Why Brands Should Think Differently on Singles’ Day

Alibaba’s Singles’ Day, or 11.11, has never been so split. On one side, there’s the consumers’ insatiable  appetite for sought-after products with heavy discounts. For example, within 25 minutes, 410 thousand bottles of Estée Lauder’s Advanced Night Repair eye cream were sold during Tmall’s Singles’ Day presale on October 21, breaking last year’s 11.11 entire day sales record for the brand.

On the other side is Alibaba’s fear of Singles’ Day losing its allure. Despite being the first of its kind in China, Singles’ Day has become just one of many other discount holidays like 618, the promotional festival invented by Alibaba’s top competitor, JD.com. To add luster to the event, Alibaba has presented a countdown gala for Singles’ Day since 2015, inviting domestics and international superstars to perform. Taylor Swift was featured this year.

Even so, last year’s Singles’ Day reflected the slowest growth rate in the past eleven years. Yet, while first-tier cities represent the majority of Singles’ Day’s top 10 cities by sales, tier-three and below cities represent over 55% of all consumers for Singles’ Day. While top-tier Chinese cities already have access to information about luxury brands and their products, luxury brands should start to prioritize Singles’ Day as a crucial marketing event to reach China’s vastly underserved consumers in lower-tier cities. Here, two insights for future Singles’ Day strategies on how to better attract and engage with this ever-increasing market segment during Singles’ Day.

Live-Streaming Gains More Loyal Viewers from Lower Tier Cities, but It Also Comes With Risk

The growing influence live-streaming creates in driving sales and social engagement with consumers in China provides a new channel for brands to present themselves and sell products, especially to the lower-tier city consumers. According to Zhong Wen, from Taobao’s Content Ecommerce Division, lower-tier city consumers spend far more time on watching live-streaming than higher-tier city consumers and are much more loyal to this channel. But perhaps the biggest gain from live-streaming during Singles’ Day is not simply record sales figures, but the effectiveness to reach the “unreachable” consumers given the volume of this event.

As there are multiple live-streaming players in China today, brands should look beyond Taobao and TikTok live- streaming during Singles’ Day, as the two are most popular formats among higher-tier cities. Instead, turning their sights to lesser known Kuaishou, whose users are mainly from lower-tier cities and could perhaps see a bigger gain and better reach for lower-tier cities consumers. Additionally, as Kuaishou has recently partnered with Pinduoduo, and linked its live-streaming service directly with the e-commerce platform‘s backend system, the two’s synergy in user profiles can further drive sales.

Nevertheless, regardless of platforms, brands should be careful about how they present themselves beyond providing discounts when partnering with live-streamers, as live-streaming is often the first entry point to a brand’s journey with many of the lower-tier residents. Also, selecting the right livestreamer with the right credibility and reach in a specialized area among consumers is critical.

For example, when Taobao’s top live-streamer, Jiaqi Li (李佳琦), best known for his ability to drive lipstick sales, extended his partnership outside of the beauty category, problems occurred. In a recent live-streaming session to promote a non-sticking pan, Jiaqi Li failed to fully understand how to use the product correctly before live streaming and suffered for his mistake. Even though the pan was later proved to be legitimate, his failure to try out the product before livestreaming hurt his credibility in promoting different categories outside of beauty. In a make-or-break time like Singles’ Day, such a mistake could be irreversible for the brand. Nevertheless, the top live-streamer’s ability to drive sales is still highly attractive. Last year, Li’s sales record for 11.11 was estimated to be around 300 million RMB ($43 million). This year, according to Alibaba’s SVP Tianhua Zhong, Li is estimated to reach 1 billion RMB ($143 million) in sales during Double 11.

Think About New Channels to Reach This Market Segment

While many people believe that the majority of Chinese consumers tend to be incentivized by games and entertainment-related content when they’re shopping online, this is not true when it comes to Singles’ Day, where price is the biggest incentive — especially for lower-tier city consumers that are more sensitive to price online.

Also, complicated promotional rules will only lead to consumers’ discontent. For example, netizen liujing_777 from Bijie, a Chinese fifth-tier city, recently complaint on Lancôme’s Weibo Official Account about a Singles’ Day promotion on how she paid an “intelligence tax”(智商税) to the brand by buying an additional bottle of the Lancôme Tonique Confort because of her misunderstanding of the complicated promotion description.

Moreover, to better target this group of consumers, who represents much of the future luxury growth, brands should consider taking a chance on Singles’ Day and partner with an e-commerce platform like Pinduoduo that has over 300 million users, most of whom are from lower-tier cities. And, as Singles’ Day and Pinduoduo both emphasize discounts, it’s a perfectly timed opportunity for brands to test out the reaction of consumers on Pinduoduo without embarrassing themselves. In addition, despite a reputation for fake products, brands from Nike to Chow Tai Fook have set up their own flagship stores. After all, the immense opportunity to reach and engage lower-tier city consumers on Pinduoduo outweighs the chance that consumers will have doubts about this platform.

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Are Chinese Consumers Moving from Spending to Saving?

China is facing slowing economic growth, and the continued trade war with the U.S. has created a potentially tricky situation where consumer prices could shoot up while businesses’ profit margins decline. As challenges mount, the government has implemented stimulus measures (tax cuts, loans, etc.) to help increase spending, but Chinese citizens are instead becoming frugal, moving farther and farther away from the extravagant spending of years past. And while the luxury industry has recently become dependent on China’s younger, label-obsessed consumers, the high-end segment remains vulnerable to changes coming from Beijing.

