Double-Digit Growth In China Spurs Estée Lauder’s Recovery

The cosmetics giant Estée Lauder released its 2020 fiscal year results on August 20, and the New York-based company reported net sales of $14.3 billion for its fiscal year, ending June 30, 2020, which was a 4-percent drop from $14.86 billion in the year prior. The company’s net earnings amounted to $680 million compared to $1.79 billion over the previous period. Estée Lauder owns La Mer, Tom Ford Beauty, and MAC, and it recently acquired the South Korean skincare brand Dr. Jart+.

“Fiscal 2020 was a year without parallel, as we delivered record sales and exceptionally strong adjusted EPS growth in our first half and navigated with agility through an unprecedented pandemic in our second half,” said the president and chief executive officer of Estée Lauder, Fabrizio Freda, in the earnings call.

The beauty company’s gradual recovery from COVID-19 was primarily due to China. On the Mainland, net sales grew by double-digits on every channel (led by online) and saw double-digit growth in every product category and with almost every brand. Online made up over 40 percent of Estée Lauder’s sales for the fiscal year, and growth in China was partially driven by successful programs during key shopping moments, like Singles’ Day and the 6.18 Mid-Year Shopping Festival — but also by targeted and expanded consumer reach. Despite the curtailed travel retail section, its domestic travel consumption in China remained stable.

Luxury skincare products performed well, among other categories. Double-digit growth from La Mer was also driven by the Asia/Pacific region (with strong sales in Mainland China) and by travel retail, thanks to booming hero products. Targeted marketing also contributed to La Mer’s growth. The effects of COVID-19 heavily impacted makeup, particularly for foundation and lip products, as sales remained soft in most markets.

Estée Lauder also announced its Post-COVID Business Acceleration Program, with strategic priorities for the 2021 fiscal year rightly balancing investments alongside cost discipline due to the ongoing pandemic. The company plans to lay off 1,500 to 2,000 employees and close 10-15 percent of its stores around the world. These two measures are expected to save the company $300 and $400 million, respectively, over the year, according to the company.

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COVID-19 Helps Alibaba Beat Q1 Expectations

E-commerce giant Alibaba reported better-than-expected revenue during the first quarter (ending June 30), thanks to online economic growth fueled by COVID-19-related quarantines and businesses scrambling to adopt the group’s cloud computing services.

Group-wide revenue amounted to $21.8 million (154 million yuan) for Q1, which was a 34-percent increase year-on-year. Meanwhile, revenues from its China commerce retail business reached $14.3 million (101 million yuan) — also a 34-percent increase year-on-year — that accounted for roughly 66 percent of the company’s total revenue.

“Our domestic core commerce business has fully recovered to pre-COVID-19 levels across the board, while cloud computing revenue grew 59 percent year-over-year,” said Maggie Wu, Alibaba Group’s chief financial officer.

Like its competitors, the group’s e-commerce business expanded due to consumers’ growing reliance on online shopping and China’s early post-COVID-19 economic recovery. Alibaba’s biggest competitor in this arena,, also reported a stellar quarterly revenue increase of 33.8 percent.

Both of them can thank the mid-year shopping bonanza, 618, which saw platforms and brands offer consumer coupons and subsidies to help lure consumers into revenge spending. Both earned record-breaking sales results: JD with $34.5 billion (239 billion yuan) and Alibaba reaching $100 billion (698 billion yuan). Alibaba might have more staying power over future quarters, as its own promotional events happen in Q2 and Q3 (Tmall Super Brand Day on September 25 and Double 11 on November 11, respectively).

During the quarter, Tmall’s gross merchandise value grew by 27 percent year-on-year, while Tmall Global’s jumped by over 40 percent from a year ago. Alibaba said the numbers reflected strong consumer demand for branded products from overseas, with COVID-19 putting a halt to international travel sales.

As KOLs and merchants continued to connect with consumers through livestreaming in Q1, Taobao Live (Taobao’s livestreaming channel) saw its GMV grow by over 100 percent year-on-year, according to a company report that didn’t disclose conversion or sales numbers.

“We were well-positioned to capture growth from the ongoing digital transformation, which has been accelerated by the pandemic, in both consumption and enterprise operations,” said Daniel Zhang, the chairman and chief executive officer of the group, in a statement.

Zhang also mentioned in the earnings call that although globalization has remained the vision for Alibaba, his company would keep an eye on ever-changing geopolitical situations, which suggests that Alibaba might focus primarily on its home market soon.

