Is Streetwear a Tool of Self-Expression in China?

With its early roots in Californian surf and skate culture of the 1980s, streetwear has grown to include bits of hip-hop, punk, and Japanese street fashion, and in the process morphing into a global fashion trend. And now, in China, it has not only found a new and vibrant home (in the largest consumer market in the world), but has become a deeper form of self-expression and a sublet political statement.

On May 21, the streetwear authority publication Hypebeast, in collaboration with consultancy PwC’s Strategy &, released the “Streetwear Impact Report”, a comprehensive data-driven overview of the streetwear market and consumer. Its findings on China are surprising.

When measuring why consumers like streetwear, both North American and European consumer respondents placed a greater importance on streetwear’s shared community taste and values in comparison to newer markets in Asia. Among North American and European consumer respondents, close to half (40 percent) indicated community was a key factor, compared to only 12 percent of respondents in Asia. Meanwhile, almost half (41 percent) of Chinese and Japanese respondents indicated that they see streetwear as a political statement. This is an important distinction, and one that many brands should heed.

For the global streetwear industry, China’s exploding interest in buying and trading streetwear fashion and accessories is only matched by an ever-increasing host of Chinese streetwear businesses eager to gain traction in this lucrative market. Given this, the question then becomes: how will China not only transform the streetwear industry, but more importantly, dictate where it’s heading around the world. And how Chinese customers, with a wide range of different ideologies and sociocultural settings, embrace this rebellious subculture, bringing unintended consequences to streetwear brands and retailers.

For long, streetwear was a type of underground culture in China that was only sought-after by a niche group of people. In 2017 this changed with two popular Chinese reality shows, The Rap of China and Dunk of China, which pushed it to the mainstream and fueled a growing interest in the general public. This past week, even Sneaker Con, the world’s largest sneaker trading and reselling trunk show, rolled out its 10th edition in Shanghai. The three-day event wooed over 20,000 Chinese consumers, who included not only sneakerheads, but also fashionistas fervently interested in learning more about streetwear culture.

It has also, surprisingly, become the turn-to option for affluent Chinese consumers to show their uniqueness and statement-making. Previously, luxury brands carried this function in China, but a shift in the country’s top-tier customer segment started to emerge over the past several years, partially due to the fact that many formerly coveted luxury brands have become available to the mass market, thus fading the allure somewhat.

Though not normally thought of as a luxury style in most parts of the world, streetwear in international markets like China, Korea, and Japan, have embraced it on the same level as other luxury purchases, and in doing so have reported much higher average spending then Western consumer respondents. More than half (61 percent) of respondents from North America and Europe reported an average spend of $100-$300, while 11 percent reported an average spend of $300-$500. Average spend per product spends jumps significantly when looking at data from Asian respondents. Among Korean and Chinese respondents, 20 percent reported an average spend of $300-$500. By far, Japanese respondents reported the highest average spend, with 28 percent reporting an average spend of $300-$500 per product and another 32 percent reporting an average spend of $500 or more per product.

Overall, the face of streetwear is changing fast today, thanks in great part to the entry of Chinese consumers, who are embracing streetwear as a sublet political statement, as well as a stylish and comfortable look. The whole industry will soon observe how the force of China rewrites the rules of the game.

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Why the US-China Trade War is Actually an Opportunity for Some Luxury Brands

In 2008, at the height of the global economic crisis, markets around the world were devastated and consumer confidence was shattered. Commentators and media publications around the world forecasted the end of luxury as we know it. I remember being asked: “Why do you believe in luxury? It’s ending!”

My answer was simple: Luxury markets are actually more recession-proof than non-luxury markets. First, in times of economic contraction, consumers with lower incomes are affected, but wealthy consumers feel it much less. Second, luxuries are an extension of personality, and because of this, consumers tend to hang on to luxury purchases longer than you’d expect — they won’t scale back until they absolutely have to.

Indeed, when we look back at what happened after 2008, all the pessimists were wrong. Instead of sharply declining or becoming irrelevant, the global luxury market remained flat. In contrast, non-luxury markets suffered greatly. And the parts of the luxury market that were affected bounced back faster than other markets, and since then, luxury has seen some of its most substantial growth volume periods ever.

Cut to about two years ago, when the Chinese government started to crack down on corruption, and once again many started predicting the end of luxury growth in China, since expensive watches and handbags were favorites, as illegal “gifts.” Yes, there was a short-term effect, but no significant lasting impact on the luxury industry in that market as a whole.

Now, with the slowdown of Chinese economic growth, the next wave of pessimists has come out to predict the downfall of luxury once again. Some brands used the downturn to defend weak results over recent quarters. But with brands like Louis Vuitton and Gucci showing strong sales results in China, bad financial showings seem like more of a reflection of poor branding, innovation, creativity, and consumer connection. What we actually see, however, is that during economic contractions — when consumers make more discerning choices — weak brands are usually hit hardest.