McKinsey highlights how young Chinese consumers have become “the engine of global spending on high-end shoes, bags, fashion, jewelry, and watches,” and according to research based on UnionPay transaction data that was used in the group’s 2019 China Luxury Report, “China delivered more than half the global growth in luxury spending between 2012–18, and is expected to deliver 65 percent of the world’s additional spending heading into 2025.”

Yet this economic slowdown might bring a temporary halt to China’s super-consumer phase. Furthermore, it’s expected that the “aspirational class” will avoid “major or discretionary purchases,” and luxury consumers will trade down to curb their overspending impulses. In the end, this pullback will harm consumer confidence and sabotage vulnerable luxury brands. For doubters, they should remember how, when the economic crisis hit in April 2008, Burt Tansky, Neiman Marcus’s president at the time, famously said that “when our customer tightens their belt, it’s generally ostrich or alligator.” Sadly, that wasn’t the case.

In the end, the revival of the industry was linked to the rise of China’s new consumer class.

As stated by Vogue Business and Bain & Co., the 2008 global financial crisis “lopped 9 percent off the size of the personal luxury goods market.” Luxury brick-and-mortar stores and large chains had an especially tough time, and the crisis set off a domino effect that brought on what became known as the “retail apocalypse.” In the end, the revival of the industry was linked to the rise of China’s new consumer class. Mintel shows that by 2013, Asia-Pacific had overtaken Europe as the largest market for luxury goods. Consequently, it can be argued that China’s excessive spending on luxury goods saved the industry.

Having said that, it’s important to mention that there were heritage brands and luxury groups that thrived even during the global recession. At the height of the financial crisis, in 2009, Hermès increased sales by 8.5 percent and Louis Vuitton grew by double digits. However, both heritage houses used a unique strategy that focused on producing and preserving high-quality goods that were irreplaceable and had a timeless appeal. While most luxury retailers were using an aggressive discount pricing strategy, Hermès and Louis Vuitton increased their revenues and sales by fostering craftsmanship, design, and quality. Success stories during the recession, like these, were few and far between, however, and most brands had to overcome lasting damage.

Considering that “globalization is in retreat and so is the halo effect of China’s growth,” analysts are cautious about the future of luxury retail. Deloitte says “the consumer industry is showing cracks in the foundation,” and “it’s critical that consumer companies develop a recession plan now.”

Although some brands are still ignoring the gloomy economic outlook, the vast majority of the luxury industry today is better prepared to weather the upcoming crisis than it was a decade ago. That’s because the rise of e-commerce platforms has reduced business transaction costs, while digitally native luxury startups that leverage data and analytics are reshaping consumer interactions. Additionally, luxury conglomerates have embraced digitalization and new technologies in order to improve productivity goals and to more quickly anticipate the client’s needs. So even if China doesn’t rescue the entire retail industry this time around, luxury’s creative and innovative brands should be able to carry their weight.

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Kim Kardashian Meets Chinese Top Livestreamer Viya

“What’s the inspiration for your perfume?,” asked Viya, China’s top livestreamer, who’s holding up a lip-shaped KKW perfume bottle to the notoriously-known American personality, Kim Kardashian, sitting on the other side of the screen, in California.

“It’s modeled after my sister Kelly’s lips. She is a big fan of perfume,” Kim answered and smiled politely.

Outside of the livestream screen, Viya’s fan typed “kkw record sale” one after another, dominating the entire comment section. Nicknamed “Viya’s woman,” they behave like a virtual army, acting fast to Viya’s every command. Viya counted down: “3, 2, 1” and the rest of 1,000 perfume bottles magically sold out.

“Kim, you really need to give us more stock,” Viya joked, while one of her staff showed Kim the latest sales record. All 15,000 bottles sold out within 10 minutes of live streaming.

It was a surreal moment to have Kim Kardashian, the OG of influencers, live stream with a Chinese KOL. It was also a transactional performance — most of their conversation revolved around her perfumes, describing the scents of each of the three perfumes, while also sharing their common interest in Chinese food.

Livestreamer Viya speaking with Kim Kardashian. Photo: Tmall

Regardless of their different skin color and language, both Viya and Kim shared the same superpower — the ability to sell to millions of products through a tiny phone screen. Last year, Viya sold $49.7 million (353 million yuan) on Singles’ Day. Similarly, Kim sold $2 million dollars’ worth of her new shapewear in minutes. Needless to say, making record sales takes a massive fan base, which both have: Viya has over 9.64 million fans on Weibo, whereas Kim has almost 16 times of that — an astonishing amount of 150 million — on Instagram.

But in truth, for Kim to be able to sell such quantities within minutes in China, she needs a bit of help from local KOL like Viya. Last year, when the social media queen of the West first launched on the Chinese social commerce channel, Little Red Book, her campaign was criticized for being tone-deaf. Today, the success of the livestream is a testament to the popularity between Kim and Viya, the viewership each attracted were quite different. Kim’s side, operated under Tmall Global, had over 100,000 people tuned in, while Viya had a truly whopping 13,338,000 people. So, for this livestream, Viya did most of the selling. Plus, she is familiar with the platform and understands that her fans want something functional with a bargain. She kept reminding fans to get her discount coupon and emphasized that shipping costs and tax were already included in the price.

