The Tmall flagship store model gives companies control over their marketing efforts, supply chain, and sales growth. This control is sacrificed when multiple distributers and multiple specialty stores are involved.
Luxury brands benefit from the flagship store model, as it allows them to focus on and maintain brand integrity through one sales channel.
Estee Lauder leads its China e-commerce efforts through a propriety flagship store whereas Lancome, Chanel, and Shiseido rely on multi-brand platforms and do not connect directly with the consumer.
Luxury brands are increasingly using China’s largest B2C e-commerce platform, Tmall.com, to build sales and expand market share in China. This spring, Burberry launched their own Tmall flagship store, and Estee Lauder followed suit less than a month later.
Other luxury brands, such as Lancome, Chanel, and Shiseido are also present on Tmall but instead through a variety of specialty stores that are likely operated by distributers. Based on sales from the past thirty days, Estee Lauder looks to be in the lead with over $9 million in annual sales. By operating a dedicated flagship store, Estee Lauder has the flexibility to manage their own promotions, refresh their site with new product lines as they see fit, and closely monitor sales.