The group’s cloud services contributed $1.7 million (12.3 million yuan) — or 8 percent — to its revenue. It became the largest public cloud service provider in China as of Q4 in 2019.

Having outperformed the broader US stock market over the past year, the company’s US-listed stock price shot up during pre-market hours but fell by almost 2 percent to below $255 per share after the market opened.

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Will China’s New Digital Currency Threaten The Dollar’s Reign?

What happened: A new round of successful trials is putting China on track to become the first country to launch a digital currency. The transition to a fully-digitized legal tender should be relatively painless for China’s citizens, who already use apps like WeChat Pay and Alipay to make most of their payments. But the renminbi-backed currency would also reshuffle the current field of payment providers on the Mainland, as a country-wide digital yuan rollout would redirect hundreds of millions of users away from their current digital payment providers and toward a new state-run app.

The Jing Take: While China has been developing its trailblazing digital yuan over the past five years, payment providers like Alipay have reaped massive rewards, overtaking banks in the electronic payments arena. Combined, Alipay and Tencent’s WeChat Pay have enabled payments for over one billion users through QR-code scans — a market that’s valued by iResearch at over $19 trillion. But the recent acceleration of state trials indicates that Beijing wants to halt this monopoly, and Chinese media outlets have reported that WeChat Pay and Alipay are already considering cutting their staff.

Moreover, this rollout would have the potential to not only derail domestic monopolies but also disrupt the global monetary system. Specifically, it could be seen as a direct challenge to the globe’s preferred currency: the dollar.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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How Chando Uses Private Traffic to Draw Customers

This post originally appeared on Azoya, our content partner. 

The concept of private traffic has generated much buzz amongst marketing circles in China over the past few months.

Private traffic, or private domain traffic, is traffic that comes from the brand’s own curated channels and tends to be more sticky. The most common example is setting up a 500+ person WeChat group for VIP customers of a particular brand. In such groups, brand employees and shop attendants can send updates regarding discounts, special promotions, gifts, raffles, and even virtual games that the brand is holding for loyal customers.

While in the West, brands use e-mail to keep in touch with their customers, in China, e-mail is less commonly used and brands needed to think of other ways to keep their customers engaged. As new customer acquisition costs through digital advertising and influencer marketing skyrocketed, brands began to turn to such private WeChat groups to better engage and retain their customers.

We take a look at Chinese skincare brand Chando and the way it combines WeChat marketing, livestreaming, and WeChat groups to create its own pool of private traffic.

WeChat Ads + Mini-Program + Livestreaming

Chando is a popular skincare brand that has existed in China for about 20 years. It launched an official WeChat mini-program in September of last year, in order to engage and sell directly to consumers.

What Chando did was use ads to direct people to its WeChat account; sometimes it offered discounts or a trial of free samples to get customers excited. This year in particular, however, the company has used livestreaming to acquire customers.


Chando’s CEO Mr. Zheng (left) joins a live stream event

Chando’s WeChat mini-program held a special livestreaming event on July 14th, in which the brand’s CEO Mr. Zheng Chunying joined as the main guest.  Instead of selling products, the 2-hour live streaming event highlighted the brand’s main production lines and R&D laboratories to show how the brand produced its items. According to Tencent Live data, the two-hour live broadcast attracted nearly a million views.

At the same time, the customers could click on a link to go directly to Chando’s WeChat mini-program store, where they could register as members and get a 20 RMB cash coupon through scanning QR codes shared by the livestreaming hosts. This coupon could also be used in offline retail stores.

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Mr. Zheng at a R&D laboratory

Private WeChat Groups 

Chando also set up one-on-one personal customer service functions and established a private VIP WeChat group. These moves were designed to improve customer engagement and direct them to use the newly acquired coupons.

In any case, once consumers enter the mini-program store, they automatically follow the brand’s official account and the brand can subsequently send updates in the future.

As part of the omnichannel campaign, staff attendants at offline Chando stores also invited potential customers to join VIP WeChat groups, which continued to notify customers of future promotions and discounts.

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Such private WeChat groups enabled the brand to engage both customers who had already made a purchase, and those who had not.

Private traffic campaigns are also sometimes combined with group-buying deals that incentivize current followers with discounts to bring in new followers, in essence subsidizing new customer acquisition. Since word-of-mouth marketing is particularly effective in China where customers tend to rely on friends and family for recommendations, these group-buying deals have become more and more common over the past two years.