This live streaming session between Viya and Kim Kardashian kicked off a bigger initiative from Tmall Global (of Alibaba), called the Wall of Fame program, which invites Western name-stake brand founders, such as Rihanna, Miranda Kerr, Charlotte Tilbury to join livestreaming session with local Chinese KOLs. It appears to be a triple win strategy. While the celebs give their stamp of approval to the e-commerce giant, livestreaming jettisons their brand to record sales. Consumers can get their hands on star products fast and secure and without going through Daigou.

Livestreaming is not new in China, but it has recently become a mainstream way of shopping. Similar to QVC, viewers get to ask questions in real-time, all the while discounts and limited quantity stats get viewers’ adrenaline flowing. According to Alibaba, the number of e-commerce merchants that used livestreaming have doubled. Last year alone, Taobao’s 4,000 livestream hosts sold over $15 billion USD worth of goods, up over 400% from a year earlier.

While livestreaming can offer foreign brands sales and viewership, a quick boost of revenue, what’s the trade-off? Well, on Taobao, the products livestreamed are primarily FMCG brands. For example, before the livestream with Kim, Viya showcased a list of products, ranging from snacks to facial masks, many items that are not in the same category and pricings as the perfume. Another question is how many of those consumers will become fans of the brand? Before diving into a livestream, brands should weigh the pros and cons, especially when entering the Chinese market with a fresh identity — cultivating a brand DNA is a must before digging the livestream goldmine.

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Ahead of Singles Day, More Than 22 Chinese E-commerce Companies Called Out For Aggressive Discount

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:

  • Ahead of Singles’ Day, more than 22 e-commerce companies were called out for aggressive discounting
  • Chinese brand Bosideng launches high-end winter wear collection
  • Impacted by protests, Hong Kong retail sales fall 18.3%

Ahead of Singles’ Day, More Than 22 Chinese E-commerce Companies Were Called Out For Aggressive Discounting – cls.cn 

As Singles’ Day approaches on November 11, the Market Supervision Bureau of Shanghai met with 22 e-commerce companies to address problems with counterfeits, quality issues, and aggressive discounts. The government demanded that the e-commerce companies, including Pinduoduo, Meituan, Little Red Book, eleme, Yang Matou, and more to promote Singles’ Day based on rules and regulations. As Singles’ Day has become a war on discounts and promotions, Zhang Yong, the CEO of Alibaba (the company who invented this holiday), told analysts in a recent Q2 2020 financial report conference: “Other platforms are very aggressive on their promotions target towards vendors and consumers, spending an astonishing amount — up to 60% of revenue. We are capable to spend, but we choose not to react to competitors, and will spend only 15% of EBITA as our ongoing budget.”

Chinese Brand Bosideng Launches High-end Winter Wear Collection – Sina

The Chinese down jacket company, Bosideng, recently launched a new mountain climbing collection. The  seven winter jackets in the collection were named after the seven top mountains in the world, with pricing starting from 5,800 yuan to 11,800 yuan (roughly $830-$1,700). Many netizens joked that they can no longer afford this homegrown brand. According to data disclosed by the e-commerce company Suning, the average price of a winter jacket has been increasing. For Bosideng, the average price for autumn jacket used to range from 700-800 yuan, but now has climbed up to between 1,100 to 1,200 yuan.


Photo: Shutterstock

Impacted by protests, Hong Kong Retail sales fall 18.3% – Caixin 

According to data released by the Hong Kong government, retail sales fell for eighth consecutive month  down to $3.81 billion (HK$29.9 billion), 18.3% down from last year’s September performance. High-end jewelry and watch businesses were especially hit hard, dropping 40.5%; retail mall sales were down 25.6%; makeup and pharmacy were down 21.7%; and clothing was down 26.3%. According to Bloomberg, this is Hong Kong’s worse slump since the global financial crisis in 2008, with the unstable political tension has pushed the city into a recession.

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Alibaba’s Tmall is Becoming Luxury Fashion’s Online Gateway to China

This post originally appeared on Quartzy, our content partner.

American fashion label Michael Kors once called Alibaba “our most dangerous and damaging adversary.” The comment, made in 2016, was in response to the spread of counterfeits on Taobao, the Chinese e-commerce giant’s online marketplace.

The company struck a different tone about Alibaba earlier this year: John Idol, CEO of Michael Kors, called Alibaba’s Tmall Luxury Pavilion “the perfect venue for us to communicate Michael Kors’ brand vision.” Luxury Pavilion is a dedicated site Alibaba created for high-end brands on Tmall, its general retailing platform. Chinese shoppers are engaging more with luxury online, Idol noted when he announced in July that Michael Kors would open a digital flagship on Tmall.

The turnabout illustrates how the fashion industry, which once eyed Alibaba with suspicion, is now flocking to it in order to reach China’s luxury-hungry shoppers. Business-intelligence firm Gartner L2 noted in a recent report that 51% of 45 top global fashion brands it tracks in an index now have official flagships on Tmall. It’s a big uptick from previous years. Luxury brands that now sell on Tmall include Valentino, Versace, Isabel Marant, Coach, Bottega Veneta, Givenchy, and Burberry.

