Alibaba, the Chinese online retail giant, has revealed that it will start a portal on its Tmall marketplace dedicated to selling luxury items. The portal is expected to be launched before the year ends and it is believed to be an attempt by the e-commerce giant to lure more luxury brands to its marketplace.
Currently only about 21% of luxury fashion labels have a presence on Tmall and Alibaba’s struggles in attracting luxury brands are well documented. Alibaba is banking on the fact that by having a portal dedicated solely to luxury brands, these labels will be less worried about their brand images getting cheapened. In order to make it even more exclusive, Alibaba has used machine learning in order to ensure that only those who have the means to buy luxuries have access to the luxury labels portal.
War against fakes
This comes in the wake of efforts by Alibaba to counter the image that it is the preferred home for fakes. In the latest development on this front the online retail giant reached an agreement with Kering, a French luxury group, to cooperate in fighting counterfeits. Kering also agreed to drop a lawsuit it had lodged against the Chinese e-commerce behemoth over fakes on its marketplaces in 2015.
“It’s clear that Alibaba wants to become a more serious player in luxury. To do that they need to show luxury brands they’re ready to play ball in terms of controlling distribution and prices,” said an Exane BNP Paribas analyst, Luca Solca.
The deal will see the two entities jointly establish a taskforce whose responsibility will taking action against merchants selling counterfeits both online and offline. Consequently the cooperation between the two in fighting fakes will involve working closely with the authorities in law enforcement and exchanging information. Other brands that Alibaba has partnered with in the fight against fakes include Adidas and Nike.
While luxury brands are wary of abuse of their intellectual property, they want access to the Chinese market which is one of the largest markets for luxury goods in the world. According to a report by KPMG, it is expected that more than half of domestic luxury sales in China will be taking place online by the year 2020 and Alibaba has the largest number of users in the country so far.
Earlier in the year the founder of Alibaba, urged the top lawmakers in China to be stricter on counterfeiters by imposing tougher penalties and prison sentences.