I see the current discussion about luxury fallout because of the U.S.-China trade war in a similar light. There will be short-term effects for weaker luxury brands, as well as luxury brands that stretched too far into more entry-level segments. Chinese consumers may also scale back short-term on purchasing American luxury products. However, as in previous economic crises, I do not expect any significant long-term effect on the market overall. Declines in weaker luxury brands will be balanced by gains for stronger brands.

One reason strong brands resist shocks like tariff-increases is that they’ve created significant value for consumers. Real luxury is nothing other than extreme value creation. The so-called “added luxury value” of luxury brands is driven by prestige, the perception of enhanced attractiveness, and the perception of social protection and financial means, among other factors. For the most luxurious brands, added luxury value exceeds all other value components (like function or design) by a factor of a thousand, ten thousand, or even in some cases, a millionfold.

True luxuries create so much value that even a double-digit tariff increase will only have a marginal impact on sales, if any. Consumers will always perceive the value as “worth it.” Therefore, a true luxury handbag costing $9,400 instead of $8,100 probably won’t have a significant effect on the luxury consumer’s desire to buy it. But it’s good to remember that this is different than the “accessible” luxury market, such as cheaper wallets, bracelets, belts, scarfs, or lower priced lines. Consumers in this entry segment are definitely more price sensitive, and tariffs will usually affect them.

Real luxury brands that have precise brand positioning connect closely with digital and millennial target groups, and rigorously feed their communities with relevant content won’t see a significant or lasting negative impact. On the contrary: For them, it can be an opportunity to further differentiate from the rest of the pack. In other words, for the better brands, the trade war is an opportunity. This is why, in my opinion, now is actually the best time to be in the luxury segment.


Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firmÉquité. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a regular keynote speaker, and holds management seminars in Europe, the USA, and Asia. Follow @drlanger

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Luxury Skincare Brand Strikes Gold with Spas for Beauty-Obsessed Chinese

The Chinese saying “白遮九醜” translates to “smooth, white skin can hide nine uglinesses.” It’s true: For centuries, Chinese women have been striving for light, bright, luminous skin, traditionally by eating strange delicacies like bird’s nests or fish maw. But more recently, they’ve turned to the science of Western luxury skincare and can’t seem to get enough of it.

Research from China Luxury Advisors on outbound Chinese tourists found that sales of beauty products were neck and neck with apparel for the most-purchased retail category of 2018. The number of travelers that bought beauty items abroad jumped from 66.2 percent in last year’s survey to 71.5 percent in this year’s. On top of that, 56 percent of survey respondents who expect to travel again in the near future said they plan to increase their overseas spending on luxury beauty, which would make it the undisputed top luxury category for overseas spending.

But as exposure to foreign prestige beauty products increases, how can these brands stand out? One key could be exclusive spa visits for clients back in China to help earn loyalty and create a stronger connection. Biologique Recherche, a French brand that is already popular in China thanks to its lotions, serums, and masques that target pigment, has embraced this strategy and is doing exceptionally well with it in China.

“Our Chinese customers prefer the lighter texture and therefore use more serums than creams,” says Biologique Recherche spokesperson, Adeline Pastor. “This is the opposite of our clients in Europe or America. Most importantly, our Chinese customers love using sheet masks that brighten their skin complexion. For many Chinese clients, they are concerned with keeping their skin smooth, bright, and hydrated.”

Although headquartered in Paris, Biologique Recherche operates several Ambassade de la Beauté flagship spa locations across Greater China, including two in Beijing and one each in Shanghai, Wuhan, and Hong Kong. These spas exclusively use Biologique Recherche products and employ estheticians that are highly trained in Biologique Recherche methodology. Facials cost several hundred dollars depending on how they’re customized, and regulars come for weekly maintenance facials, as opposed to European and American clients who tend to visit on a monthly basis.

“Our Chinese customers are indeed used to coming more often to our institutes than in France and Europe,” Pastor explains. “They love the exclusivity of Biologique Recherche and the innovative methodology to our personalized treatments. The frequency is more a question of culture and service than a recommendation of Biologique Recherche.”

Biologique Recherche creates products based on a clinical approach to beauty by using raw, concentrated ingredients alongside innovative and rigorous protocols and procedures. Unlike a traditional European facial that utilizes steam and manual extractions, Biologique Recherche avoids anything that will inflame the skin, instead of relying on their potent natural products to target various skincare concerns. The BR method is based on the belief that each person’s skin changes numerous times during the day and throughout the seasons, so every facial is personalized after assessing a client’s current skin profile.