At the end of September, online fashion retailer Net-a-Porter and its men’s site , Mr. Porter, opened a shop on Tmall too. They’re offering more than 130 luxury and designer labels as part of a major deal that their owner, Swiss luxury group Richemont, signed with Alibaba last year.

The main appeal for the brands, of course, is sales. Chinese nationals are the world’s leading buyers of luxury goods, and while only about 10% of luxury sales in China currently happen online, that share is growing quickly. Tmall, which wants to own as much of that growing share as possible, offers some advantages to brands, even as many operate their own e-commerce sites too.

“One of the main factors is that it offers brands exposure to a massive audience at a time when it’s becoming increasingly challenging for brands to drive traffic to their China sites or WeChat accounts,” explains Liz Flora, editor of Asia Pacific research at Gartner L2, in an email. (WeChat is China’s highly popular messaging app.) Gartner L2 has also found that China’s top search engine, Baidu, is seeing its traffic decline, meaning it’s driving less traffic to brand sites. “Meanwhile,” Flora adds, “Weibo [a microblogging platform] and WeChat are pay-to-play; brands must invest heavily in advertising and celebrity promotions to gain visibility and engagement on these platforms.”

Luxury’s mega-brands, such as Louis Vuitton and Gucci, haven’t come around to Tmall just yet. According to Flora, they have the name recognition in China and resources to run successful e-commerce sites of their own. But for independent brands and so-called affordable-luxury labels such as Coach and Michael Kors, the reach Tmall provides is particularly beneficial.

And Alibaba says luxury shopping on the platform is on the rise. Last October, in the most recent figures it has released, it noted that total luxury sales on Tmall grew 46% in the 12 months ending in June 2018, while the number of luxury shoppers grew 36% in the same period.

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Tapestry, Inc.’s China Conundrum: Balancing Multiple Brands in a Changing Market

This week, Tapestry, Inc. — owner of Coach, Kate Spade, and Stuart Weitzman — reported quarterly earnings that exceeded market expectations but exposed weaknesses in Kate Spade due in no small part to tariffs on its China-made clothing and jewelry in the United States.

Coach, however, posted gains in China and Europe that mitigated some of the damage Tapestry saw from a struggling Kate Spade brand, with same-store sales increasing 1 percent in the quarter. Tapestry-owned footwear brand Stuart Weitzman, too, experienced a weak quarter due to “softer wholesale demand and continued operational challenges.”

In response to Kate Spade’s woes, Tapestry CEO Jide Zeitlin said he plans to review the brand and turn around its flagging same-store sales, which have fallen since Tapestry purchased the brand two years ago.

Looking at Tapestry’s recent performance, China’s central importance to the company becomes even clearer — both in terms of the impact of U.S. tariffs on brands that manufacture in China and consumer purchases both there and abroad. Coach, which entered the China market two decades ago, has shown itself to be somewhat resilient in the Greater China region this year given the ongoing U.S.-China trade war, Hong Kong protests, and a weaker yuan.

Much of this performance comes down to a good reception in China to the designs of Coach Creative Director Stuart Vevers and popularity among the country’s middle class, both in terms of domestic shopping and purchases at boutiques and outlet malls abroad.

This is where Tapestry faces a China conundrum — how best to take on the China market when its performance in that market is so lopsided. For its part, Tapestry is trying to improve its fortunes in mainland China by going digital. Next month, Coach is set to re-launch its Tmall for the third time on the ecommerce giant’s Luxury Pavilion, already home to Stuart Weitzman, ahead of a similar launch for Kate Spade due early next year.

As Noam Paransky, chief digital officer at Tapestry, recently put it, Tapestry’s online push in China is an attempt to connect with a broader audience and, presumably, collect important customer data. Said Paransky, “We are committed to offering a compelling experience for Chinese consumers wherever they choose to shop: our stores, direct brand and third-party websites or social platforms.”

What Tapestry will likely need to do in order to turn around Kate Spade’s fortunes — and, to a lesser extent, Stuart Weitzman’s — is to double down on its China efforts aimed at younger consumers, which will likely center in the digital realm. Much of this will be tied to how well Coach’s third launch on Tmall fares next month, and whether the company can build enthusiasm among more active shoppers in the 20-35 age bracket. Currently, Kate Spade is heavily invested in the North American market, which has seen weaker consumption by Chinese tourist-shoppers this year.

Now, all eyes at Tapestry are sure to be on Tmall’s Luxury Pavilion, as it indicates what Kate Spade can possibly expect when it launches there next year.

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Western Luxury Brands Showcase China Love at CIIE

Fittingly, it was a pair of high heels encrusted with 10,000 pink diamonds that stole the show. They were designed by Jimmy Choo and Reggie Hung, the chief designer at the London-based luxury brand, Gènavant. And the price? A cool $4.3 million. Hung told the Chinese media news agency, Xinhua, “As a new brand, Gènavant doesn’t have much brand awareness in China, but the CIIE granted us a lot of good brand exposure. We felt consumers’ excitement, we feel more certain about continuing venturing into the Chinese market.”

This was in 2018. Now, fast forward one year, and thanks to the exposure at the CIIE, Gènavant is negotiating with Chinese government officials from the Shanghai Huangpu district to open their very first flagship store in China, while at this year’s CIIE, they showcased a new collection of expensive jeweled shoes created in an exclusive partnership with Secoo, a local e-commerce player in China.

