WeChat, Cartire has unswervingly rooted its marketing focus in Tmall, and has made an interactive and dynamic interface for the "520" campaign through the 2 model of Tmall flagship store. At the same time, the brand once again launched the Trinity series of new rings in Tmall world. According to public data, it has sold 967 products. Tmall has become an important option for brands to start their products, even though Cartire sells jewelry and watches with high price.

And Chlo, the fashion brand of the group, settled in Tmall last Monday. Just 4 days after its entry, the brand was prepared for its first official live broadcast in the evening of May 19th, and eventually attracted 62 thousand people to watch. At present, its Tmall flagship store has nearly 6000 fans.

It is worth noting that apart from the power of WeChat to get through the electricity supplier, any brand of the group has not officially established its official base in other Chinese e-commerce platforms. So far, the summit has been firmly aligned with Alibaba.

China's electricity supplier's environment is changing rapidly. Tmall, Jingdong and WeChat are all the battleground of luxury brands. In the past "520", many brands have come to WeChat to launch the limited time applet. WeChat's flexible playing and sticky flow have attracted the attention of many brands. In the past year, Jingdong has also taken active measures to attract more luxury and niche fashion brands to get the exclusive authorization of brands such as Delvaux, By Far, Proenza Schouler and so on. However, Alibaba's Tmall is still China's largest luxury electronic business platform, and its Tmall luxury products currently have more than 150 luxury brands.

Moreover, by the end of 2019, the number of active users of Taobao was over 800 million, and the order volume during the epidemic in March 2020 increased by 12 million more than in December last year. According to a study released last year by Consumer Search Group, Rhodes, 60% of Chinese respondents prefer to buy luxury goods online through Tmall luxury Luxury Pavilion, compared with 44% of those who like to buy through Jingdong.

　　 Juste UN Clou series limited edition black ceramic bracelet and Juste UN Clou series brand new bracelet. Picture source: brand

Cartire brand has revealed that in February 10th, with the promotion of Tmall super brand day, its sales record was created on the opening day: the Juste UN Clou limited edition black ceramic bracelet was sold in 1 minutes, and the Juste UN Clou series brand new bracelet was sold out on the super brand day. The peak choice of Tmall is largely due to the coverage of its business platform to the population, which is sufficient enough to protect the sales volume.

Luxe Digital said earlier: "45% of the middle class consumers in China's two or three tier cities are interested in buying luxury goods, compared with 37% in the first tier cities." The consumption potential of the two or three tier cities is the target market targeted by luxury brands in recent years, while Tmall has the ability to sink deeper into the market, helping traditional luxury brands cover low tier cities, and even helping brands provide decision-making reference for new store siting products.

Last but not least, the importance of Chinese young people to luxury brands is extraordinary. Last month, a report released by Thompson gate showed that 88% of Chinese Z generation users felt that online shopping was as comfortable as offline, and 73% of users believed that having luxury brand products was "important". According to Daxue consulting, China has continued to exert significant influence on the development of luxury watches and jewellery markets, with a market growth rate of over 59%.

"The Z generation has occupied about 20% of the total number of Tmall luxury consumers, and the growth rate is accelerating year by year," said Hu Weixiong, vice president of Alibaba and general manager of Tmall fashion and express. Moreover, the majority of Tmall's luxury consumers are between 18 and 35 years of age. Among them, 15 to 25 years old consumers are growing at two times the rate of consumers aged 25 to 36. To make watches and jewelry as the core business of the group, to a great extent, we hope to meet these potential consumers and cultivate their consumption mentality.

In response to the cooperation between the group and Alibaba, Liston Meintjies, an investment analyst, commented: First of all, luxury brands have to go to China because it is where growth is. After you get there, you have to focus on the line, otherwise you will still have nowhere to go. "Compared to other group's luxury brand multi platform deployment, the peak group has a comprehensive bet that Tmall may own its opportunity cost, but on the whole, this is at least the most secure decision.