Trend expert Daniel Levine of the Avant-Guide Institute concurs that Chinese women tend to be more intensive about their skincare routines than Americans or Europeans. “In China, we have seen a market increase over the past few years in spa-based pampering, which includes facial treatments, peels, serums, masks, and microdermabrasion,” he says. “Plus, Chinese women’s nighttime routines are often more individualized than those of Western women. These serious nighttime regimens take advantage of the belief that skin repairs itself more actively while you sleep.”

This sounds like a potential missed opportunity for Western beauty brands that are willing to go the extra mile into China. According to GlobalData, the skincare sector in the country has been growing at a faster pace than the West, and skincare is the largest sector in the cosmetics and toiletries industry in China, both in value and volume. Despite Biologique Recherche’s success in China, it remains to be seen whether other prestige skincare companies will follow their lead by opening standalone spas to attract the premium customer and capture a share of this growing market.

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How These 6 Luxury Brands Capture Consumers’ Hearts in 520 Holiday

In the West, May 20th is just another Monday. But in China, it’s now a special occasion for expressing love. The number 520 said aloud sounds a lot like “I love you (我爱你)” in Chinese, and it started out as secret internet slang, but the term soon went mainstream, and now it’s become an important gift-giving holiday, even more so than Mother’s Day (which falls in the same month) and Chinese Valentine’s Day (Qixi). Perhaps that’s because it’s a holiday everyone can celebrate: parents, children, friends, significant others, and more. Therefore, 520 is now marked on luxury brands’ calendar, and they spend significant marketing dollars to help promote exclusive products. Below we collected 6 of this year’s most noteworthy campaigns.

Estee Lauder: Exclusive lipsticks for fans

For 520, Estee Lauder is bringing some excitement to fans of the singer Hua Chenyu (who is also the brand’s ambassador) with three exclusive lipstick colors. Their campaign features a video of Hua that makes one feel like the product is a personal gift designed by the star himself, it had Hua inscribing the number 520 onto a lipstick tube and talking about the new reddish lipstick color titled “Mars” (which is the nickname of Hua’s fans). This isn’t the first time Estee Lauder has monetized fan culture around Hua, though. One exclusive lipstick, which was made for his fans to wear at his concert, saw massive success. And it looks like the strategy is still working. Within a day of posting the video,10,440 tubes of lipstick (each at about $117) had been booked for pre-sale on Taobao.

Fan Chengcheng in LV.

Fan Chengcheng in LV.

Louis Vuitton: Bags on a chain

Louis Vuitton is celebrating 520 with the nationwide release of their “bags on chain”(#爱上LV链条包#) digital campaign, which features different styles of their chain bags. The campaign marks the brand’s official debut on the popular shopping app Little Red Book, and to help Chinese consumers demystify the functionality of the bags, fashion influencer Mr.Bags signed on to demonstrate how much LV’s new wave bag can hold. The brand also has an exciting lineup of stars promoting the campaign, including singer Fan Chengcheng, actress Dilraba Dilmurat, and others. On Weibo, topic #爱上LV链条包# has garnered 23 million page views so far and 596,000 discussions.

Actress Yu Feihong, model Cci Xiang. Courtesy photo.

Actress Yu Feihong, model Cci Xiang. Courtesy photo.

Prada: My character customized design

Focusing on customized service, Prada celebrated 520 by decorating two bags with studs in unique shapes: The Prada Panier starting at $2,276 (RMB15,750) and Cahier, known as the notebook bag in China, at $1,930 (RMB 13,350). The brand kicked off the My character event with a cocktail party at one store in Beijing that featured actress Yu Feihong, model Cci Xiang, and many others. The collection is available in 14 boutique stores.

Bvlgari: Ice cream jewelry

This 520, the Roman jeweler Bvlgari has created unique ice cream-themed accessories, from $2,746 (RMB 19,000) rings to $3610 (RMB 25,000) bracelets. The mouth-watering ice lollipop bracelet (with a cheeky bite taken out of one corner) is anything but conventional. Consumers seem surprised by the cute design, which feels different from their usual high-end look with more historical motifs. “Am I still looking at Bvlgari?” asked one, “please save me the vanilla flavored one,” commented another under the brand’s WeChat post.

Modern Keys featuring actor Liu Haoran.

Modern Keys featuring actor Liu Haoran.

Tiffany: Love confession from celebrity

American luxury jeweler Tiffany & Co. knows what makes female fans tick: sexy male stars. The brand chose to feature their Modern Keys collection on a WeChat post that featured a “520 confession” voiceover by the actor Liu Haoran. Fans can buy jewelry from the collection via the ‘click to buy’ feature on WeChat.

