Amazon, JDcom and Alibaba, that is, the major e-commerce players, are planning to expand in the fashion and luxury business. Online shopping keeps enjoying a boost and looks ahead to a shining future, especially thanks to Chinese buyers. That is why the three players are setting some strategies to grab up a market which they all deem appealing. The question is: are they bound to rescue fashion or are they going to become an opponent to fight?
Amazon, JDcom and Alibaba
Amazon created a division called Amazon Luxury Store. The first hosted fashion brand is Oscar de la Renta, yet some more are ready to open their own virtual showcase. For the time being, as reported by Forbes, only Amazon Prime clients can visit the website, upon invitation, in the United States. One of the most interesting available functions is “View in 360”, which provides customers with the opportunity to enjoy a 360-degree view of products and therefore assess their wearability.
Besides the Luxury Store, which most reminds of Tmall by Alibaba, Amazon also signed a partnership agreement with the British Fashion Council for launching the “Amazon Fashion X London Fashion Week”.
JDcom, a Chinese portal that can rely on 400 million followers, has made some investments, following the encouragingly excellent results achieved during the pandemic, caused by Covid-19 outbreak. The platform hosts products made by over one thousand fashion and luxury brands. Some of them (WWD have mentioned Prada and Miu Miu) have been operating by presenting an omnichannel solution: the management of stock in stores is integrated with the online shop on JDcom.
For the records, such service will soon apply to some more luxury brands, such as Salvatore Ferragamo, Tod’s, Ermenegildo Zegna and Delvaux. The aim of the project is also to draw more brands to the portal, which wants to act as a competitor of Alibaba. “We want to be the king of luxury and we may well rely on a great potential to do it – pointed out Kevin Jiang, president of the platform’s international and fashion division, while talking to WWD –. Luxury sales potential in China, in the next two to three years, on the e-commerce channel, might be huge”.
Alibaba have been moving forward as they turned themselves, from simple retailers, into manufacturers. The group made public worldwide their own experimental digital factory they have opened in the city of Hangzhou. The name of the plant is Xunxi digital factory: it is up to production according to data flows taken from buyers’ shopping habits.
The factory, which – as reported by Bloomberg – “has been running under cover in the last three years”, is part of a “smart production” philosophy, which is due to engage companies actively playing in the area as well. By taking advantage of artificial intelligence and the items internet, they will have the opportunity to customise and rationalise production (in terms of quality, volumes and delivery times) according to buyers’ demand.
In so doing, profits will increase, and volumes of warehouse stock will decrease. The Xunxi factory is equipped with cutting machines, sewing machines and conveyor belts: they all can be manoeuvred remotely by using a smartphone, claimed Alibaba. Apparel is going to be the starting point. Yet, the aim looks much bigger: to help as many Chinese manufacturers as possible analyse data, computerise logistics and keep their warehouse stock record just-in-time.
Which is what Alibaba have been already doing for Chinese store chains and large-sized retailers. According to Alibaba estimates, reported by Wired, the factory might possibly augment its own manufacturing efficiency from 25% up to 55% on average, therefore reducing volumes of outstanding stocks, which currently account for around 30% of the industry loss.