Milan Fashion Week Pivots to Livestreaming Amid Virus Fear


The Jing Daily Fashion Week Score evaluates how a brand’s collection resonates with the Chinese audience through a range of parameters. Our lens is now on Milan Fashion Week. 

Last Wednesday, Milan Fashion Week opened on a high note, featuring the solidarity event “China, We Are With You.” Targeting at the majority of China who are still in lockdown, the event’s organizer, Camera Della Moda (National Chamber of Italian Fashion), collaborated with Tencent to livestream all of its runway shows. More than 30 brands garnered 16 million views on Tencent Video, and the Weibo hashtag featuring the slogan has a whopping eight million reads by the end of the last day.  

For Milan Fashion Week Fall 2020, Jing Daily looks at brands who have a stake in the Chinese market and who stand to gain from heightened efforts. Brands like Prada and Giorgio Armani impressed Chinese netizens with a sustainability initiative and solidarity with China’s fight against Covid-19, respectively. Without the attendance of Chinese celebrities and KOLs due to travel restrictions, Gucci leveraged the power of K-pop stars, which made a splash for the brand on Weibo. Dolce & Gabbana, meanwhile, has a long road to recover from its blunders from November 2018.

The Jing Daily Fashion Week Score is based on the following parameters:

  • Model representation: evaluates representation of Chinese models on the runway.
  • Digital impact: evaluates Chinese netizen reception and engagement on leading social media platforms including Weibo, WeChat, and Little Red Book.
  • KOL & celebrity visibility: considers star power associated with the brand through strategic KOL and celebrity partnerships.
  • Special brand efforts: considers special programs or efforts on a brand’s part to speak to the Chinese audience. Companies’ or brands’ contribution towards the on-going virus crisis are also considered.
  • Design context: a qualitative assessment of how the brand’s collection will speak to the Chinese audience based on current trends and preferences.
  • Brand history: considers existing brand history in China, including overall presence, social reach, number of stores, earning trends and brand missteps.

PRADA 

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Illustration: Haitong Zheng/Jing Daily.

Prada took the leading position of our Milan Fashion Week score this season despite the large absence of Chinese celebrities and influencers. Having integrated digital strategies to their daily communications with the Chinese audiences, the Italian luxury house dealt with the challenges from the Covid-19 virus without a hitch. Along with livestreaming the show on its website, Prada used its runway WeChat Mini Program for the third time, featuring the show’s looks, runway details and behind the scenes shots of celebrities. Though Cai Xukun, the brand’s Chinese spokesperson and ultimate engine of rejuvenating its image and engaging younger customers couldn’t make the show due to travel restrictions, it still drove extensive online traffic thanks to the presence of the Korean singer Lisa from the girl group Blackpink, who has an incredible following in China, having gathered over 1.6 million Weibo follower in two months. The K-pop star seemed to take over Cai’s role – her golden suit look has been extensively reposted on Weibo and Little Red Book. Besides the dazzle of the star power, the fusing of technology and sustainability in the latest Linea Rossa collection well-received by Chinese netizens, adding more credit to the brand’s long-term dedication to fashion sustainability. Meanwhile, the addition of Raf Simons joining Prada with Miuccia Prada, as disclosed last Sunday, sparked off positive reactions among Chinese netizens. And the soft opening of Prada’s Tmall flagship store on Monday is promising as an offset to the disruption of offline retail.

BOTTEGA VENETA 

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Illustration: Haitong Zheng/Jing Daily.

Kering’s reviving star Bottega Veneta, led by Creative Director Daniel Lee, has gained worldwide fashionistas’ interest over the past few seasons. Similar to the influencer frenzy around Bottega’s iconic pouches and sandals on Instagram, Chinese fashion KOLs are catching up with “the new Bottega” hype. Correspondingly, the label increased their digital marketing efforts for this season’s runway show, launching an eye-catching Weibo ad that seamlessly guides the user from the ad to the brand’s website. Plus, the addition of the Korean actress Song Hye-Kyo’s, who is well known in China, helped dilute the absence of Chinese celebrities. Her all-black outfit paired with the newest Bottega chain pouch was praised by Chinese netizens, commenting that Song represents the brand’s identity perfectly. Having proved its talent for social marketing and keeping consistency in visual narratives, Bottega Veneta is expected to earn stronger brand loyalty among its valued Chinese consumers.

GUCCI 

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Illustration: Haitong Zheng/Jing Daily.

On this year’s catwalk, Gucci’s creative director, Alessandro Michele, impressed audiences with his bizarre aesthetic once again. Through a vintage-doll inspired “rituals” presentation, Michele combined intense lace, ruffles, and velvet into poplin blouses and pleated skirts, evoking a wild childlike aesthetic, while flavored with leather jackets, hippie maxi dresses, and animal print accessories to shed light on the 70’s romantic grunge. As an experienced luxury player in the digital world, Gucci leveraged comprehensive social media strategies to improve its online presence. It’s elaborate runway show could be seen via the brand’s WeChat Mini Program, delivering the first-hand looks and details to remote Chinese audiences. Elsewhere, the show livestreamed on Weibo received over eight million views and 64,300 engagements. Similar to Prada and Bottega Veneta, Gucci also eyed the huge influence of Korean talents in China, highlighting K-pop star, IU, who commented on the show via Weibo and WeChat posts. Besides the positive reactions from IU’s fans, some voices indicated that they looked forward to seeing more innovations beyond Michele’s vintage representations. Young Chinese, after all, are all expectating newness from the brand. 

MONCLER 

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Illustration: Haitong Zheng/Jing Daily.

This season’s Moncler Genius show added to the brand’s creative experimentation, recruiting JW Anderson as a new Moncler Genius designer, as well as teaming up with Rimowa and Rick Owens. The eight Moncler Genius collections on display continued disrupting audiences’ imagination on what the puffy jacket can be, exploring the intersection between functionality and high fashion. The show was indeed well-received by Chinese netizens, earning over 43,200 views on WeChat and engaging 500,000 discussions under the hashtag #MonclerGenius. WeChat user Lydie Li commented below the official runway post, “the show feels like an immersive contemporary art exhibition at Centre Pompidou.” The positive reception on China’s social media, however, did not happen overnight. The brand had started warming up for the big day on Weibo since Feb 2. On WeChat, the house runs a Mini Program “Moncler House of Genius,” which tracks all important moments of the series and drop updates. Last December, the brand opened a brick-and-mortar store in Beijing’s SKP-S mall, featuring limited editions Moncler Genius looks in hopes to engage younger customers with a refreshing shopping experience. Though the virus outbreak brings unexpected challenges to both Moncler’s offline and online operations, the house can continue to connect with its Chinese customers as long as it stays flexible and is prepared for the long-term. 