The government-backed trade show, CIIE (China International Import Expo), opened this past Wednesday in Shanghai and will last for five days. It’s considered the largest trade fair in China and the best place for foreign brands showcase their products and for Chinese companies to access foreign markets — both parties hoping to launch fruitful business deals agreements like Gènavant.


From left to right: LVMH secretary general Marc-Antoine Jamet, CEO of TAG Heuer, Frederic Arnault, LVMH Greater China President, Andrew Wu, CEO of Moet &Chandon, Stephane Baschiera. Photo: Rachel Zheng

This year, for the first time, high-end luxury brands have their own dedicated section. Given this, many brands jumped on this opportunity. LVMH set up a 500 square meter exhibition to showcase its 13 iconic brands, with Louis Vuitton presenting their latest flexible-screen handbag from LV and Fendi offering a special handbag inspired by the Chinese Forbidden City. Kering devoted its space to the sustainability effort, and L’Oréal brought their latest beauty-tech products (for the second time in a row), including an AI-aided consumer insight system, a one-stop skin detection app, and more.

To say CIIE is a business trade show might be underestimating its political implications. 2019 already marked a difficult year for luxury brands due to heightened political sensitivity, the celebration of China’s 70th anniversary and the Versace, among other brands, misstep over Hong Kong. CIIE is where Western brands come to express their interest and admiration to the Chinese market — a gesture to political correctness. Even Dolce&Gabbana, perhaps to try to save itself from last year’s debilitating scandal, was working the fair. Additionally, many brands under LVMH showcased their specially designed China-theme products, and the group even created a WeChat Mini Program with a map and brand introduction for visitors to navigate different brands easily.

At the opening ceremony, President Xi himself delivered the keynote speech, and even though he didn’t mention the U.S.-China trade dispute, his words “We need to ‘join hands’ with each other instead of ‘letting go’ of each other’s hands” seemed to indicate China’s attitude in today’s turbulent geopolitical order. Additionally, Xi also proposed some action plans for the future, for example, to lower tariff more aggressively and institutional transaction costs, and to promote import trade of high-quality goods and services. This should give Western luxury brands a good reason to be confident about China’s policy in boosting domestic consumption, which, in the end, is what it’s about — selling expensive things to an ever-growing Chinese economy looking for luxury products. Even a pair of outrageously priced high heels.

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Can China Become a Leader in Sustainability?

“There is no luxury without China, there is no sustainability without China,” said François Pinault, Chairman and CEO of Kering, at the K Generation Talk & Award Ceremony in Shanghai recently. He was emphasizing how important China is strategically for luxury’s future both in terms of sales and sustainability. China has been the biggest supplier of raw materials for the fashion industry for decades, and raw material accounts for 70 percent of the total fashion industry’s carbon footprint. The country is held responsible for eliminating carbon emissions in these areas. After speaking to a group of experts in the eco-fashion industry, we found that these changes are slowly taking place in all of China’s sectors through its consumers, brands, and government.

Consumers: Sustainable Lifestyle Before Sustainable Fashion

One of the biggest differences between the sustainability movement in China and the West comes down to self-interest versus altruism. In the West, sustainability is associated with the greater good, such as using recycled materials to save the forests. But in China, the idea of buying green fashion is more of a trophy choice, it has yet to become a factor in their daily shopping decisions among mainstream consumers. They are practical shoppers who are much more concerned with safe or natural “organic” materials than how carbon emissions are accelerating global warming.

For example, a Chinese mom might purchase organic food for her babies and plant-dyed, organic cotton clothes for her family as safety precautions. But does that mean she’ll go on to become an eco-fashion lifestyle devotee? Brands are certainly making them so. “Many eco-fashion brands choose to address a healthy lifestyle instead of the garment material,” says Vincent Djen, director of Cheng Kung Garments and Chief Strategy Officer of the fashion circular solution company REmakeHub. “Over the years, the rise of Muji-like brands represent the idea of eco-fashion brands for Chinese consumers.” Muji’s minimalist style, quality branding, and versatile categories — from clothing to furniture, kitchenware, and skincare — are big attractions to those who prefer to go “all-natural.” Similar homegrown brands include The Green Party and OCE, both brands advocate green and natural qualities and have struck a chord with consumers that are starting to adapt to this lifestyle.

Chinese eco lifestyle brand OCE. Photo: Sohu

Chinese eco-lifestyle brand OCE. Photo: Sohu

But then again, a sustainable lifestyle isn’t a completely foreign concept in China. Versions of it were rooted in ancient Chinese culture during its five-thousand-year history. The founder of Pinwu Design Studio, Zhang Lei, an advocator for Chinese designs, stated at Prada’s recent sustainability panel that early Chinese society was built upon a sustainable agricultural economy. In ancient China, families lived micro-recycling lifestyles in all parts of their daily lives — from acquiring water to harvesting plants and making clothing — by naturally following “no-waste” principles. This philosophy has also influenced how Chinese designers approach their sustainable designs today.

Brands: The Rise of Sustainable Chinese Labels

Many Chinese fashion brands, from emerging designers to established companies, are leading China’s environmental movement. For example, the high-end, homegrown luxury brand Icicle launched the country’s first sustainable childrenswear label, Eco Babe, in 2009. Meanwhile, Reclothing Bank, a designer brand that focuses on upcycling old clothes and fabrics, has collaborated with Nike to upcycle sports jerseys, and Hong Kong’s ffiXXed studios had won Yoox.com’s Asian sustainable fashion award with its very wearable, stylish items made with eco-material.

