Alibaba launches Luxury Soho

Alibaba’s Tmall Luxury Pavilion was designed to serve as a second website for brands in China, focused on branding and aimed at a more affluent class of consumers. By contrast, Luxury Soho targets younger, newer luxury consumers – such as those from China’s lower-tier cities or Gen Z shoppers who are just entering the world of luxury.

“Luxury Soho also plays into brands’ existing outlet strategies,” added Fontana. “It can empower them to diversify their strategies in China to handle excessive inventories with more flexibility. As a platform, we offer the tools for brands to run their own stores with full control over their pricing, product selection, strategy and look and feel. They can engage consumers in new ways using innovative features, from live streaming, augmented reality and 3D interactive technologies to virtual icons and flexible payment solutions. Brands can even tap their offline store associates to engage with consumers online to showcase certain products and answer questions,” said Fontana.

“In the past, luxury brands might have operated multiple stores across China to be able to reach more consumers. But the coronavirus outbreak has exposed some underlying vulnerabilities in this model and accelerated changes in consumer behavior, including the shift from shopping in-store to shopping at home. To build resilience and meet consumers where they are at, more luxury brands will think about how to move their in-store experiences online.”

She says brands impacted by the Covid-19 crisis need to consider how to turn their focus towards China’s domestic market and explore new ways to market to consumers there.