Tuesday, September 20, 2016

Coach Closes Handbag Shop on Alibaba’s TMall

Coach said it would continue to provide online shopping via its own website and its WeChat account

Sep 14, 2016 5:30 pm HKT

Coach had decided to withdraw selling items on Alibaba’s TMall. Coach is a US owned company that specializes in high-end leather hand bags, shoes, and accessories. Alibaba TMall is a Chinese-owned business to consumer online shopping site. Coach said it would continue to sell products on its own site as well as a mobile social app called WeChat, which incidentally, is operated by Alibaba’s rival, Tencent Holdings Ltd. Coach said the decision was based on consolidating resources. Alibaba informed customers that they could still purchase Coach products from other merchants and reaffirmed that Coach’s decision to no longer sell products on the Alibaba site was due to an operations restructuring.  Coach was one of first high-end US brands to open a store on Alibaba’s TMall. Alibaba really wants to promote the sale of luxury brands on their site but the problem is that they have developed a reputation for not taken preventative measures in curbing the sale of knock-offs. In response to this, Alibaba started an anti counterfeit program that would hold the seller responsible for making sure brands were authentic. Subsequently, brands like Luis Vuitton and Sephora have started selling products on TMall. When doing business abroad, especially with third parties, marketers run the risk of losing control over pricing and quality. They want to be able to tap into large markets and feel that partnerships make the entry all the more easier because they are aware of local laws. Laws in certain countries may not be so stringent on the sale of counterfeits, such as those in China. So Coach saw pulling out of Alibaba’s TMall as more profitable than staying on the site. 

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