But the poster child for Chinese sustainable fashion brands has to be kleeklee, a “green” label, sub-brand of fashion group Zug Zug, which has over 100 stores in China and reported annual revenue of around $1.3 million (8 million RMB) per store in 2017. Established in 2010, kleeklee has built a cult-like following thanks to its organically dyed ‘let’s blue’ jeans collection. Even though the brand has been careful to grow slowly, demand is high, and their clothes can be found in the hippest shopping centers in Beijing and Shanghai.

One of kleeklee's customer inside of the store taking a selfie with her kid. Photo: kleeklee/weibo

One kleeklee customer taking a selfie with her kid inside of the store. Photo: kleeklee/weibo

What is driving this craze? “It all comes down to storytelling,” says Luke Zheng, an English teacher in his late twenties in Beijing who’s a fan of the brand. He likes that he can show off his knowledge of the materials and stories behind the price tag to his friends. Kleeklee also invites fans like Zheng to walk the runway show and attend different kinds of eco-fashion workshops. Nancy Lu, a PR professional in her thirties, said she became a kleeklee devotee after purchasing their jeans. According to her, their jeans are the most comfortable she’s worn, and now, she said she’s planning a trip to Guizhou to trace the origin of indigo dye in China, so she can experience dying her clothes first-hand.

For Chinese millennials, sustainable design isn’t only a fashion statement, it’s a deeply ingrained lifestyle — even a sought-after experience. This is why young Chinese consumers are calling for more Chinese labels to step up and lead the global sustainable fashion movement.

Government: A Top-Down Approach

Elsewhere, critics like Simon Collins, founder of WeDesign and the ex-dean of the Fashion School at Parson’s New School for Design, believes that “your average consumers don’t really care about sustainability. A corporate solution is the approach because it will force consumers to make changes.”

One of the most drastic changes implemented by China’s government this year is the new waste sorting law in Shanghai, the fashion capital of China. The regulation requires people to sort trash into four categories, and individuals who fail to do so may be fined up to $29.10 (200 yuan) while companies and institutions could face fines of up to $7132 (50,000 yuan). Even though this is not directly fashion-related, industry insiders believe that it will be a wake-up call for consumers and will challenge them to think twice before making their purchases and make sure they are easy to recycle.

While Western economies are more reliant on the private sector for environmental change, in China, this responsibility falls primarily on the government and their top-to-bottom policies. Collins echoed this sentiment and is hopeful that China can lead the global sustainability movement. “There is energy, hunger for change, and openness to create trends on the ground in China,” he said.

For example, many government-backed associations are trying to implement and systematize industry policies to make them more sustainable. One of the key players is the China National Textile and Apparel Council, which aims to achieve global implementation of safer chemical management practices. However, Shaway Yeh, a special advisor to the Copenhagen Fashion Summit and founder of YehYehYeh, a creative consulting agency focusing on sustainability, creativity, and innovation, was skeptical, wondering “how close the Chinese sustainability standard is to the global standard?”

To answer this question, large Chinese fashion corporations like Ruyi (which owns well-known brands like SMCP, Bally and Aquascutum) have joined forces on the global stage. Ruyi is among the few Chinese fashion groups to sign the recent Fashion Pact: an industry-wide environmental pledge aimed at aligning the fashion industry with the UN Sustainable Development Goals and put forward by Kering.

Erdos eco fashion collection Shan in collaboration with Supermodel Liu Wen. Photo: Shan Future Forum

Erdos eco-fashion collection Shan in collaboration with Supermodel Liu Wen. Photo: Shan Future Forum

Another brand closely working with the government to implement changes is the Chinese cashmere maker Erdos, who claims to be one of the first ‘green companies’ recognized by the government as part of the “green manufacture 2025” initiative. “This initiative asks to ‘greenify’ all production processes, including machine manufacturing, design, supply chain, and sales channels,” said Wang Zhen, the CEO of Erdos, at the recent Shun Future Forum, a sustainability conference hosted by Shaway Yeh.

Elsewhere, all companies listed on the Hong Kong stock exchange are now expected to fulfill ESG requirements (environmental, social, and governance criteria): a set of standards for company operations that socially conscious investors use to screen potential investments. This means all Chinese companies listed, such as Li-Ning, Anta, JNBY, and Bosideng are incentivized to become early adopters of eco-fashion.

As the country continues to oversee and enforce sustainable changes and consumers raise their eco-fashion consciousness, Chinese labels have complied and reacted to this demand. We have every reason to believe that China can step up to its environmental responsibilities, and if they can do it, perhaps the rest of the world will follow suit. As Kering’s Pinault recognized at the Shanghai conference: “Inside [China], we have the consumers, the producers in the middle, and the government, [all] willing to move progressively toward sustainability.”

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How Can Luxury Beauty Brands Keep up in Asia? Look for these Beauty Barometers

Historically, luxury beauty brands have based their identity on exclusivity, prestige, and impeccable service. And while they’ve prided themselves on being tastemakers and experts, this position has kept them from fully hearing their customers’ needs.

