Jonathan Smith 12 August 2019

Alibaba commits to O2O with “Tmall idea life club” experience centre in Shanghai

What’s New in China Online-to-Offline (O2O)?

Last month, the “Tmall Ideal Life Club” 天猫理想生活体验中心 experience centre landed at the Shanghai K11 Arts & Shopping Mall, where its launch edition welcomed the popular consumer brand Vans to host a street culture exhibition.

Initiated by Tmall, the largest ecommerce platform in China, “Tmall Ideal Life Club” is an online lifestyle program that features offline events and activities across China’s top-tier cities. With the platform’s own huge consumer data pool and in collaboration with premium brands, the program aims to elevate the presence of Tmall both online and offline and also enable brand partners to promote and grow awareness in key cities. 

Whilst the program remains at a relatively early stage of development, the Shanghai exhibition has attracted participation from a number of big brand names including Bobbi Brown, Ballantine’s, Oral B and Abbott. These brands presented a variety of offline experiences for visitors such as a beauty & fashion space (Bobbi Brown “彩妆时尚体验空间”), a blockbuster online show music party (Ballantine’s 《乐队的夏天》音乐狂欢Party), and an international art museum (Abbott 波士顿艺术博物馆的馆藏大师系列作品).  

According to Alibaba, the emergence and rapid growth of a new young and powerful generation of consumers (“Gen Z”) has forced retailers and brands to reassess their proposition. Price is no longer as dominant at the centre of the purchase decision with a strong brand experience becoming more important than ever. “Quality”, “original”, “fashionable” and “healthy” are among the new buzzwords driving interest from this core growth market. The “Tmall Life Club” experience centre is designed to tap into this trend. 

It remains unclear as to whether the “The Tmall Life Club” experience centre will prove a commercial success with many brands currently watching from the sidelines and considering whether or not to invest in an unproven activity for the return of first-mover advantage.

 

Key Considerations from Hot Pot

  • Brands that are looking to deliver long term value with China, especially amongst “Gen Z” consumers, must be looking at an omni-channel approach that integrates both online and offline experiences

  • Alibaba/Tmall’s regular launches of new initiatives such as the Tmall Life Club tend to be reserved for bigger brands who can negotiate significant exposure, traffic and footfall due to their existing sales volume on the platform

  • Brands with smaller budgets will struggle to see ROI directly from similar initiatives, and while Hot Pot strongly believes in the power of test-and-learn for China marketing activity, few brands will be able to roll out this approach across multiple initiatives simultaneously.

  • Regardless of size, brands will need to sense check and benchmark like-for-like activity, and pick initiatives cautiously to avoid significant erosion of ROI

  • Major China eCommerce platforms often look to major brands to act as guinea pigs for their own initiatives – if there is a suitable value exchange then this can help deliver on tactical goals, however the beneficial PR effect to Tmall/JD of the brand’s own participation should not be overlooked in negotiations