Membership Enrollment

When new users sign up to be members, Chando invites them to fill out an optional survey, which includes questions on their skincare needs, frequently-used skincare brands, age groups, and commonly-used social media platforms. This data is used to craft different customer personas, so that Chando can better cater its value-added services and products to different people.

After members sign up, they are invited to participate in a lucky draw inside the WeChat account. They are entitled to a trial of free product samples, which can play an important role in incentivizing purchases.


Content Marketing and Product Seeding

Chando created two sections for content on its mini-program store: a product seeding page and a Beauty Academy page.

For the product seeding page, key opinion consumers (KOCs) or beauty influencers are invited to share their experiences on Chando’s products; the format looks a bit like snapshots from Little Red Book, including personal comments and reviews.

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The beauty academy consists of an archive of articles that include makeup tutorials and product information; such content is necessary in China because many people are still new to multi-step makeup processes. Since Chando targets younger customers, this is even more important.

Key Takeaways

1. Private traffic is when brands create their own customer groups to engage them better, without relying on expensive advertising channels.

2. Chando uses a mix of ads, livestreaming, free product samples, and more to encourage people to follow its WeChat account.

3. Chando then invites followers to join VIP WeChat groups, where it can send follow-up campaigns and other promotions.

4. New followers are invited to fill out a survey about their skincare needs and daily habits; Chando uses this data to create customer personas and better cater its value-added services to the right customers.

5. Lastly, Chando also invites customers to provide user-generated content, and has an archive of content for those using its products for the first time.

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China’s Version Of ‘Recession Fashion’ Could Change Global Styles

Fashion during recessions tends to sober up and go quiet. With unemployment on the rise and social inequality worsening, even the rich and carefree theoretically want to hide their wealth. At least, that’s what happened after the 2008 economic crisis. In 2009, catwalk styles in the world’s fashion capitals made a drastic shift away from shiny, early-2000s opulence and towards classic and solemn comfort. And although this rule of recession fashion has again reigned in the Western hemisphere thus far in 2020, it hasn’t applied to China. In fact, the nation’s fashion faithful are increasingly embracing a bonanza of boldness, excess, and style. This contrast has created an urgent dilemma for brands: Do they go bold to attract Chinese consumers or remain sober for Westerners?

According to “The True-Luxury Global Consumer Insight Survey,” which was conducted by the consultancy BCG in June, global fashion tastes have become increasingly polarized in these post-pandemic times. A preference for “extra” values in luxury increased by 14 percent for Chinese, while it dropped by 9 percent among Westerners. The survey showed that fashionistas in Western countries were returning to more traditional values like craftsmanship and timeless qualities or aesthetics. Meanwhile, their Chinese counterparts, who are younger and wealthier, tend to favor elements that portray extravagance, fun, and excess.

Beyond consumer surveys, China’s maximalist fashion sensibility was also on display at recent big-ticket events. In August, the #LVMenSS21 Show in Shanghai showed a wickedly colorful and over-the-top parade. From suits with cartoon motifs to sunglasses with daring designs, Louis Vuitton’s artistic director Virgil Abloh presented items that were more likely to get likes on social media than get a daily wearing. A few days later, Balenciaga launched a Qixi (Chinese Valentine’s Day) campaign that mimicked China’s trendy and Gen Z-friendly “too cool” aesthetic via handbags emblazoned with the graffiti-style slogans like “I love you/I love me/He loves me.” Both of these moves were proof of the current market’s demand for provocative styles rather than plain classics.


The recent #LVMenSS21 Show in Shanghai showcased bold, daring looks. Photo: by Louis Vuitton

But China’s current appetite for “loud” fashion resonates very little in the Western world and is even being seen as culturally scandalous. In an interview with CNBC, the global chief learning and culture officer at the consultancy Interbrand Group, Rebecca Robins, said that we’ve seen “the resurgence of quiet luxury and understatement, as evidenced in the more timeless aesthetics of brands such as Hermès, Prada, and Bottega Veneta.” That’s because, in the West, there’s a widespread, underlying sentiment that flaunting conspicuous purchases during an economic downturn is seen as being “tone-deaf.” Instead, the Western media prefers using language such as “slow,” “ethical,” or “sustainable” fashion to appeal to a distressed public.