GIORGIO ARMANI 

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Illustration: Haitong Zheng/Jing Daily.

The famed Italian designer raised attention at this season’s MFW despite the show being presented behind closed doors as the Covid-19 virus spread through northern Italy. The highlight moment of the virtual show — with warm regards to China and the Chinese citizens — was 12 looks inspired by the Chinese culture from the Giorgio Armani Privé spring 2009 and 2019 collections and casting 12 Chinese models to present the looks. Mr. Armani said, of China, that he “has always maintained a special bond, both aesthetic and cultural.” His considerate message received large coverage from both the fashion media and KOLs. And such posts reinforced the emotional connection between the designer and the Chinese consumers. Though a few fashion KOLs critiqued the lack of newness in the fall collection, the overall discussion on the brand was positive, with so much attention on China and what it’s going through right now. 

FENDI 

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Illustration: Haitong Zheng/Jing Daily.

Chinese online viewers were impressed by the brand’s theme of women’s soft power, but mainly they had their eyes locked on Fendi’s new handbags. “Peekaboo gives me surprises every year!” was one comment under the brand’s official WeChat post. Without the attendance of Chinese celebrities, Fendi has made a commendable effort to invite a number of Chinese (and Chinese adjacent) KOLs, such as the influencer @yuyuzhangzou, former fashion editor @江南BoyNam, Taiwanese influencer Molly Chiang, and Korean actress Han Ye-seul, who collectively have about 11 million followers across Weibo and Instagram. Also, it commissioned fashion illustrator and blogger @JiWeiJW to do illustrations of several runway looks, which was then used as the main image for its official WeChat and Weibo post. The special collaboration may have only received hundreds of impressions on Weibo but shows that the brand is quick on its feet on diversified marketing in a lockdown age. 

TOD’S 

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Illustration: Haitong Zheng/Jing Daily.

The debut collections of Tod’s new creative director, Walter Chiapponi, was supposed to be a big moment for the brand; however, the excitement for both the men’s and women’s lines, which Chiapponi designs, did not translate to Chinese media. As the runway happened, Weibo users were busy marveling at Tod’s ambassador Liu Haoran’s new photoshoot, which had 15 million reads for two variations of the hashtag #Tod’sambassadarLiuHaoran (#Tod’s品牌大使刘昊然). Underneath “fresh meat” Liu’s photos, Tod’s official Weibo post on the runway paled in comparison, generating only one-tenth of engagement with thousands of impressions. Meanwhile, Tod’s official WeChat post has garnered a strong click rate, with  25,000 views, but it lacked engagement. The brand’s ambition for the China market, however, is loud and clear, given that it announced two new brand ambassadors, actress Jiang Shuying and actor Tong Dawei, for Greater China last year, and also collaborated with the influential blogger Mr. Bags for more exposure this season. But its organic connection with Chinese netizens still remains untapped.

SALVATORE FERRAGAMO 

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Illustration: Haitong Zheng/Jing Daily.

Newly appointed Creative Director Paul Andrew may have only taken the helm for a year, but his understanding about modern women’s multifaceted needs comes through for the fall/winter 2020-2021 season, thanks to his experience spearheading the brand’s women’s department. The runway looks, from the variations of pantsuits and dresses to the unconventional uses of leather and models’ naked makeup looks, fit right in with the notion of an independent modern Chinese woman. The show also invited iconic models Doutzen Kroes and Irina Shayk to walk the runway, which was a welcomed touch, as they have been long missed by Chinese social media.

MAX MARA 

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Illustration: Haitong Zheng/Jing Daily.

Seen as a synonym for the camel coat by Chinese shoppers, Max Mara’s show this season made an impression on par with its presence in China: quiet but steady. The brand made three official WeChat posts, which garnered 37,000 reads. On Weibo, users praise this season’s earthy colors and hues and linked them to the beauty of nature. Despite only having two Chinese models for 48 looks, its choice of having Kaia Gerber opening and closing the show gave a boost to its social volume in China. However, if one searches for articles about the brand, top posts are still about the camel coat, which may be a blessing and a curse. Can Max Mara be remembered for other things?

DOLCE & GABBANA 

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Illustration: Haitong Zheng/Jing Daily.

From runway to social media, Dolce & Gabbana’s Fall 2020 show missed its mark in China. This season’s show celebrates Italian artisanship, which resonates with its latest Weibo post featuring silk scarves that pay tribute to traditional Chinese culture, but all the comments one could see are bashing the Italian fashion house, whose cultural misstep in 2018 keeps haunting it until today. The brand has tried to amend their mistakes. After the Covid-19 outbreak, the company donated to Humanitas University, an Italian private university dedicated to the medical sciences, to study the virus, but neither the public nor the Chinese fashion professionals reciprocated. The brand has made no effort in reaching the Chinese market digitally, nor had any major KOL or Chinese models in attendance, although it’s likely that the invitations would be turned down. After the brand’s 2018 advertisement scandal and the revealing of co-founder Stefano Gabbana’s alleged Instagram message, its Shanghai show was canceled and 320 models and over 40 celebrities and KOLs either boycotted or were left disheartened by the cancelation. The VIPs might be ubiquitously missing due to the virus, but they may not be back at all. 





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What’s Behind the Rise in Inequality and Consumerism?


While walking around China’s hi-tech cities, from Shenzhen to Shanghai, Beijing to Chengdu, it is impossible to ignore the signs of consumer culture. The country has come a long way since its impoverished and socialist past — being now the quintessence of a consumer society. In fact, it built the contemporary economic boom on the shoulders of the modern Chinese consumer.

