Amazon, Alibaba, TikTok, WeChat. These are just some of the biggest and most dynamic companies of today that are probing an uncertain new digital frontier in luxury. Traditionally reluctant to go online, and usually confined to proprietary websites or multi-label e-commerce specialists like Net-a-Porter and Farfetch, the luxury industry has been expanding its digital footprint in recent years by actively seeking new partners. Online marketplaces such as Amazon, Alibaba’s Tmall (Alibaba is also the owner of the South China Morning Post ) and JD.com are racing to carve themselves as big a niche in luxury e-commerce as possible, while the rapid growth of social commerce, through media platforms such as Instagram, TikTok, WeChat and Xiaohongshu (also known as Little Red Book and similar to Instagram), is a further significant potential engine for growth. The ultimate winning strategy is likely to hinge on a delicate balance of wide audience reach, robust branding opportunities and a seamless purchasing experience. “Luxury brands want to meet their new customers where they are,” says Dr Thomaï Serdari, founder of luxury branding consultancy Brand(x)Lux and adjunct professor at the New York University Stern School of Business. “If that means embracing a platform that has more of a mass appeal, they have to consider it.” Meet model-turned-cryptocurrency entrepreneur, Lauren Remington Platt Considering that Alibaba’s Tmall has some 53 million average active monthly users, while JD.com has 205 million and Amazon’s Prime membership has over 200 million subscribers, the platforms’ access to consumers is not in question. Despite this, each of these three major players has experienced different levels of success. Tmall’s Luxury Pavilion and JD.com have both onboarded more than 200 leading luxury brands, with Tmall bagging the likes of Balmain, Bottega Veneta and Cartier, and JD.com inking deals with Louis Vuitton, Prada and Armani. Tmall, as the first to launch luxury e-commerce in 2017, has an existing relationship with Net-a-Porter too. JD.com recently entered into a partnership with luxury e-commerce specialist Farfetch, and luxury conglomerates Richemont and Kering. Amazon, on the other hand, has fewer than 50 brands in its luxury stores, none of which have the same luxury cachet as the ones its Chinese rivals have bagged: its most luxurious brand being Oscar de la Renta. Amazon’s lacklustre performance can, according to Serdari, be partially attributed to its reputation for deep discounting and questionable product quality – exactly the kind of negative branding luxury brands try to avoid. On the other hand, Tmall’s Luxury Pavilion is an aspirational brand in itself, and thus able to convey the luxury association desired by brands on its platform. “The main question,” she adds, “is how can brands overcome the challenge of delivering not only product over these platforms but also a consistent brand experience”. Branding is, after all, fundamental to a luxury marque’s appeal. Inside the luxury life of Khloe Kardashian’s adorable daughter True Tmall and JD.com both have a similar strategy, allowing brands to create a store-in-store experience unique to each label – much like a boutique in a luxury mall. On these platforms, brands maintain total control over the visual experience and content available to the customer, while the channel partner takes care of everything from digital infrastructure support to supply chain and last mile fulfilment services. For both Tmall and JD.com, this even includes white glove delivery, to ensure that consumers can enjoy the full luxury experience and brands can rest assured of the quality of service. “We will make efforts to improve VIP operations in the near future to bring our consumers the same service as offline stores,” says Kevin Jiang, the president of international business at JD Fashion and Lifestyle. “Our ultimate goal is to make JD the destination for Chinese consumers to buy luxury products.” This, according to Serdari, is where these platforms have an advantage. “They have empowered luxury brands to stay authentic to their original branding – whereas on Amazon, that branding is lost,” she says. “While Amazon Luxury maintains a veneer of exclusivity via its invite-only access, the fact that the ‘Luxury’ tab is buried in the general navigation menu and does not offer a meaningfully differentiated shopping experience from other luxury e-commerce platforms such as Net-a-Porter means that it has not quite grasped the nature of the luxury experience that brands desire.” Meet the Hong Kong-raised Princess of Greece, Marie-Chantal Miller In other words, “the customer is short-changed of the full experience that a luxury brand can offer online”, she adds. While these established e-commerce giants are pioneers in luxury, it would be wrong to neglect social commerce, where brands can sell products directly via social media and content-focused platforms. While Instagram is the only such platform outside China that has integrated e-commerce into its operations, China-specific