Behind these polarized values underlie the very different mainstream narratives of the pandemic in these two societies, which led to people’s distinct worldviews. In the West, the youth generally sees the pandemic and its devastating socio-economic consequences as a collapse of system: it is an inequality crisis transformed into a generational misfortune. Meanwhile, the lessons that a young Chinese drew from the crisis are very different. Many expressed a renewed faith in the Chinese government and heightened confidence in China’s collectivist social structures. According to BCG’s June survey, Chinese nationals are the most optimistic consumer group among all respondents, with 77 percent expressing the belief in rapid social recovery after the crisis compared to the 43 percent average.

The nation’s insular informational environment, exemplified by the Great Fire Wall, has also filtered out socio-political discourses outside of China to its citizens, leaving most unaware of the global cultural currents. In the Chinese narrative, the country’s post-COVID19 reality is more equitable, positive, and hopeful than the deeply disturbed West. This narrative has resulted in not only higher consumer confidence among its citizens, but also their self-perceptions. As a survey by the wealth research firm Altiant reveals, over a third of the wealthy consumers in France, the UK, and the US confessed, “this pandemic made me question my consumption of luxury goods.” In China, only 16 percent felt the same way.

Still confident and proud, China’s fashion community has valid reasons to pursue shiny clothes. But according to @流行色YC, a senior fashion editor with nearly 310k followers on Weibo, this preference stems from the country’s relatively short engagement with fashion. “The COVID-19 crisis aside, China’s fashion development is still at an early, immature stage,” she said. She pointed out that in a mature market such as Japan, different styles would coexist, while even the niche brand could find its supporter community. “Chinese customers prefer extravagant and fun pieces because people have a relatively ‘weak’ understanding of fashion. Designs made for individual enjoyment, rather than enjoyment of the others, clearly do not have the edge to win in China’s competitive social media landscape,” she continued.

Balancing China’s quest for opulence and the West’s calls for discretion will be the next big challenge for global luxury houses. Making up more than half of the world’s luxury consumption by 2025, Chinese consumers have already transformed the industry by forcing brands to adapt to their digital norms. Now brands need to adapt stylistically, as well.

Susanna Nicoletti, a senior marketing executive and the lecturer at Istituto Marangoni, told Jing Daily that the fashion world would inevitably adapt to China’s extravagant taste because of business pressure. She describes the Chinese market as a “honey trap” that drives the industry’s business and imposes future risks. “Most brands will have to craft products and customer experiences focusing on Chinese customers and to neglect Western customers,” she said. “But even in this case, the risk to become subjugated to a specific target will be very high. Brands will give up on creativity and adopt ‘reactivity,’ producing what is sellable to a specific target with a bottom-up approach instead of being the trendsetter, as it was in the past.”

While it’s still uncertain how the pandemic will unfold and impact luxury, one trend is clear: As polarization continues to define socio-political narratives in the West and China, global fashion tastes will become more divisive. And, given how the business has shifted toward Chinese consumers, adhering to the Eurocentric beauty standard might not be the answer to brands’ aesthetic questions anymore.

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Lingerie Brand NEIWAI’s Surprising Global Ambassador Wins Social Praise

What Happened: The Chinese lingerie brand NEIWAI announced its new global ambassador, Faye Wong, on August 19, ahead of the brand’s Tmall Super Brand Day on September 25. In the announcement poster, the 51-year-old Wong sports a 999-yuan (about $144) purple merino wool turtleneck, while casually looking down, hands in her pocket.

By the end of the day, the announcement had received an overwhelmingly positive response on both WeChat and Weibo. “This slogan reminds me of what Wong said about being comfortable in her own skin,” one Weibo user wrote while posting a photo of the physical poster she snapped at a shopping mall. While other users commented that “NEIWAI looks like Celine on Wong!”

Faye Wong is a well-known name in the Chinese-speaking world, mainly as a singer and actress in the 90s and the early 2000s. As a Beijing-native who migrated to Hong Kong in her late teens, she sang in both Mandarin and Cantonese, and has appeared in many of the Hong Kong film director, Wong Kar-wai’s, most popular movies like Chungking Express (1994) and 2046 (2004).