Luxury beauty today needs to engage directly with consumers to gain insights into changing behavior, define new trends, and enable advocacy. The challenge for luxury beauty will be how to embrace omnichannel outreach without compromising their brand values or expression — in other words, retaining their exclusivity and desirability.

Below, we’ve applied three “Beauty Barometers” to rapidly-evolving luxury beauty brands working in the APAC region:

E-commerce collaborations — From TMall’s Luxury Pavilion to Farfetch’s JD.com alliance, we look at high-ranking VIP brands as well as interesting newcomers.

Privilege programs – Once just for big spenders, membership programs now drive differentiation and marketing integrity. We monitor newly established programs and how they’re implemented.

New Wave Brick & Mortar – There’s a slew of new-era beauty roadshows and luxury pop-ups happening all across Asia. We benchmark the most important breakthroughs that retain brand authenticity.

These barometers bring a wealth of insights into changing consumer behavior (everything from how to best introduce new products to trends in adjusting ingredients), helping brands understand where new spheres of influence are coming from, and allowing them to keep pace with this rapidly shifting landscape.

  1. E-commerce collaborations

Farfetch’s recent merger with JD.com, which was meant to provide the “Premier Luxury Gateway to China” for luxury brands, illustrates a step-change within luxury beauty in Asia. This means Chinese customers will get 700 luxury brands with JD’s same-day delivery speeds and highly professional service, and luxury brands with a local retail presence (Saint Laurent, Balenciaga) will have access to world-class omnichannel capabilities (i.e. ‘click & collect’ and in-store returns) that connect those brands’ physical retail stores to consumers in China.

Alibaba’s Tmall Luxury Pavilion aims to bring the same brand exclusivity and tailored shopping to the world of e-commerce. In 2018, they invited iconic global beauty brands to participate, such as Burberry, Giorgio Armani, and La Mer. In 2019, it added Chanel, which was previously only sold offline and via its own online store.


Photo: Courtesy of Chanel

Importantly, this year’s Pavilion introduced the South Korean brands Sulwhasoo and the History of Whoo, which reinforced that brands from South Korea can compete with European luxury powerhouses. Sulwhasoo is shifting from the hype of K-beauty to a more natural branding by slathering its website with mentions of “Asian wisdom” and “natural harmony.” This shows that they’re still trying to appeal to its biggest Asian market: China.

Tmall said the brands on this platform would be able to access the same tools to engage consumers that many of the brands selling through Tmall have used over the past year, such as virtual reality and augmented reality. They will also have omnichannel solutions that integrate online and offline commerce at their disposal.

  1. Privilege programs

After Chanel’s online expansion, it can now offer real-time consultations from online beauty advisors and a membership program that provides members with exclusive new product samples and invites to offline events. The brand’s continuous integration of online and offline marketing builds a stronger network for members to experience first-hand offerings, which, in turn, improves brand loyalty.

As brands continue to adopt exclusivity programs to grow brand loyalty, their innovative products are strengthening the bond between members and brands while also appealing to a wider group of customers. Shiseido’s recent launch of their personalized skincare subscription service, Optune, takes personal care to the next level by combining technology with the customer’s daily regime. The paid subscription model, which is exclusive to Japan, offers a new customized daily skincare practice with a personalized formula for twice-a-day use. This illustrates how Shiseido’s innovation has built a unique program that has drawn a niche community of personal care specialists.


Photo: Courtesy of Shiseido Optune

The future of membership programs is tapping into technological advances in the beauty industry to further forge a close-knit membership program that provides best-in-class specials for members. J&J offers one such example: the J&J 3D-printed personalized face mask, due to launch in Asia in 2020 and beginning with China. The product, MaskiD, is a tool that meets the needs of customers who want products that go beyond the one-size-fits-all category. This individualized solution then creates a sophisticated community on the lookout for privileged offers.

  1. New Wave Bricks & Mortar

We’re seeing beauty luxury brands unleash their creativity in Asia by pushing their products in fresh, new ways that help drive social media exposure, thanks to popups and new takes on bricks & mortar. What we’ve seen across Asia is a movement toward making the exclusive truly available to everyday consumers.

Following the success of Clarins’ Ice Cream Bar, we’ve seen similar success with Clarins’ Garden. Customers can play an augmented mobile reality game where they ‘catch’ the plant extract ingredients that go into Clarins’ Double Serum and explore ‘washing machines’ with materials hidden within for you to touch and experience that depict the different textures of their cleansers.


Photo: Courtesy of Clarins

The Coco Game Center (by Chanel) kicked off in Tokyo and generated so much social media buzz, reservations were fully booked a week before it arrived in Shanghai. The game-themed pop-up stimulated fans to record their experiences and post them on social media, creating authentic branded content without the need for paid promotion. This helps to reach out to the younger consumers and expands the brand’s customer base while improving sales.

Kathryn Sloane is the APAC Director of Growth Director, SGK. Kathryn sits on the APAC’s leadership team, helping drive growth in APAC, through creating, building, and protecting brands across channels, markets, and sectors.

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Will Alibaba’s AR Makeup Technology Change the Chinese Beauty Market?

Earlier this June, Alibaba’s mid-year shopping festival, Tmall 618, saw record breaking sales for both domestic and foreign brands, many of whom surpassed benchmarks set by 2018 Singles’ Day. And with 2019 Singles’ Day just around the corner, the tech giant has set the bar even higher for this November’s shopping frenzy.