platforms such as messaging super-app WeChat, microblogging platform Xiaohongshu, as well as video platforms like Douyin (TikTok’s Chinese equivalent) , have all done so. Each has capitalised on its wide user base, hoping to turn content and social connections into conversions. According to Pablo Mauron, partner and managing director for China at consulting agency Digital Luxury Group, social commerce is not yet a dominant form of e-commerce in China, with marketplaces like Tmall and JD.com still accounting for the largest proportion of digital sales, but the sector is growing. Tencent’s WeChat, for instance, presents a good way for luxury brands to maintain deeper relationships with loyal customers. Its WeCom function allows brands to tap into its existing offline sales force to manage one-on-one communications and track consumer data in a centralised location. WeChat’s Channels also allow for content from brands to be pushed directly to followers, who can then be directed to make a purchase through and checkout using the app’s integrated WeChat Pay. This seamless integration with in-app payment methods offers an advantage over competitors like Tmall and JD.com, who still rely on external payment gateways. Brands such as Louis Vuitton, Gucci and Dior have all joined the platform. Granted, WeChat Channels’ traffic is still low compared to other video platforms such as Douyin and Kuaishou, but the frictionless e-commerce experience is one that luxury brands can certainly take advantage of. Meet Prince Heinrich Donatus, the hunky German royal helping Ukrainian refugees Since its launch in 2016, the short video platform Douyin has grown exponentially and now boasts over 600 million daily active users. Brands such as Dior, Gucci and Tiffany & Co. all have official accounts. The app has enabled e-commerce links to third-party platforms such as JD.com and Tmall, and also created its own Douyin mini-programmes, which resemble a lightweight app for each brand housed within Douyin itself. In March this year, Douyin doubled down on its e-commerce strategy and launched its flagship store function, aimed at creating a more seamless and trustworthy shopping experience, resembling the store-within-store model pioneered by Tmall’s Luxury Pavilion. In a strategy perhaps gleaned from WeChat, Douyin has also launched Douyin Pay, to try and further reduce reliance on external apps and payment methods. Over 220 brands have signed up for flagship stores on Douyin since their launch, albeit largely ones from the beauty space. Hong Kong-based jeweller Chow Tai Fook is one of the few luxury brands to have a flagship store, but onboarding more luxury brands may just be a matter of time. Douyin pulled in an estimated US$23.6 billion (150 billion yuan) in gross merchandise value in 2020 and was reportedly on track to make US$157 billion (1 trillion yuan) – six times more – in 2021. The opportunity to connect with China’s Gen Z audience, reportedly the fastest-growing demographic for Tmall’s luxury and fashion segment, is likely to prove enticing. Meet the Italian Kardashians – Chiara, Valentina and Francesca Ferragni “If [social commerce is] properly harnessed,” says Mauron, “it could really change the way consumers engage with and purchase from luxury brands in the future”. But he also cautions that there are hurdles that brands and platforms need to overcome before it can become a reality. These include the fact that platforms still tend to redirect to third-party sites to drive purchases: “The less seamless the consumer journey is, the less likely brands are to close a sale.” And even with a completely integrated system, there is still the issue of trust and familiarity – consumers are not yet familiar enough with social commerce to assuredly navigate the customer journey. Size selection, returns and customer service communications are all issues that social commerce platforms have yet to iron out. But clearly, the consumer interest in social commerce exists. The global e-commerce landscape is vast and complex. Not only do luxury brands have the option of working with any of the aforementioned social and e-commerce platforms, they can also maintain relationships with speciality retailers such as Net-a-Porter, Farfetch and Matchesfashion, or even maintain their own e-commerce sites. What is true, however, is that the tech giants have the ability and incentive to explore new possibilities for richer and more seamless digital shopping experiences. All three of the aforementioned e-commerce titans, for instance, are working on augmented and virtual reality offerings that could transform the way that consumers experience luxury. These competencies would be far outside the realm of a luxury brand’s, but could lead to significant gains for the brands that choose to adopt them. “The key to luxury e-commerce is for individual brands to embrace the medium,” muses Serdari. “Technology is here to stay and can deliver remarkable results for luxury brands.” Want more stories like this? 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