Jing Take: In an endless sea of twenty-something-year-old brand ambassadors, NEIWAI’s choice is thoughtful and on-brand. Given that most luxury brands are after the latest “fresh meat” idols, lingerie brands have followed the same pattern in China when it comes to selecting a new ambassador. It’s not uncommon for the likes of La Mer, Wacoal, and Victoria’s Secret to go after Chinese supermodels and young actresses. As for the homegrown brand Cosmo Lady, it replaced the 45-year-old Taiwanese model Lin Chi-Ling with Guan Xiaotong, a 22-year-old svelte actress, which is more in line with the perceived age ceiling of lingerie ambassadors.

Meanwhile, NEIWAI’s on-going marketing message, such as the “No Body is Nobody” campaign launched before the recent International Women’s Day, has been breaking the mold by encouraging diversity and inclusivity. Their latest announcement is an extension of that.

NEIWAI’s ambassador of choice also happens to tap into the current “sister” trend. Given the recent rise of popular TV shows like Sisters Who Make Waves (乘风破浪的姐姐) and Nothing But Thirty (三十而已), there is more recognition of an older women’s struggles and needs, which makes Wong’s independent personal brand image as aspirational as her look.

And finally, one cannot look at the brand’s marketing approach separately from its business plan. Chinese diaspora, who NEIWAI aims to target next with its global expansion, may not know the latest young celebrities, but would see Wong as a familiar face, which could be a comforting entry point for a brand looking to reach a wider, more global customer base.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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What’s The Future Of Retail Real Estate in Hong Kong?

The days when Hong Kong was the envy of the world seem long gone. In fact, after months of ongoing violent protests, rising unemployment, a pandemic, and ensuing government lockdowns, Hong Kong’s appeal is starting to vanish.

Furthermore, the arrival of an unanticipated recession (Hong Kong’s economy shrank 8.9 percent in its worst contraction on record) is alarming both overseas investors and the local business community. Now, the city’s economic and socio-political instability are cooling off its once-flourishing real estate market. And in a challenging market, even real estate assets that once brought high-yield returns could become liabilities.

In May, Bloomberg reported on a failed government auction in Hong Kong where a Kai Tak commercial plot that was up for sale had to be withdrawn. According to the South China Morning Post, the four submitted bids were too far below the government’s undisclosed reserve price. The move came after appraisers had decreased estimates for the land’s value by 20 percent to between $820 million (6.38 billion HKD) and $1.35 billion (10.44 billion HKD).

But that’s far from the only negative real estate news to come out of Hong Kong. According to Cushman & Wakefield’s estimations, Hong Kong’s property prices could end up falling by up to 20 percent. And according to data from Centaline Property Agency, average rent prices are also falling. In March, the average rental fell by 2.3 percent month-on-month to $4.37 (33.9 HKD) per square foot.

Office space has also registered a significant drop. The World Property Journal reports that Hong Kong’s office market vacancy rate reached a 12-year high. Furthermore, International property consultant JLL’s latest Property Market Monitor highlights how Hong Kong’s Central’s Grade A office rents fell 2.7 percent to $13.20 (102.4 HKD) per square foot this May while the vacancy rate reached 5 percent.

Nelson Wong, head of research at JLL in China, told the World Property Journal that “the overall Grade A office market recorded a negative net take-up of 196,500 per square foot in May due to the slowing leasing demand. In Central, the market recorded a negative absorption 115,600 square feet — the highest monthly net withdrawal in more than a year.”

Despite specific challenges to different sectors, retail properties remain one of the hardest hit, with tourism and business travel being brought to a standstill and retail collapsing against the backdrop of protests and COVID-19. It’s a situation that has become increasingly challenging for commercial property developers.

The South China Morning Post reports that Sun Hung Kai Properties, the biggest Hong Kong developer by value, has seen its hotel operating profits drop by three-quarters to $25.4 million (197 million HKD). Meanwhile, Sino Hotels saw a profit decrease of 93.4 percent to $825,800 (6.4 million HKD) for the six months beginning last December 31.

Commercial retail on Russell Street has also seen a drop. The Real Deal reports that first-quarter rents on the acclaimed high-end street were 27 percent lower than in 2019. Despite these price drops, luxury retailers Prada, Louis Vuitton, Tiffany & Co., and Victoria’s Secret have already announced their plans to vacate Causeway Bay.

It’s safe to say that Hong Kong’s status as the world’s priciest market is being called into question. The city will remain one of Asia’s top luxury hubs. But given the animosity between Mainlanders and Hongkongers, Trump’s probable tariffs, and the ongoing protests, investors are right to be reticent about the future of Hong Kong’s real estate market.

