Following its better-than-expected profit reported in Q3 2019 (quarter ending December 31, 2018), Alibaba Holding Group continues to expand its footprint in the luxury market. The e-commerce giant announced on Tuesday, April 2 that British fashion brand Alexander McQueen has joined Tmall’s Luxury Pavilion, Alibaba’s dedicated site for high-end brands.
Alexander McQueen, which was founded in 1992 by the company’s namesake designer, began its foray into Chinese e-commerce with a soft-launch on the platform this week. Alibaba also noted that it will give the brand full creative control over the design of its virtual store on Luxury Pavilion, as well as allowing it to be directly run by Alexander McQueen instead of a local partner — a first for a third-party e-commerce shop.
The move into Alibaba's e-commerce platform gives Alexander McQueen greater access to potential customers who are becoming less likely to make luxury purchases abroad. Last year, the brand agreed to sell via JD.com's Toplife. Additionally, the fashion house also plans to open two flagship stores this year in Shanghai and Hong Kong to better serve Chinese consumers.
The store openings are part of the Kering Group’s (McQueen’s parent company) pivot toward greater local consumption. Kering noted, in its most recent earnings call, that while it has seen a decrease in Chinese tourist spending in its stores, it has noticed an uptick in revenue within mainland China. As Gucci, Kering’s star brand, has found success in China, it was only a matter of time before more of the group’s other luxury brands opened up shops there as well. Alexander McQueen is the third Kering company to join the Luxury Pavilion, following Hong Kong-based jeweler Qeelin, and Italian fashion house Bottega Veneta.
Alibaba also reported in its Q3 2019 earnings release that it saw significant growth in its luxury e-commerce segment, with the addition of renowned international brands that included Valentino, Ermenegildo Zegna, Stuart Weitzman, and Sergio Rossi. The platform hopes to see continued growth as Alibaba focuses on expanding into smaller cities in China that have seen increased interest in luxury brands.
This trend seems likely to continue. As the Chinese government continues to push for more domestic consumption, which includes narrowing the price gap of luxury brands in the country, it’s expected that more luxury brands will open an e-commerce shop either on Alibaba’s Luxury Pavilion or competitors like JD.com.