To give some context, McKinsey highlights that from 2000 to 2010, consumption grew from around $650 billion to almost $1.4 trillion. And, it would be a great mistake to associate the consumption growth only with the big spenders and ultra-wealthy; the newly established middle-class is the real economic force. McKinsey predicts that in fact the Chinese middle-class could reach 550 million by 2022 and the urban-household income will double by the same year.

Since the demand for luxury products has grown quickly in the past years, it felt like nearly every global retailer set its sights on China. Nevertheless, many global enterprises misunderstood the market and ignored its particular set of challenges and inadequacies. However, the most striking issue is that consumerism is growing but so too is the wealth gap in Chinese society. It is this change that might have catastrophic consequences for the economy.

Interestingly, President Xi Jinping pins his hopes on achieving economic growth by enhanced consumer spending, but he ignores the reality of those who don’t take bullet trains to work, buy silk ties at Hermès, or go on shopping sprees around the world.

The New York Times reports that “the economic boom that made China rich never came to Chashan, a desolate village of 40 people about a six-hour drive from Beijing.” Chashan is not an isolated case. Indeed 43 million people still live on the equivalent of fewer than 95 cents a day on the mainland. Make no mistake, income inequality is growing fast and not everyone is sharing this newly discovered economic prosperity.

According to a paper by Thomas Piketty, Li Yang and Gabriel Zucman, the breakdown of income earned by the top 10 percent of the population have risen from 27% in 1978 to 41% in 2015. Quartz mentions Piketty, Yang and Zucman’s research to highlight that in terms of how economic growth gets distributed, China is a country left somewhere between France and the US.

Proportional Increase 

If we ask the question, why is consumerism increasing proportionally to economic inequality? First of all, the phenomenon is not exclusive to China. It is present even in Western industrialized nations. Giorgio Riello, a professor of history at the University of Warwick believes that “we live in a world obsessed by luxury.” Our unequal societies construct the ideal base for consumerism because affluent consumers need to showcase their success and wealth. In particular, the less refined moneyed class prefers to parade its wealth.

In the case of China — a country where social media challenges similar to the “failing stars,” — it encourages young consumers to flaunt their immense wealth through outlandish contests. These challenges illustrate that modern China celebrates both consumerism and wealth, embedding them into the DNA of the modern lifestyle.

But there’s also another element integral to this phenomenon: the growth of the middle class. The former ‘left behind’ segment of the population is finally catching up with the leading class; this creates a constant competitive drive to keep up with the elites.

Since luxury products are seen as a communicator of financial success, middle-class buyers use these prime goods to obtain an advantageous position on the domestic and global market. Luxury consumption often starts with the acquisition of an iPhone and ends with owning real estate in a good neighborhood, vacationing abroad, and having private tutors for your children or sending them to an upper-class boarding school.

Retailers who target the Chinese middle market need to have a focus on the ‘aspirational’ aspect and understand that luxury consumerism indicates upward social mobility; thus, differentiation is more important than convenience. Accordingly, minimalism might work with the global one percent, but the ‘aspirational class’ needs to consume more logoed, bling products to post reviews on apps such as TikTok and Weibo.

Lastly, China is a particular case because of Confucian culture. The six virtues highlighted by Confucianism [ xi (learning and assimilating ethics), zhi (character and knowledge), li (community, fairness and politeness), yi (morality and righteousness), wen (self- development), and ren (the highest virtue corresponding to benevolence and charity)] can be still to still mandate personal relationships and consumer behavior. Since collectivism, charity, and good reputation are concepts imprinted in the traditional cultural mindset, it’s unsurprising that individuals consider retail shopping a moral duty; consumerism is a means to reach the highest ethical principles.

On the whole, this cultural distinction is the only separator between China and the rest of the industrialized world. Our societies glue consumerism and inequality together, creating a bond where one can no longer exist without the other. In an ideal world, there would be no need for artifice. But we are not there yet.





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Can Digital Save Shanghai Fashion Week?


For a number of years, Shanghai Fashion Week had been growing its reputation. Touted by many as the newest global capital of fashion creativity, it has transitioned into a key landmark on the fashion week schedule. Eclipsing Seoul and Tokyo, the city has been nudging its way towards the mainstream, perhaps even a contender to join the big four. 

On February 10, however, this expansion was put on pause. In light of continued uncertainty around COVID-19, Lv Xiaolei, who’s better known as Madame Lu, and the Shanghai Fashion Week Organizing Committee took the unprecedented decision to postpone its biannual event — the most important fashion week in Asia. While its uncertain how long the event will be in limbo, the industry on the ground is left grappling to cope as best it can amid shop closures, factories on shut down, empty streets, and vivid memories of the SARS epidemic.   

As the outbreak continues to spread, fellow fashion week, China Fashion Week, based in Beijing, has also been put on hold. Luxury brand Chanel has also canceled its show earmarked to take place in Beijing this May but Burberry has yet to comment on it’s upcoming event in April. A spokesperson for the World Health Organization, Tarik Jašarević in Media Relations, is adamant that national authorities make decisions about these types of issues “based on their assessed risk of holding the event in their country.” Similarly, he continues, “companies and other organizations are at liberty to make their own decisions according to their specific circumstances and their assessment of the risk to business.” 

As a platform which caters to hundreds of designers and brands, both in tradeshows and on runways, as well as thousands of guests, the enormous impact of the decision is not to be underestimated. Milan Fashion Week was more recently impacted as the domino effect spreads across Asia, and now Europe, with events far into the future are being abandoned. With no end point in sight, it’s impossible to know if these cancellations lie at the supply or demand end of the issue — would guests actually attend if they could go ahead? Meanwhile, critics globally are calling for an overhaul of the entire fashion week system as a whole. Under these challenging circumstances, is there a possibility for Shanghai Fashion Week to find a dynamic new solution that reinvents the nature of fashion weeks?

One solution might be to go digital. In recent years, the carbon footprint — in particular of shows and fashion weeks — has been called out by the industry. The global environmental movement, Extinction Rebellion, has been particularly vocal on the topic and has been increasing it’s pressure on London Fashion Week for one, to rethink how it operates. Bel Jacobs, spokesperson for Extinction Rebellion Fashion Action, explains: “According to a recent report, the travel undertaken by buyers and brands resulted in about 241,000 of CO2 emissions a year so any attempt by any fashion week to go digital would of course be welcome.” 