We foresee that, in the short run, luxury brands will continue to downsize their footprint in the city, and real estate prices will continue to fall. Nevertheless, the long-time effects aren’t as grim. Hong Kong’s proximity to China and the positive attitude of the business community towards the new security law shouldn’t be underestimated. While the security law could restore a certain level of stability, it will also encourage affluent mainland Chinese to return to their former favorite shopping destination. Also, Hong Kong’s proximity to mainland China has transformed the city into a global business hub, so it’s doubtful that international companies will leave the territory, even if their own governments exercise pressure.

According to the 2019 Annual Survey of Companies in Hong Kong with Parent Companies Located outside Hong Kong (SCoP), the number of overseas and mainland Chinese companies in Hong Kong rose by 9.9 percent to 9,040 in 2019 (up from 8,225 in 2017). Of the countries with the most businesses in Hong Kong, Mainland China ranked first with 1,799 companies, followed by Japan (1,413), the United States (1,344), the United Kingdom (713), and Singapore (446), according to Hong Kong Business.

Ultimately, we view this sudden drop in real estate prices as a market correction of overheated asset prices. Hong Kong’s real estate market won’t crash as long as there is a limited supply of inventory and strong demand, and the city’s supply-demand unbalance favors higher prices. Therefore, smart stakeholders are likely to continue chasing investment opportunities there.

Over the long haul, Hong Kong will remain a profitable real estate hub. Despite the deteriorating economic outlook, the city continues to be a seller’s market, which is why smart investors know that even when there’s a temporary drop in profits, they still need to keep their property portfolios balanced and trust that the city’s real estate market will eventually roar back.

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Alimama Predicts Gen Zers and Lower-Tier Cities Will Rule Fashion

What Happened: On August 18, Alimama — Alibaba’s marketing, technology, and big data platform — released an insight report profiling Chinese fashion trends and consumer behaviors. The report found that China’s Gen-Z made up 30 percent of Alibaba’s total consumption, increasing by over 400 percent year-on-year. The study is further proof that this age bracket has become the most lucrative one amid the current bear market. Meanwhile, fashion retail consumption increased by over 300 percent in first- and second-tier cities in China but grew by 570 percent in third- through sixth-tier cities. Moreover, niche trends continue to inspire more collaboration opportunities.

Jing Take: Alimama developed its insight report with big data coming from Alibaba’s retail platforms, so it is a good indicator of where China’s fashion business will be heading, and therefore, what moves brands should make to attract consumers. In China, Gen Z is gradually taking the reins from millennials to become the top consumption drivers, which was exemplified by Balenciaga’s new Qixi campaign. For it, the brand adopted the “Too Cool” style that is currently favored by fashion-forward Gen Zers.

The youngest spending generation is powering many of the new fashion trends listed in the report, as that market aspires to differentiate themselves from older generations via unique or niche tastes. At the same time, the power of lower-tier cities in China cannot be underestimated thanks to the rapid development of telecommunications technologies, affordable smartphone costs, and convenient express delivery services that support expedited spending.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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Suning Makes Moves Into Luxury Commerce and Douyin Content |

This post originally appeared on Content Commerce Insider, our sister publication on branded entertainment.

Following in the footsteps of rival, mega-retailer Suning is making a bigger push into content and high-end commerce with recent bold moves.

  • Suning is best known as a mass-market bricks-and-mortar retailer focusing on home appliances and consumer electronics (akin to Best Buy in the U.S.), with more than 8,200 self-operated stores across the country and another 4,500 franchises in lower-tier markets, and it has been on an expansive acquisition spree to diversify its offerings while growing into a major force in e-commerce.

  • Last year it took over French supermarket chain Carrefour’s China business and added 37 Wanda department stores to its holdings, and it has opened a series of concept stores under the Jiwu brand that focuses on European products. Alibaba is one of its major investors with a nearly 20% stake.

  • In a deal similar to the one announced in June by and Kuaishou (both backed by Tencent), Suning will partner with Douyin to allow the short video app’s 400 million daily active users to purchase goods from Suning without having to leave the app, and Suning will provide guarantees of product authenticity, logistical support, and after-sales service.

