Chinese consumers are now among the most sophisticated in the world. They’re also among the most affluent, with an estimated spending power of $3.6 trillion in China. But for all their sophistication, the Chinese market is still a mystery for many Western brands.
Even though people are becoming more sophisticated, the Chinese market remains conservative and risk-averse. That’s why the luxury market has become so important for emerging international brands. The luxury market is a top priority market for many early-stage international brands that are looking to grow their business in China.
In this blog, we’ll be exploring the benefits of opening a luxury store in Tmall, one of the most popular shopping platforms in China. We’ll also take you through the ins and outs of operating a luxury brand in China.
What is Tmall?
Tmall is a crossroads between e-commerce, social shopping, and traditional retail. It’s a critical part of the Chinese online shopping experience. It’s like an online-only version of American and European department stores. The market capitalization of Tmall is over $30 billion and it’s expected to reach $100 billion within the next decade.
How to Achieve Greater Success with Tmall
Success in the Chinese market is difficult, if not impossible, without first understanding Tmall. Successful brands have found success on Tmall through a combination of organic growth and targeted intervention.
Organic growth is the result of doing nothing more than sitting back and waiting for sales to happen to you. You can sit back, relax, and watch the magic happen. Unfortunately, this is not very scalable in today’s world of software development and marketing.
Over the long term, we believe that Tmall can be a successful channel for international brands. Targeted intervention is the use of digital marketing practices that target specific audience segments and behaviors.
What Will it Take to Achieve Greater Success with Tmall?
Success in the Chinese market is difficult, if not impossible, without first understanding the market. Understanding the market is the first step toward success.
To succeed in China, you need to understand the Chinese imagination. And the Chinese imagination is a very unique one. It’s not the same in America or Europe. There’s a complete difference in how people see things in China and in how things are perceived in the West.
For example, if you want to sell luxury goods at a level that is mid-range or inexpensive, you’re going to struggle in China. However, if you focus on the high end of the market, where the perception is that things are expensive, then you’re in luck.
The Future of Luxury Brand Operations in China
When we think about the future of luxury brand operations in China, we have to keep in mind that China will soon become the second largest economy in the world.
This means that a significant portion of the population will be buying luxury goods. This will drive even more growth for international luxury brands in China.
The growth potential of the luxury market in China is astonishing. The market is expected to reach $1 trillion by 2025, which means that it’s a big opportunity for international luxury brands.
And we have reason to believe that the growth will be even greater than this.
4 Luxury Brand Policies You Need to Follow
1. Brand Equity – This is a crucial one. You need to have a large enough footprint in China to make a difference. You also need to make sure that you’re not only present in Tmall, but that you’re also promoting your brand vigorously.
2. Be Flexible – Differentiation is important, but consistency is even more important. You need to be able to innovate and create new offerings. You also need to be able to respond effectively to the customer needs and wants.
3. Be Consistent – All your marketing efforts need to be consistent with each other. If one of your ads happens to air during a certain time, then the other ads need to air at the same time.
4. Be Responsive – Your online customer service needs to be readily accessible and helpful. Your brand-new online store also needs to be easy to use and very detailed.
heir business in China.