As the Shanghai platform emerges in global importance, it represents the most powerful consumer base and production center in the world. “If the organizers [of Shanghai Fashion Week] were to embrace the digital format, rather than fly fashion editors in from every corner of the globe, the significance would be enormous. This is particularly true, if it was made clear from the outset that the decision was made in light of carbon emissions and the climate emergency,” Jacobs adds.  

Given the omission of many Chinese designers’ shows this season, companies such as Tomorrow, a multi-service business accelerator for brands, have been thinking of new ways to introduce more Chinese talent to Paris Fashion Week this season in a show of support. “It’s not just for business purposes but exposure is so important to these young Chinese talents right now,” says Julie Gilhart, Chief Development Officer, at the company. 

She continues, “The silver lining here is we are forced to think about new ways of communicating and doing business across long distances.” Gilhart, a regular visitor to China’s fashion capital, is optimistic about the possibilities for an upsurge in digital for the event however. “Obviously with the use of technology, we should use this time to figure out how we might create new, sustainable ways of executing fashion weeks and all the selling presentations that surround these times,” she explains.

This year, Finland’s fully sustainable interdisciplinary fashion event, Helsinki Fashion Week, is building on its Ecovillage concept by launching a Designer-in-Residency program, which aims to film and livestream designers’ processes daily. “Adding more digital aspects to the event is something that Shanghai could take into consideration given there is so much preference for digitization over there from Governmental positioning to consumer preference,” Evelyn Mora, the founder of the event, outlines. 

Aside from important sustainability credentials and wider ecological benefits, if Shanghai Fashion Week went digital, it would provide a layer of access and transparency to China’s emerging designers and creatives. This new digital aspect would likely be a tie-up with one of the two big e-commerce players on the mainland, Alibaba or JD.com. These local fashion conglomerates have steadily transformed domestic fashion on the mainland, but independent designers are truly raising the industry’s profile and reputation globally. In cases where corporations like Alibaba and JD.com have provided a platform for the smaller designers, the impact is only raised. With the added support of Shanghai Fashion Week, we can begin to see the potency for Chinese fashion to increase its reach. 

Given the vast size and variety of designers at the fashion week, if the organizing committee implemented a similar live-stream access to studios — already a hot topic in China — this would raise the bar for how digital experimentation and innovation could be introduced among other global fashion weeks and events. As the home of digital innovation, China should apply this idea to the upcoming schedule. Just as Milan and Paris Fashion Week organizations are creating strong digital connections with China as it skips the season, this is the ideal moment for China to export its own designers globally, via cyberspace. 

As we witness engineers and builders construct a hospital in days, Professor Patrick Gottelier, from the Shanghai Institute of Visual Arts, reminds us that this is a country that has developed the biggest online shopping network the world has ever seen. He is livestreaming his lectures from Sri Lanka, unable to be in China at the moment, but is incredibly upbeat. “Now, China has the opportunity to create the best, most exciting, farthest reaching, viral virtual fashion week that would leapfrog it into fashion’s pole position in one season.” As an industry, we can only await in anticipation. 





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How Did Chinese Consumers React to Raf Simons Joining Prada


What happened:

Sunday night, while much of China was dealing with repercussions from the Covid-19 virus, a breaking news item that had nothing to do with the ongoing crisis quickly dominated Chinese fashion insiders’ news feed — Raf Simons was joining Prada as a co-creator with Miuccia Prada, starting April 2, 2020.

The news immediately sparked waves of discussions in China, which were overwhelmingly positive. On WeChat, many fashionistas’ mourned, in jest, how their wallet would bleed and how much they were looking forward to Prada’s upcoming Spring/Summer 2021 womenswear show, the first collection to reveal the two legendary designer’s new vision.

Under the brand’s announcement post on Weibo, comments like “two of my favorite designers” and “ looking forward to seeing Cai wear the new designs,” were written by feverish fans of idol Cai Xunkun, the spokesperson of the brand China, some even posted a photo of their idol sporting a Raf Simons design.

Jing Take:

This is exciting news, as reflected by both fashion insiders and consumer’s reactions online. However, this doesn’t diminish the potential barrier that lays ahead for the Italian megabrand, especially in the Greater China market, which accounts for approximately 22 percent of Prada’s business.

In their first-half earnings release, Prada sales dropped two percent in Greater China, while rival groups like LVMH and Kering celebrated double-digit growth, signaling, perhaps, a lack of commercially-driven “it items” that connected with mainstream shoppers. However, this wasn’t from a lack of effort, as the brand has been bullish about this market. Besides the visible success of the relaunch of its 2005 nylon shoulder bag in China, they have also launched all kinds of localized creative campaigns.

Their most recent Chinese New Year campaign, featuring model Chun Jing’s journey home, is a thoughtful case study demonstrating western brands’ understanding of the Chinese holiday spirit. In addition, by teaming up with celebrities in China, the brand continues to act as an agency of shifting cultures. For example, it tapped Gen-Z idol, Cai Xunkun, to make a conceptual video exploring the state of “idol culture.” It also invited actor Wei Daxun to advocate an eco-nylon sustainability project. Needless to say, Rongzhai in Shanghai continues to act as a home base of Prada in China, becoming a favorite gathering spot of art lovers and sophisticated fashion admirers in China.

While investors and shareholders-alike wait for Prada to channel initiatives like these into financial gains, will the addition of Raf Simmons help close the fashion house’s perceived gap between fashion insiders and mainstream consumers? The results of Simmon’s last venture at Calvin Klein, which lasted a short two years, was less than satisfactory, due to an uneven financial performance amid the brand’s high-fashion transformation.

Nevertheless, it’s a daring move for the over one-hundred-year-old brand that’s majority-owned by the Prada family. While many luxury brands are reacting to commercial needs rather than leading the trend, we look forward to seeing how this legendary creative-duo to be an agency of change.





