In the wake of a tough summer in Greater China, dented by ongoing Hong Kong protests, an uncertain outbound tourism market, and yuan devaluation, all eyes in the luxury industry are on Feng Mao, the new high-end online joint venture between Chinese e-commerce giant Alibaba and luxury monolith Richemont.
First announced last year and set to officially launch in October, Feng Mao brings together 130 brands on Tmall’s Luxury Pavilion, among them Tom Ford, Brunello Cucinelli, Cartier, Vacheron Constantin, and many others. This follows the recent announcement that are setting up shop on the Luxury Pavilion — marking Coach’s third attempt at e-commerce in China over the past decade. Other major brands, such as and Omega, launched dedicated stores or pop-up shops on the Luxury Pavilion over the course of 2019.
Last year, Alibaba raked up an estimated $31 billion during Singles’ Day, making it one of the most successful e-commerce events in history. Given the current state of the market, luxury brands and groups will no doubt be closely watching this year’s Singles’ Day haul.
According to Alibaba and Richemont, Richemont’s Luxury Pavilion store will feature “exclusive capsule collections from Net-a-Porter and its menswear counterpart, Mr. Porter, and deliver customized brand pages, personalized content, recommendations, and exclusive VIP rewards to shoppers.”
The launch of Feng Mao is aimed at not only burnishing Tmall’s luxury cred and giving Alibaba access to Richemont’s marketing, payment, and tech infrastructure resource. For Richemont, it’s a way to gain greater online access to the China market without the investment of going it alone or fears that it will overly dilute brand equity. (Perhaps the greatest concern for luxury brands going into the China market in recent years, or a close second to counterfeiting.)
For Yoox Net-a-Porter Chairman Federico Marchetti, the joint venture is apparently about much more than market access. , the JV will help redefine the way Chinese consumers buy luxury online. According to Marchetti, on the Net-a-Porter online store, “Chinese shoppers can explore a unique selection of the world’s most desirable brands carefully curated just for them, enhanced by an unmatched personalized experience and exclusive products that cannot be found elsewhere.”
While the launch of the new collaborative platform is interesting enough, considering so many of the brands included in the YNAP online store have been so reluctant to sell online in China for so long, we’ll be interested to see how YNAP umbrella brands like Mr. Porter will fare early on. Notable for its focus on smaller, independent luxury brands that are less well-known in China, as well as its own Mr. P brand, Mr. Porter will be an interesting barometer to see whether China’s youngish male luxury shopper remains adventurous amid market uncertainty or if he will stick to the most well-known brands in the Richemont/YNAP stable.
Having built its luxury offerings in fits and starts over the past decade, Tmall seems to finally be fully embraced by the high-end industry. The question now is whether overall market uncertainty and economic tension could dampen the launch of so many brands’ online flagships in the months to come. The other question is whether the investment in Feng Mao will ultimately pay off for Richemont, and whether the luxury giant will get as much, or more, out of it as Alibaba. With Golden Week and Singles’ Day soon approaching, these questions will be on the minds of China luxury observers, not least of which being Richemont rivals LVMH and Kering.