Key points to remember:
Even though the Double Eleven shopping festival and 618 shopping day ignite Chinese shopping sprees, luxury brands have suffered due to being stuck in an “either or” platform dilemma.
For brands that want to take advantage of Chinese digital sales channels, Tmall or JD.com have always been their best choices, with built-in infrastructures offering benefits ranging from internal advertising priorities to homepage promotions.
JD.com hopes to become a more luxury-focused place, with a new page that redirects consumers to the brands’ official WeChat mini programs.
At the beginning of September, China published rules to prevent the monopolistic behavior of Internet companies, which many see as a movement for fairer competition in e-commerce. Indeed, companies that violate these market laws will be strictly controlled and monitored.
As such, there will no longer be the problem of “either Tmall or JD” which has hampered the expansion of luxury brands in China. This change is an important step for brands who want to quietly choose platforms for their future sales and campaigns in China, and cross-platform strategies are now increasingly popular.
With these new rules, China pledged to strengthen its anti-monopoly measures and regulate the e-commerce market by declaring that internet giants cannot violate anti-monopoly social practices, to Double Eleven, group purchasing and the platform economy. China’s proposed new amendment maintains an existing maximum penalty of $ 309,500 (2 million yuan) for less serious infractions.
For a long time, Chinese e-commerce giants Alibaba and JD.com have maintained a love-hate relationship while competing for the title of China’s largest e-merchant. Alibaba’s Tmall platform was designed as a virtual point of sale for exclusive luxury shopping experiences. Meanwhile, JD.com has grown into a full-fledged retail website after it started selling digital products.
Even though the Double Eleven shopping festival and 618 shopping day ignite Chinese shopping sprees, luxury brands have suffered due to being stuck in an “either or” platform dilemma. With the intensification of competition between Tmall and JD.com, the two companies have implemented monopoly policies to suppress each other, such as exclusive cooperation and irregularly low prices.
For brands wishing to take advantage of Chinese digital sales channels, Tmall or JD.com were their best choices. Luxury brands, which receive integrated infrastructures from both platforms, can achieve countless benefits, ranging from internal advertising priorities to promotions on the homepage.
Following the new policy, JD.com has entered into a partnership with Louis Vuitton, one of the largest international luxury houses. Although Tmall is known to be a good friend of luxury brands, this deal is the brand’s first with a third-party Chinese e-commerce platform. BVLGARI and Berluti also deepened their partnership with JD.com this quarter.
On the JD site, consumers can now search for Louis Vuitton products through the bespoke brand page, despite limited experience in exclusive luxury cooperation. The platform hopes to become a more luxurious place. And now, customers can play around with the page and be redirected to Louis Vuitton’s official WeChat Mini program, which is also full of shopping links and alluring ads.
âYou can see the change on JD.com,â said Joe Liu, senior fashion marketing consultant in Beijing. âIt is moving towards a more complete, young and trendy website. After Farfetch ended its partnership with JD.com, the latter continued to seek new partners. And the collaboration with LVMH is a highlight. He added that Tmall is still a strong contender in merchandising, international influence and its unique abilities to navigate the market.
Regarding beauty brands, Guerlain and Givenchy (both owned by LVMH) have launched their official flagship stores on JD.com. Meanwhile, brands with huge fan bases in China, like EstÃ©e Lauder, CLINIQUE and Kiehl’s, have chosen to join JD.com.
âTmall and JD.com have been engaged in a luxury brand war for several years,â Liu added. âBut both platforms have advantages, and racing against each other makes them take on more challenges. For JD.com, it needs to get rid of the âelectronics retailerâ label among its users. Whereas Tmall must maintain the confidence of consumers and forge relationships with luxury houses. Last year, more luxury brands like Prada, Gucci and Cartier opened their flagship stores on Tmall.