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What Underperforming Luxury Brands Must Do to Grow


One of the toughest tasks for luxury brand leadership teams today is how to turn a brand around that’s been lagging behind expectations. This is because time is of the essence when a brand’s numbers are weak, especially now that the Covid-19 virus is impacting consumer markets in mainland China and Hong Kong. A lot of brands have recently published revenue and profit warnings that blame their poor performances on external effects, especially like the virus, and while external effects have a short-term impact on brands, research has shown that luxury markets are more recession-proof than their non-luxury counterparts in the long-term. Therefore, brands that suffer early in a downturn usually have deeper, underlying issues. In other words, an external crisis is just a catalyst for underperformance and not the reason for it.

The first step towards more clarity when a brand underperforms is to be brutally honest and look for the real reasons why it’s behind expectations. A brand audit, which should include an artificial intelligence-powered, social-intelligence component, is the best way to start. As opposed to common social listening tools, social intelligence reveals deep, underlying connections and interactions by making sense of brand conversations on social media and putting them into a competitive context and time frame.

Most managers think this sounds fancy, unnecessary, or from a far-off future. I often get reactions like, “we’re not at a stage where we need that yet.” But brand preferences are built online through influencers or social media and online conversations. So if a brand isn’t able to understand which topics are trending, how consumers see the brand in a competitive context, and how their perceptions change over time, then the brand can’t compete. It’s that simple. Someone else will do a better job, and when they do, an underperforming brand’s downward spiral will accelerate.

For example, one of the most iconic fashion brands in the world used A.I.-powered social intelligence to understand how sustainability became more important in China, which affected sales in their most important market. The technology was not only able to show precisely how consumer preferences shifted but also what related topics were trending. This allowed the brand to improve its relevance and connect better with Millennials and Gen Zers.

An audit revealed the brand’s strengths but also significant gaps in its approach. What many brands underestimate is that those gaps usually aren’t a result of poor product performance. In fact, a lot of underperforming brands have excellent products. However, the more we move into the realm of luxury, the more competing brands will also have excellent products. Product excellence and craftsmanship are important, but other factors are much more critical, and the most important aspect is the brand’s story.

For almost every brand, we identify significant gaps in its brand storytelling. They originate from a brand’s vague positioning, which focuses too much on internal capabilities and category norms and not enough on differentiating the brand enough from its competitors. Differentiating through a product’s features may be a winning strategy when selling a commodity, but in the luxury industry, it can destroy brand value if done incorrectly. Instead, luxury brands need to define what I call a “unique performance point” combined with a clear understanding of how the brand inspires its consumers.

The combination of those two aspects — one rational and the other emotional — is the base of a strong brand story. It explains the brand’s purpose, which needs to be relevant to consumers. They must understand why they should buy the brand and how it creates extreme value — especially larger and more traditional luxury brands that have a deficit of brand storytelling.

Many brands are still built on a branding logic that was relevant maybe ten, twenty, or even thirty years ago when there was less competition, transparency, access, and choice. Brands could get away with simply having a famous name while building up their awareness and distribution channels. But today is a completely different time, and the “good old times” will never come back. I like to say that “the only easy day was yesterday.” Competition in all categories will continue to increase dramatically, market entry barriers will keep lowering, digital disruption will further accelerate, and consumers will become savvier and more demanding. If a brand does not have a relevant purpose and isn’t authentic, Millennials and Gen Zers will turn away.

This is why a regular audit is critical, and identified gaps need to get fixed with fast and precise countermeasures. If a brand story is weak, it must be addressed immediately before competitors take advantage or consumers opt out of a category entirely. The speed of change can be dramatic. One fashion brand I spoke with had lost 30 percent of its young consumers over the past calendar year. The CEO couldn’t believe how fast change hit him. Without drastic measures, the brand wouldn’t be able to turn things around.

To turn a brand around, managers need to think beyond products and advertising, especially the latter, which might even accelerate a brand’s decline if its story isn’t relevant. Millions of dollars are often wasted accelerating a brand’s downfall rather than helping the brand to achieve its goals. Another critical point that brands often ignore is mapping the whole customer experience across every sales touchpoint. Only when the experience at each touchpoint is strengthening the brand story can a brand be competitive. Even one “red flag” is enough to tank a brand’s entire perception.

Brand storytelling is a holistic task. It starts with understanding what your brand really stands for and then rigorously applying that story along the brand’s entire customer journey — without exception. It sounds simple, but it’s the biggest deficit of underperforming brands. Without addressing this core issue, brands are just “putting lipstick on a pig” by taking other measures. And when consumers notice the main issue isn’t being addressed, they surely won’t consider the brand to be authentic or relevant — and they will tell others after moving on.

Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the professor of luxury strategy and extreme value creation at Pepperdine University in Malibu, California. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a global keynote speaker, and holds luxury masterclasses in Europe, the USA, and Asia. Follow @drlanger





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Celebrity’s Fan Group Join the Defeat Against the Virus


“We acted fast by leveraging different groups on Weibo and WeChat. We saw that over 10,000 people donated 600,000 yuan within an hour,” recalls the leader of idol Cai Xukun’s fan group to the Chinese newspaper, Nanfang People.

Prior to the outbreak of the Covid-19 virus, fan groups have played a unique role in the billion-dollar celebrity and entertainment business in China. They demonstrate their love by defending the idol online, they upvote to raise billboard rankings, and most commonly, buy products the idol endorses. Now, amid the ongoing crisis, many have put their skills into building successful donations like Cai’s fans have done.

Photo: Celebrity ranking on We Charity.

But don’t underestimate their power. On We Charity, a WeChat donation service, one-third of the donations came from third-party organizations; however, more than half of that actually came from fan groups donating in the name of their idols. Between January 20 to February 6, 32 fan groups have generated nearly $1.2 million (8,861,000 RMB). And this number is growing daily.

The outbreak of the Covid-19 virus has become a devastating reality to many, sending different companies into full-on emergency mode, from small businesses, luxury groups, and even non-profit organizations. It was only a couple of weeks ago since the public found out about the mishandling of donations by the Red Cross, which was hoarding medical supplies instead of delivering them to hospitals in urgent need. The public was left disappointed and distraught.

How fan groups have handled the crisis has been in stark contrast to supposedly reputable organizations. Based on several interviews with Chinese media, they’ve stated that fan groups have moved like an organized army, operating with efficiency and competence. Since the news of the outbreak at the end of January, they’ve quickly dispersed into different divisions that are in charge of sourcing, purchasing, negotiating, and shipping to ensure timely and meaningful help.

