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LONDON – Tmall, China’s largest business-to-consumer ecommerce platform is getting into the outlet business. Designed to help brands accelerate their digital transformation–and pressingly in this coronavirus-hit world–to liquidate stock and bring in a new source of revenue, Luxury Soho was unveiled quietly on April 20.
Named after the SoHo district in New York, known for its bustling fashion energy, the platform is a counterpart to Luxury Pavilion, which was introduced in 2017 and now hosts a wide spectrum of luxury brands and retailers including Cartier, Prada, Zegna, Coach and Net-a-Porter.
With a severe industry-wide sales disruption and consumers’ discretionary spend forecast to be cut back, discount retailers are expected to benefit in the post COVID-19 world. Brick-and-mortar outlet operator Value Retail reported a quick bounce back in its China revenue to pre-virus levels, while the Hong Kong-headquartered outlet operator On The List opened a permanent showroom in Shanghai this month.

That being said, Yoox China closed down on February 28 this year as YNAP focused its efforts on its full-priced business joint venture with Alibaba, while the Outnet, another off-price platform under YNAP, left the market even earlier in 2015.
“Luxury brands have a specific product life cycle. As the main platform for brands’ digital operation in China, Tmall provides solutions for different scenarios,” said Weixiong Hu, vice president of Alibaba Group and general manager of Tmall’s apparel fashion business unit. “In the future, luxury brands can open two different types of stores on Tmall. The official flagship stores that focus on the new products of the season are stationed in Luxury Pavilion and the official outlet stores that focus on discounted products can be put under Luxury Soho.”

Luxury Soho will feature quality products with competitive price points while protecting brands’ premium images at their Luxury Pavilion stores.
Millions of Taobao users who are deemed qualified by Alibaba’s big data algorithm will see the channel show up on the app landing page. For those who don’t see it, they can find the page by searching “luxury discount.”
Tmall said it hopes this channel can be a gathering place for the fashion-loving but price-sensitive Millennials and Gen Z shoppers. There will be short-form videos, live streams, and product recommendation content from key opinion customers. Top tier brands, media and influencers will also be able to share fashion information.
Coach is one of the first brands to join this channel, and the discount goes as deep as 70 percent off. For example, a men’s backpack is marked down from 5,600 renminbi to 1,680 renminbi, or $790 to $237.
Yann Bozec, president and chief executive officer of Coach China, said: “This strategic cooperation with Tmall will help us to connect deeply with Chinese consumers and show them the unique brand image, products and experience of Coach.”
Other brands that have joined the outlet channel include Emporio Armani, Versace, Hugo Boss, Giuseppe Zanotti, MCM, La Perla, Calvin Klein, Diesel, Y-3, UGG and Chiara Ferragni.
Related:
Value Retail’s Scott Malkin Draws Lessons From China >>

Net-a-porter to Open Flagship on Alibaba’s Tmall Luxury Pavilion
Miu Miu Bolsters China Digital Presence With Virtual Idol, Tmall Shop

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