According to Alibaba, the platform will “offer new features and tools that enable brands to further engage with their customers through rich, interactive content and an omnichannel experience.” The new features have been dubbed, “Tmall Flagship Store 2.0.” One of the standout features includes AR-powered virtual makeup tools, with beauty brands like Tom Ford Beauty, MAC, and Giorgio Armani Beauty preparing to upgrade their stores with this new technology.

AR makeup tools is no longer a novelty in the beauty market. Earlier this summer, YouTube launched an AR filter and introduced their AR Beauty Try-On function. Beauty brands like MAC Cosmetics have collaborated with popular YouTubers to promote their products as paid sponsorships. Last year, L’Oréal fully acquired the Canadian AR Beauty Company Modiface, in the hope of applying the company’s AR and AI tools to their 34 brands, including Lancôme, Giorgio Armani, and Urban Decay.

As a rising trend, AR makeup technology is making its presence in the Chinese beauty market as well. One of China’s leading e-commerce players, JD.com, launched its self-developed AR makeup functionality in 2017. Elsewhere, the AR magic mirror developed by local AR technology corporation Paxi has been introduced to China’s biggest beauty product retail chain, the A.S. Watson Group Ltd.

The potential of AR technology in the Chinese beauty market, however, has yet to be fully realized. Led by big e-commerce players like Alibaba, Chinese e-commerce is on track to transform this technology into a “new retail era,” where online and offline merchants learn from each other and provide a brand new shopping experience for consumers.


Key features of Tmall Store 2.0. Photo: Courtesy of Alibaba Group

As a Nielsen report points out, offline shoppers will use the Internet to compare prices, while online consumers will visit the physical store to know more about products. As a part of the new retail strategy, AR makeup aims to provide an offline try-on experience with online shoppers and further stimulates their online shopping impulse, which could be important for the e-commerce platform, Tmall, and their brand flagship stores.

According to a JPMorgan study released in October, “China is now the second-largest beauty player in the world, with online sales now representing a quarter of the market, as brands have been able to reach customers outside the most developed Chinese cities.” A large base of Chinese online shoppers, however, want a “real” shopping experience that can compete with the physical store experience, and Tmall’s Flagship Store 2.0 is positioned to meet their needs.

This is not the first time Tmall has used AR technology to promote its creative retail modes. As early as February 2018, Tmall partnered with the mall operator Intime to launch a “Smart Ladies’ Room” in Hangzhou’s West Lake Intime shopping mall. They offered a pair of “magic mirrors,” an AR-powered digital screen that “lets shoppers virtually try on and purchase cosmetics.” Alibaba has also launched a magic mirror in its Maybelline Tmall pop-up store, as well as the Korean cosmetics Innisfree store before, to test the AR makeup tool market.

After more than one year of testing the market, Tmall has prepared to apply their AR makeup techniques to a wide range of online stores. Given Taobao and Tmall’s giant influence in Chinese e-commerce landscape, it is likely that Alibaba will release the untapped potential of AR technology in the Chinese beauty market. Here’s what beauty brands should focus on to grasp this lucrative opportunity.

AR makeup tool offers customers many more options than to simply try on makeup in a fun and innovative way. Without the concern of hygiene issues or the tedious process of removing layers of makeup, customers can quickly and easily try on as many different products as the wish. The AR technology can also save them the trouble of traveling to bricks-and-mortar stores and expands their room for choice. For brands, AR makeup tools saves them the cost of hiring a large team of sales assistants, because customers can enjoy the self-service try-on process. The aim is to improve a consumer’s overall shopping experience, which will hopefully further increase the transaction conversion rate, and help bring about increased profits for merchants.

Another reason why AR technology is especially important to the Chinese beauty market is the rising spending power in Chinese low-tier cities and suburbs. According to Invesco, the consumption growth in low-tier cities is catching up with first-tier cities, and low-tier urban residents are increasingly pursuing high-end products and looking for novel shopping experiences. For beauty brands that have not yet entered these low-tier cities, Tmall’s AR-powered online store can help them getting closer to this underserved and growing consumer base. Thanks to the AR makeup technology, customers who have limited or no access to these brands can now try on their products and see what works for them. Moreover, it’s also a smart strategy for Western brands to test the local market before launching a physical store.

Before devoting themselves to Tmall 2.0 stores, however, brands need to be prepared. As Jiang Fan, the president of Tmall and Taobao,  said the upgraded stores “would allow for an even more cutting-edge and seamless shopping experience,” which makes the boundary between online and offline shopping more blurred. Also, according to McKinsey’s “China Luxury Report 2019,” for online purchases young consumers — millennials and Gen-Z’s — “are demanding superior experiences through personalization and easy try-on.” Therefore, brands need to transform their traditional digital marketing modes into a more “personalized” strategy. With the help of the AR makeup tool, beauty brands may be able to provide individualized service on online stores as good as offline stores. For example, AT makeup technology can offer too many choices. But instead of leaving customers in the sea of different-color lipsticks or eye shadows, brands can offer some personal makeup recommendations as well as promote their products.

It may take some time for Chinese beauty customers to fall in love with the virtual experience of AR makeup tools, but the potential is promising, as long as Tmall and global beauty brands can provide potential customers with a “real” and convenient shopping experience this emerging technology promises.

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