“People are united (in a fan group) because they share the same common interest. Fans trust each other and this helps to run a close-knit community,” explained one fan to the Nanfang People. In other words, the highly-efficient donating fan groups are the result of practicing teamwork over a long period of time, out of the passion for their idol.

R3 January celebrity ranking.

Gradually, charity events have turned into heated competitions over whose idol offered more to defeat the virus. With this in mind, the number one celebrity on the R3’s January list (measured by popularity and social influence), Xiao Zhan, generated a larger fan donation amount than most, totaling $241,756 (1,700,000 RMB); Fans of Wang Yibo, number three on the R3 list, donated $170,653 (1,200,000 RMB) to purchase medical equipment like mask, alcohol pads, and protective goggles; fans of the actor, Lixian, number 12 on the list, also donated a large amount of medical equipment.

Meanwhile, hashtag “fangirl donation” has garnered most than 200 million page views, though citizens have started to question various fan groups’ motivates. “People think fan group donations is a pseudo proposition, that we would go as far as donating for the idols, but this is rather narrowed-minded. More importantly, we support the cause (of defeating the virus),” a fangirl named Guozi defended to the Chinese media brand, Sina Finance, in an article titled “Is donation the latest KPI for fan groups?”.

Elsewhere, luxury groups and fashion retailers clearly saw the opportunity of amplifying their message by leveraging star power. Multiple brands under the LVMH group, namely Louis Vuitton and Fenty Beauty, invited celebrities to join the cause. In a Valentine’s Day WeChat post, the inclusive beauty brand Fenty invited three brand ambassadors and spokespersons to send fans heart-warming voice messages. And starting February 19, Louis Vuitton released one celebrity video a day — the first one was kicked off by the brand ambassador Kris Wu advocating for community strength, with comments like “Fighting Wuhan with brand ambassador Kris Wu!” dominated the screen.

In a time of crisis like this, the defeat against the virus calls for community and unity. While timely donations from fan groups are just one aspect of what a power cause can do, brands with equally strong values shouldn’t miss the opportunity to join the movement.





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Procter & Gamble’s Global Supply Chain Affected by Halted Factory Work in China & More Headline From China


In “Headlines from China,” we share the biggest news stories about the luxury industry in China that have yet to make it into the English language. In this week’s edition, we discuss:

  • Procter & Gamble’s Global Supply Chain Affected by Halted Factory Work in China
  • Taobao’s Monthly Active Users Reached 800 Million While Livestreaming Viewers Doubled in Q3
  • Most of China Returns To Work As Wuhan’s Home Province Announces Delay Until March

Procter & Gamble’s Global Supply Chain Affected by Halted Factory Work in ChinaHong Kong Economic Journal

Procter & Gamble, which owns beauty brands SK-II and Olay, said this Thursday that sales in China took a hit due to Covid-19. Although the company is still running its Chinese e-commerce operation, restricted logistics capability and limited manpower are causing friction. In addition, the group’s Chinese suppliers haven’t all returned to work, which affected their production. “We access 387 suppliers in China that ship to us globally more than 9,000 different materials, impacting approximately 17,600 different finished product items,” Jon Moeller, the group’s CFO and COO, said at an industry conference.

Taobao Live

In the last quarter ending December 31, the number of MAU on Taobao’s livestreaming platform doubled compared to a year ago. Photo: Alibaba

Taobao’s Monthly Active Users Reached 800 Million While Livestreaming Viewers Doubled in Q3 Caijing

Alibaba’s recent quarterly financial results may have shown how e-commerce could bounce back after the Covid-19 crisis quiets down. For the quarter ending on December 31, its e-commerce site Taobao’s Monthly Active Users (MAU) reached 800 million for the first time, while the number of MAU on Taobao’s livestreaming platform, Taobao Live doubled compared to a year ago.

The power of Taobao Live is not to be underestimated, whether before or after the coronavirus outbreak. Previous statistics show that in 2019 Singles’ Day, Taobao Live drove almost 20 billion yuan ($2.85 billion) of sales. And as the nation began facing the battle toward Covid-19, Taobao swiftly announced that any brick-and-mortar vendor could start a livestreaming channel for free, as part of an initiative to help small to medium business owners get back on their feet.

china-return-work

Hubei Province has issued another delay on the return-to-work date, which is now set for March 10. Photo: Shutterstock

Most of China Returns To Work As Wuhan’s Home Province Announces Delay Until MarchShanghai Securities News

It’s been a very long Lunar New Year holiday for China, especially for factory workers who can’t work remotely and need to wait on local government regulations. Shanghai Securities News found that provinces such as Jiangsu, Zhejiang, and Guangdong — home to a vast number of textile and clothing factories — have the highest return-to-work rate at 60 to 70 percent as of this Tuesday compared to other provinces at 40 percent. Meanwhile, Hubei, the home province of the Covid-19’s epicenter, Wuhan, has issued another delay on the return-to-work date, which is now set for March 10.





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Bvlgari CEO Jean-Christophe Babin on Their Unique Chinese Clientele and Battling the Coronavirus


Easily one of the most well-known luxury brand names in the world, Bvlgari has established a strong presence in mainland China by researching and catering to the individual tastes of the market. Owned by luxury conglomerate LVMH, Bvlgari CEO Jean-Christophe Babin says that he recognizes how China has been the fastest developing luxury market in the world, responsible for as much as 80 percent of the world’s luxury goods consumption.

With a much younger luxury-goods clientele than most countries, China is by far the main driving power when it comes to product development and marketing. According to Babin, the biggest challenge for luxury brands vying for the Chinese audience is finding the perfect blend of product and target marketing that appeals to younger, wealthy customers. “Chinese clients are buying the iconic collections such as B.zero1 and Serpenti, like the rest of the world, but there are some specificities in that market that we cater to, so you will find certain materials and Bvlgari products there that you won’t find in the rest of the world.”

