British fashion house Burberry on April 24 became the first international high-end luxury brand to open a virtual storefront on China’s popular Tmall shopping site, eyeing the country’s fast-growing e-commerce sector, but the fashion label has maintained a low profile since the move.
Burberry’s move to open the store on Tmall, a retail platform operated by Chinese e-commerce giant Alibaba, caused an uproar in the industry as the brand and the e-commerce site do not match each other, considering that their target consumer groups are entirely different.
High-end brands place great focus on maintaining their luxury brand image and want to make sure their customers’ experience of making purchases online corresponds with their experience at physical stores. To achieve this goal, a majority of luxury brands establish their own websites or authorize e-commerce platforms that are experienced in selling high-end merchandise to sell their products.
A Tmall executive said that Burberry had planned to only sell its cosmetics on Tmall at the beginning of negotiations with the company, which began during the first half of 2013, but the luxury brand later decided to place its entire product line on Tmall for sale.
The British brand appears to have taken into consideration the outstanding sales performance of Tmall, which achieved a sales growth that was grown nearly tenfold to 273.7 billion yuan (US$43.9 billion) over the last three years and controls nearly half of the e-commerce sales in China.
However, Tmall’s Burberry store sell items at the same prices, compared with the same products sold at the brand’s physical stores. The online store may become a virtual showroom for the fashion brand, where potential customers can ask questions online for certain products but will look for people offering overseas shopping services to buy items abroad at better prices.
During the late 1990s, the British brand faced a number of obstacles, such as a failure to innovate and also experienced slow sales growth. But its strategy on digitalization has renewed its brand image.