  • That strategic partnership kicked off on August 7 with a livestreamed sales broadcast on Douyin hosted by celebrity entrepreneur-turned-salesman Luo Yonghao, who has become one of the biggest names on Douyin since he started his livestreaming career on the platform back in April. Luo sold a reported RMB 200 million ($28.7 million) worth of products during the four-hour broadcast, breaking his previous sales record from his April 1 debut — and this was really just a warm-up for Suning’s upcoming “818” sales event that will mark the company’s 30th anniversary on August 18 in a much bigger manner.

  • Like, Suning is also seeking to move into luxury e-commerce, launching its first luxury festival from August 4-6, though its marketing strategy appears to have been geared towards heavy discounts, with cash coupon giveaways and prices on high-end brands such as Gucci, Prada, and Armani cut by as much as 50% (the company has promised to supply certificates of authenticity for all products.)

  • Suning announced that actress Jiang Shuying will be its new brand spokesperson. Jiang is currently in the spotlight for her starring role in the hit female-focused drama “Nothing But Thirty” (三十而已), in which she plays Wang Manni, a salesperson at a high-end department store with high standards for customer service and integrity.  Since its premiere last month, “Nothing But Thirty” has been one of the hottest topics on Chinese social media, including on Douyin. Suning leveraged that popularity by inviting Jiang to host a livestream as part of the luxury festival. Broadcasting from a Suning Jiwu store in Shanghai, Jiang offered a selection of designer goods and beauty products inspired by the show, shared insights into her character’s story arc, and tips on how to be a top seller like Wang Manni along with her beauty tips — including a shout out to Lancôme’s 196 lipstick shade, which is now promoted by the brand as the “Manni color.”

  • It’s a promising start to upgraded livestreaming for Suning and comes as e-commerce has grown to play a critical role in its business — it’s the fourth largest online retailer after Alibaba, Pinduoduo, and In the first half of the year, online sales accounted for 70% of Suning’s total, first due to the immediate impact of the coronavirus, and later thanks to heavy online sales promotions aimed at boosting the recovery of consumer spending, such as June’s 618 Shopping Festival.


E-Commerce, Retail

Source link’s Revenue Jumps ‘Beyond Expectations’ for Q2

Chinese e-commerce giant beat analysts’ expectations over the second quarter of 2020 (ending June 30) by logging $720 million (5 billion yuan) in income.

During Q2, the company’s revenue grew by 33.8 percent to $ 28.5 billion (201 billion yuan) year-on-year. The sales of general merchandise products and services increased 45.4 percent to $9.1 billion (64 billion yuan) and 36.4 percent to $3.2 billion (22.9 billion yuan), respectively.

Q2 has seen the Nasdaq-listed e-tailer take large strides in transforming into a supply chain-based tech company and service provider. It also pocketed $3.9 billion during its second listing on the Hong Kong Stock Exchange despite market concerns over delisting threats from the US.

Among major business activities for the quarter, its mid-year 618 shopping bonanza was embraced by a national audience that was eager to spend after a long bout with the COVID-19 pandemic.

Xu Lei, the JD Retail chief who has slowly been taking the reins from chief executive officer Richard Liu, said the company’s extra marketing activities fueled the outstanding results from this year’s 618. “Together with partners, we have done a lot of marketing activities on decentralized platforms,” he said through an interpreter during the earnings call. “The results are beyond our expectations.”

Meanwhile, Sandy Xu, the chief financial officer of, said in a statement that “our scale advantages and cost efficiency enabled us to provide attractive prices during our June 18 sales promotions… as China’s economy emerges from the difficult pandemic period.”


In the company’s transformation to become a logistics service provider, has been ramping up logistics expansion in China. Photo:’s Q2 Presentation

In the company’s transformation to become a logistics service provider, has been ramping up the expansion of its logistics in China. Just before the 618 Shopping Festival, JD Logistics announced plans to provide 24-hour delivery service in second-to-fifth-tier cities. And after recently buying a stake in one of the world’s oldest supply chain managers, Li & Fung, it announced it was acquiring Shenzhen-based Kuayue Express for $432 million (3 billion yuan) on August 13.

JD’s logistics services upgrade is also expected to benefit JD Retail, which oversees partnerships with luxury fashion and beauty brands. During Q2, wooed several luxury brands to launch on this platform, including Prada Group’s Church’s, Christopher Kane, Tom Dixon, and Sergio Rossi.

The e-tailer’s stock shot up by more than 6 percent to $66 a share during Tuesday’s pre-market hours and opened at $65.02.

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