Among those nuances, says Babin, is a request for particular stones that the Chinese market prefers over others. Jade, for instance, has a long history and tradition in the country, as does malachite and ruby. As such, the brand creates special-edition pieces of jewelry and watches that utilize these materials. The assortment is similar to the global demand, but with a focus on specialty stones and gold. This year, for instance, Bvlgari created a Year of the Rat Special Edition Fiorever Lunar New Year necklace bedecked in rubies instead of diamonds because of the emotional appeal the rich, red stone holds for Chinese clientele. It also offers a Serpenti pendant and bracelet created with jade insets as well as several watches (Octo and Serpenti) with malachite accents.

Bvlgari’s Plans for 2020

Today, 25 years after entering the Chinese market, Bvlgari has more than 30 boutiques in 22 cities (including a store in Hong Kong’s Peninsula Hotel) and is planning to expand. The goal is to open three more stores in three new cities in 2020, and, additionally, the luxury brand is putting a strong emphasis on the e-commerce field this year to help attract today’s younger clientele. “Our goal is to double the traffic on our Bvlgari platform and WeChat, so we can reach the people in outlying cities where we have no brick-and-mortar stores,” says Babin. He also notes that while the brand is “intensifying investment into e-commerce, it will, of course, continue to support the luxury boutique experience.”

Additional efforts will be made this year to introduce the new B.zero1 Rock line to a younger clientele via new brand ambassadors (all under the age of 30) and a new Bvlgari brand campaign. At last week’s New York launch party for the B.zero1, a more unisex, geometric B.zero1 jewelry collection was unveiled to attract not only the millennial customer but also the Gen Zer. Supermodels and celebrities naturally stole the limelight at the event, among them model Lily Aldridge, actress Naomi Scott, and American actress Zendaya. Also, a celebrity that’s part of Bvlgari’s new “Mai Troppo” 2020 campaign for celebrating life and happiness, Chinese-Canadian singer and actor Kris Wu, was present.

Bulgari and the coronavirus challenge

Babin admits, like others, that the unfortunate pandemic in China will affect the market in some ways, but he’s confident it will bounce back. “We feel so terrible for our clients and customers there and hope the pandemic will be eradicated soon,” says Babin. To that end, the brand has implemented a host of measures aimed at aiding and supporting the victims. On February 6, the brand announced that it had made a major donation to the Lazzaro Spallanzani Hospital in Rome, which is where a team that isolated the virus in less than 48 hours is working to find a cure and develop a vaccine for it.

“The team of researchers can now work with the most technologically advanced tools, accelerating the achievement of results that will benefit everyone on the planet who are potential victims of the virus, starting in China,” says Babin, who further noted that as of January 27, the brand will donate approximately $2.3 million to the Chinese Red Cross Foundation to help with medical supply shortages in the city of Wuhan.





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The Impact of Travel Restrictions on Global Economies


Countries have implemented travel restrictions, and airlines worldwide have suspended flights between China and various destinations around the world to help combat the Covid-19 virus. And while the success rate of these attempts is debatable, the negative economic outcomes are clear.

In the recent past, countries such as the US, Australia, the UK, Japan, Cambodia, and Vietnam have profited from Chinese citizens’ hunger for tourism. Some of these economies now depend on the influx of Chinese visitors they receive, and a significant part of their GDP comes from Chinese tourism. Some communities, such as the coastal province of Khanh Hoa, have even been revitalized as a tourism-based economy focusing extensively on Chinese travels.

Vietnam, for instance, has seven provinces bordering China and because of favorable Sino-Vietnamese relations, the country was a top-destination for mainland travelers. Just to put things into perspective, around 1.71 million Chinese tourists visited Vietnam in the first four months of 2019. Thailand has also profited from Chinese tourism. In 2018, around 10.5 million Chinese travelers visited the country, and their spending brought in around 11 percent of Thailand’s GDP. But ASEAN countries (the Association of Southeast Asian Nations) aren’t the only ones benefiting from massive Chinese tourism.

Just to put things into perspective: In 2000, only 10.5 million Chinese traveled abroad, but in 2017, there were 145 million cross-border trips taken by Chinese tourists. Nowadays, Chinese visitors represent 10 percent of all international tourists — and they are big spenders. The spending habits of mainland tourists has stimulated GDP growth and job creation around the world, reviving local communities in Italy, Spain, the US, and the UK. As an example, roughly 10 percent of tourist spending in Florence, Italy, comes solely from Chinese travelers.

Spain has also seen a surge in tourism from mainland China, and the average per capita spending from Chinese tourists there in 2017 was $1,067. Chinese visitors were, in fact, the biggest spenders in the entire Iberian peninsula, and according to the U.S. Travel Association and ABC News, around 3 million Chinese visitors traveled to the US in 2018, spending an estimated average of $6,700 per person for each trip. This figure outpaces international tourists’ average spending by more than 50 percent.

In view of these figures, it’s surprising that various countries have chosen to enforce Draconian travel restrictions. The impact of these policies will wreak havoc in even the most established economies. Al Jazeera quotes Oxford Economics who estimates that the travel ban may cost the US $10.3 billion. Meanwhile, CNBC uses data from the same organization to forecast a loss of 1.6 million visitors from mainland China and 4 million hotel room nights over 2020. Both news agencies agree that New York and California will bear the biggest burden since Chinese travelers favor these states.

The EU will also meet challenges because of the activation of its Civil Protection Mechanism and the suspension of visa issuance for Chinese nationals. Given the vulnerability that some EU member states are experiencing, it’s doubtful that the Union will recover swiftly after the end of the crisis. “Obviously, countries like Greece and France would be hit most,” says Carsten Brzeski, chief economist at ING, to CNBC in an email. “This drop in tourism could add to a weakening of domestic demand, adding to existing problems stemming from the manufacturing sector, and in turn, delaying the timing of a rebound of the entire Eurozone economy to the second half of the year.”

Within this frame, Santorini — an island in the southern Aegean Sea — is already experiencing a “cancellation domino” effect, and Euronews reports that “of the 3,000 Chinese expected at this time, not even 1,000 have arrived on the island.” While this number might not be as impressive as the millions traveling to the US, the impact is severe in Santorini. According to Euronews, airlines have reduced their routes to the island, raising other issues for islanders and domestic travelers. Furthermore, local agents assess a loss of around 10 percent in yearly revenue. “Cancellations have reached 60-70 percent in February and March,” says Antonis Iliopoulos, president of Santorini Hoteliers to Euronews. “We fear we will reach 100 percent cancellations for April, as consulates have stopped issuing travel visas.”

