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Alibaba launches Luxury Soho, a digital fashion community and outlet centre

Luxury Soho targets value-conscious consumers and helps brands quit surplus stock

Alibaba has launched a new platform Luxury Soho, targeting value-conscious aspirational shoppers, and helping high-end brands quit surplus inventory. 

Accessible via Mobile Taobao and the online flagship stores of partner brands, Luxury Soho is positioned as an online gathering place for young consumers – as well as those new to luxury purchasing – to discover designer brands and potentially make their first luxury purchase.

The new service is also “a response to the need in the fashion industry for brands to be able to efficiently manage their inventory and stock – an issue that’s been compounded by the Covid-19 outbreak,” said Tmall’s head of fashion and luxury in Europe Christina Fontana. 

“Restricted movements led to reduced foot traffic in brick-and-mortar stores – including from Chinese tourists who were not able to travel to brands’ boutiques and outlets in Western countries like they used to. So brands are now sitting on a worldwide abundance of stock and are also needing to find ways to reach new consumers,” she said. 

“With Luxury Soho, brands can now move select products and collections onto an online outlet store and bring them in front of a specific audience that is waiting to discover new products and brands.”

Alibaba’s Tmall Luxury Pavilion was designed to serve as a second website for brands in China, focused on branding and aimed at a more affluent class of consumers. By contrast, Luxury Soho targets younger, newer luxury consumers – such as those from China’s lower-tier cities or Gen Z shoppers who are just entering the world of luxury.

“Luxury Soho also plays into brands’ existing outlet strategies,” added Fontana. “It can empower them to diversify their strategies in China to handle excessive inventories with more flexibility. As a platform, we offer the tools for brands to run their own stores with full control over their pricing, product selection, strategy and look and feel. They can engage consumers in new ways using innovative features, from live streaming, augmented reality and 3D interactive technologies to virtual icons and flexible payment solutions. Brands can even tap their offline store associates to engage with consumers online to showcase certain products and answer questions,” said Fontana.

“In the past, luxury brands might have operated multiple stores across China to be able to reach more consumers. But the coronavirus outbreak has exposed some underlying vulnerabilities in this model and accelerated changes in consumer behavior, including the shift from shopping in-store to shopping at home. To build resilience and meet consumers where they are at, more luxury brands will think about how to move their in-store experiences online.”

She says brands impacted by the Covid-19 crisis need to consider how to turn their focus towards China’s domestic market and explore new ways to market to consumers there.

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