Alibaba’s Tmall Luxury Pavilion indicates shoppers are flocking to the metaverse

Alibaba is celebrating the fifth anniversary of its Tmall Luxury Pavilion by doubling down on efforts to woo buyers in the metaverse.

The e-commerce titan is unveiling a series of virtualized shopping experiences as it touts the recent success of China’s biggest luxury market and lays the groundwork for future expansion into the digital realm.

Tmall’s sales have increased nearly 300% over the past three years by expanding its offering of more than 200 luxury brands such as Louis Vuitton, Fendi, Dior, Gucci, Yves Saint Laurent, Balenciaga, Cartier, Chloé and more. others. The Luxury Pavilion has seen its consumer base grow by more than 150% from 2019 to 2021 as consumers turn to the web as a lifeline during the pandemic, according to Janet Wang, head of Alibaba’s luxury division. “We’ve seen how quickly brands have embraced digital transformation and consumers have increased their online consumption,” she said. Now, it aims to introduce digital experiences that change the way consumers browse and shop, allowing them to discover and interact with brands in new ways.

Last month, the retail group held an augmented reality fashion show in partnership with Vogue China and a roster of international artists. The top models have been replaced by digitized mascots of the luxury brands that participated in the showcase. Attendees were invited to interact with these de facto brand representatives, taking virtual selfies with them after the show.

Tmall is using the celebration to introduce the “Meta Pass,” which gives shoppers priority access to products in the digital landscape. Blockchain-certified warrants can be purchased by pass holders and redeemed for limited-edition items. Those who acted quickly were able to nab exclusive items like an oversized Max Mara Fall 2022 sweater, Burberry’s Lola bag and Marni fleece-lined Pablo sneakers.

“Before ‘metaverse’ became a buzzword, we had already turned this buzzword into a commercial reality,” Wang explained. She believes that “the digital world can provide consumers with the same or even better shopping experiences and luxury brand identities than in the real world.”

Chinese consumers were early adopters of the metaverse, inspiring faster progress than seen in the Western world, according to Wang. Avatars like Mark Zuckerberg’s recently unveiled Meta cartoon look rudimentary compared to models created by companies like China’s Damo Academy. The group’s “meta-human” Dong Dong has realistic features and an appearance comparable to a real person, the executive said.

These sophisticated technologies not only allow Chinese buyers to explore the metaverse, but to transact within it. Wang said the consumer experience with the luxury pavilion’s digital storefronts has evolved significantly over the past five years. They now offer an authentic experience that mirrors real shops, and virtual reality technology allows brands to showcase the finest details of luxury apparel and accessories.

The only online marketplace in China that offers products from luxury companies LVMH, Kering, Chanel, Richemont and Hermès International in one place, consumer engagement is increasing dramatically, Wang said. The number of buyers who made purchases at the Luxury Pavilion last year was 153% higher than in 2019, with total transaction volume up 309% during this period. More than 50% of this transaction volume comes from repeat buyers who have made more than three purchases on the platform, and 70% are women.

Luxury Pavilion has also doubled its digital collections in recent months, with 37 limited-edition luxury lines released since last year’s 11.11 festival. Users can equip their virtual avatars with luxury goods to wear in the Taobao Life 3D gaming experience. Meanwhile, more than 20 brands have posted digital art collectibles, or NFTs, on the platform, and many have also held virtual fashion shows. Notably, men under 30 make up nearly 70% of the audience for these all-virtual products and experiences.

The data points to a number of growth opportunities for the platform, Wang believes, and the Tmall Luxury Pavilion is eager to see fashion companies buy in droves. Last month, the group hosted an extended reality experience for luxury executives in Shanghai, where technology from the Damo Academy was rolled out in full force. Participants used AR glasses and tried to transform a luxury digital gift bag into a box. They also interacted with brand mascots and were able to “hold” a tiny virtual model of a Burberry deer in the palm of their hands. Content was projected onto walls, showing executives how shoppers could navigate the virtual shopping experience.

Wang believes the advancement of this technology will help protect the industry from future disruption as continued Covid lockdowns persist across China. Online penetration of luxury in the country rose to 23% in the first year of the pandemic, from just 12% the previous year. And even in the face of rising inflation and economic uncertainty, luxury homes are still eager to buy. In recent months, Bulgari, Moncler and Brunello Cucinelli have all launched virtual storefronts on the platform.

“We all know how digitally savvy Chinese consumers are and how quickly they are able to adapt to new technologies,” Wang said. “That’s why we’re introducing a whole new meta-experience.”