Countries and local communities are not the only ones suffering because of travel restrictions, though. International companies are also bleeding revenues while stakeholders wonder if governments are implementing the right strategy to contain the outbreak. Cathay Pacific Airways has asked its 27,000 employees to take three weeks of unpaid leave after announcing a 90-percent cut in flights to the mainland. And other major airlines and cruise lines are struggling as well. The Economist reports that shares in Air China, China Eastern Airlines, and China Southern Airlines have fallen by more than 20 percent since the first person died from the coronavirus.

Jeremy Mak, an independent tour guide in Malaysia, rings the alarm over his profession in a recent interview with Al Jazeera. “Chinese speaking guides are having a wipeout in terms of work — at least until April, if not longer,” says Mak. Since the outbreak of the coronavirus, over 80 countries have introduced an entry restriction. Taking the severity of the control measures into account, one has to wonder about the relative effectiveness of such policies.

It would be tragic to acknowledge that instead of safeguarding the wellbeing of the population, government overreach chose to hammer economic development, victimize small businesses, and penalize major corporations. And let’s not forget that the World Health Organization (WHO) has advised against implementing travel bans. Perhaps governments will finally listen to Tedros Adhanom Ghebreyesus, the Director of the WHO, and “implement decisions that are evidence-based and consistent.





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Will the New Feature Disrupt Short-Video Incumbents?


This post originally appeared on Parklu, our content partner. 

Some people may have noticed a new feature in their WeChat “Discover” tab called “Channels”. With WeChat Channels, users can explore media accounts, videos from stars and bloggers, all from users that are not in their contacts.

If you were as curious as I was after finding the feature, you might also have spent too much time trying to figure out how to post a video. So why can some accounts post to Channels while others can not?

What is WeChat Channels?

At the beginning of the year, WeChat founder Allen Zhang (Zhang Xiaolong) reviewed the way WeChat official accounts had developed over the years. Zhang said his one big regret was how Public Account’s ended up being dominated by long-form content like articles.

Zhang Xiaolong believes: “We can’t expect everyone to write articles every day. In terms of official accounts, we lack a vehicle for everyone to create.”

WeChat Channels gives users a feature to create sub-one-minute videos or photos with a short blurb and distribute to the public. Channels will open WeChat up to become a completely open platform to discover and follow other users. Users will be able to discover, like, comment, and follow other users Channels.

At present, videos can only be played in-feed – you can’t click through to view the video on a dedicated page. The platform also does not yet support pause or scrub functions. However, you can share the content you see in WeChat Channels with friends via your Moments and chat.

So why do some people see this feature, while others don’t? Well, the feature is still in beta testing. Users in some regions will see the WeChat Channels feature listed under “Discover” after updating to WeChat 7.0.10 for iOS or Android. If you can’t access the feature yet, you’ll have to sit tight and wait for the next phase of rollouts.

How can I create a WeChat Channel?

Because Channels on WeChat are currently undergoing internal testing, publishing privileges have only been extended to KOLs. But if you are really keen on creating a Channel, you can apply to participate in beta testing by emailing channels@tencent.com. The email subject line should read “Channels internal test + name or subject name” (视频号内测+姓名或主体名). In the email, provide information to identify yourself (such as your WeChat account, along with a personal introduction or an introduction to your institution) as well as proof of your influence. You can submit original videos and screenshots for each of your social accounts displaying your account name, follower count, and interaction counts, or any other materials that demonstrate your influence. WeChat will confirm whether or not applicants have been approved for internal testing privileges based on an evaluation of the applicant’s creative ability.

At present, both individuals and businesses can apply. However, interested users should note that only one Channel can be activated for each WeChat account. Additionally, it’s not possible to change a Channel once it has been tethered to a WeChat account.

After the application is approved, you can create a channel by going to “My Channel” on the “Channels” personal page.

What’s the point of Channels on WeChat?

According to third-party research, the short video industry valuation was RMB 46.71 billion in 2018, with a growth rate of 744.7%. It is expected that the short video industry reached RMB 100.65 billion in 2019 and will grow to RMB 200 billion by 2021. Short video is undoubtedly a shiny new toy capturing the public’s imagination.

As mentioned above, Zhang Xiaolong believes that WeChat lacks a creative vehicle that everyone can participate in, and that WeChat, which is currently centered on text-based posts, must make up for its current blind spot.

When it comes to video, the first names that come to mind are Douyin and Kuaishou. Compared to other video platforms, WeChat’s core advantage must be its prowess in the realm of “messaging.” As the largest messaging app in China, WeChat’s reached 1.15 billion monthly active users in 2019. Therefore, it’s possible Channels could achieve high initial traffic. But user retention will be the real question.

At present, WeChat is trying to deliver content to users through a variety of methods such as users voluntarily following accounts, users selecting categories they are interested in, and automatic recommendations.

The truth is WeChat has been experimenting with short videos in recent years. In December 2018, Moments video was launched with WeChat version 7.0. When users open their Moments feed, they will receive their friends’ latest updates and can click to play their friends’ Moments videos. When chatting with a friend, users can also click on the circle next to the other person’s name to see Moments videos. In June 2019, WeChat and Weishi launched the 30-second Moments function. In August, WeChat teamed up with Kuaishou to launch Kanyikan. And in August, WeChat started internally testing a video creation function for public accounts. Throughout this process, WeChat has been trying and encouraging users to create short videos and to better present short video content.

This time the WeChat Channels feature seems more radical. Being able to access video content directly inside the “Discover” section, right below Moments, attracts more attention and gives the impression of having a short video app embedded in WeChat. Of course, it remains to be seen whether WeChat can successfully combat short video platforms such as Douyin and Kuaishou.

Although it is called “Channels,” the presentation of content is not limited to video. The aim is focused more on short-form content in general, including short news, short articles, and other easy to consume content formats. In this sense, it’s quite different from other dedicated short video platforms. Regardless, this is obviously a new opportunity for creators.





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