Alibaba Takes Aim At French Luxury With New Government Deal

French brands such as Evian and Clarins are taking part in Alibaba's one-week France-themed promotion. (Tmall) After the recent launch of a Tmall shop by British label Burberry, Chinese e-commerce giant Alibaba is teaming up with the French government to promote French brands in a new deal likely aimed at courting more high-end companies. According to a Xinhua report, the top Chinese e-tailer’s three-year memorandum of understanding (MOU) signed Friday with France is aimed at encouraging new French brands to sign up by providing them with express enrollment, brand promotion, and marketing support on Tmall. The deal was signed between Alibaba Founder Jack Ma and French Foreign Minister Laurent Fabius, who said that it “will significantly widen the choice of French products available for Chinese consumers who will enjoy their well-deserved reputation of high quality and security.” Tmall already has a significant number of French brands on its site—as part of the new deal, the platform launched a one-week “Elegance of France” campaign on May 19 to highlight more than 30 flagship stores owned by French companies on the site. The agreement is most likely aimed at pushing an upscale image and courting luxury brands, which have been wary about opening up shop on Tmall due to its discount-driven business model and fears that it might dilute their brand image. While Burberry is the only foreign luxury fashion brand on the site after its Tmall shop launch a few weeks ago, many French beauty brands such as Clarins and L’Oreal have already been avid Tmall sellers. Another reason for the high-end push is likely Alibaba’s need to attract foreign investors after its recent IPO announcement. While its B2C Tmall and C2C Taobao e-commerce sites have thrived off many transactions of cheap, imitation luxury goods, the company has made a concerted effort to show that it’s fighting fakes and plans to profit off legitimate business. Last week, it announced that it had streamlined its process for dealing with counterfeit goods and had begun automatically removing products flagged as fake. According to Ma, the MOU serves as ”an example how Alibaba Group can work hand-in-hand with foreign trade entities to expand global cross-border trade in order to benefit both global businesses and Chinese consumers through our marketplaces.” If Tmall is unable to convince upscale brands that they won’t ruin their luxe image by listing on the site, Alibaba appears to have a backup plan in place with its investment in American site ShopRunner and agreement to help the site distribute in China. While ShopRunner is similar in format to Tmall, it boasts more prestigious brands, and may be a key compromise for storied luxury brands nervous about wading into China’s e-commerce market.

Alibaba Takes Aim At French Luxury With New Government Deal

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Published May 20, 2014

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Alibaba Takes Aim At French Luxury With New Government Deal