Harvey Nichols 520 creative video. Courtesy photo.

Harvey Nichols 520 creative video. Courtesy photo.

Harvey Nichols: A “love actually” video

It’s refreshing to see a retailer interpret the meaning of 520 with a creative video, instead of focusing purely on the products. The video is a modern love actually story, showing casing stories about different types of love that’s worth celebrating, including romantic love, family love, friendship, and love for pets. The retailer has worked with 20 influencers to spread the message. Consumers can also expect in-store deal – from now until May 31st, customers who pay with WeChat Pay in the store can receive a 10% discount.

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Chinese Whispers: Social App Little Red Book Starts to Eliminate Micro-influencers, and More

In “Chinese Whispers,” 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:

1. Little Red Book’s new regulation killed the business of over 13,000 influencers – 36Kr

This week, China’s leading social commerce platform Little Red Book, which has acquired over 250 million registered users as of today, has rolled out a slew of new policies to regulate this fast-growing brand-influencer platform. One of the rules redefining the eligibility of its influencers immediately wiped out over 13,000 people, leading to an earthquake in China’s influencer community.

The new rule stipulates that only influencers with over 5,000 followers, and whose average post view of the past one month exceeds 10,000, are allowed to establish a business relationship with brands. Previously, influencers just needed to acquire 1,000 followers and 1,000 monthly average post view to be eligible. The development forced many influencers to terminate contracts with brands, which brought short-term impact on some luxury fashion brands that do digital marketing on the platform.

Zhai Fang, CEO and Co-Founder of Little Red Book, said in a public live-streaming session on May 16 that the new regulation aimed to discipline the behaviors of influencers, and that the company will come up with more rules to regulate the content-making process of influencers, such as criteria of ads and sponsored posts, in the near future.

Due to the sluggish business performance in the Chinese market, Italian buyer store 10 Corso Como plans to close down its store in Shanghai, in June, signaling the company's full exit from China. Photo: 10 Corso Como

Due to the sluggish business performance in the Chinese market, Italian buyer store 10 Corso Como plans to close down its store in Shanghai, in June, signaling the company’s full exit from China. Photo: 10 Corso Como

2. Italian luxury concept fashion store 10 Corso Como set to completely shut down operations in China in June – Jiemian

Due to the sluggish business performance in the Chinese market, Italian buyer store 10 Corso Como plans to close down its store in Shanghai, in June, signaling the company’s full exit from China. All products selling on 10 Corso Como’ WeChat Mini Program store are currently being marked down to up to 60 percent. In 2017, the company had already closed down its store within Beijing SKP mall.

Founded by the fashion businesswoman Carla Sozzani in 1991, in Milan, 10 Corso Como is a fashion and art boutique concept that has gained global popularity in the recent decade. In 2011, Trendy Group, a Chinese fashion and lifestyle corporation, took 10 Corso Como to China but failed to market the brand to Chinese consumers. Chinese media outlet Jiemian, citing insider sources, said the failure of 10 Corso Como was due to Trendy Group’s poor management capability: they constantly reshuffled the management team, which caused the store a lack of a consistent strategy. The decision of closing down the profit-losing Beijing SKP store in 2017 was also made to improve Trendy Group’s balance sheet ahead of the initial public offerings (IPO).

Beijing SKP was named as the strongest performer in the luxury retail sector in Asia by sales per square foot. Courtesy photo

Beijing SKP was named as the strongest performer in the luxury retail sector in Asia by sales per square foot. Courtesy photo

3. Beijing SKP became the best-performing luxury shopping mall in Asia – LadyMax

Beijing SKP was named as the strongest performer in the luxury retail sector in Asia by sales per square foot, according to a new report released by architecture firm Sybarite and data company GlobalData. Beijing SKP was also the second best performer by the same measure across the globe, following the British luxury department store Harrods.

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Enter Chinese ‘Male Beauty Era’: How to Capture Opportunities?

In a market as saturated and competitive as the Chinese beauty industry, one demographic appears to be outperforming all others; the male shopper.

Tmall, China’s largest B2C e-commerce platform recently revealed that the growth rate for men buying beauty products is higher than among women (31% year-on-year growth versus 29%). And the Chinese male beauty market continues to outperform those in other countries, with a projected growth of 15.2% over the next 5 years, compared to a global average of 11%. According to Tmall, we are entering the Chinese ‘Male Beauty Era’.

Top 5 largest men’s products markets Euromonitor (2018)

Top 5 largest men’s products market Euromonitor (2018)

A concern for male beauty in China dates back to the Han Dynasty scholar He Yan who was famed for his white skin and was famously never without a powder puff in hand. The market has changed considerably but its history speaks to a current trend in China and much of the rest of east Asia for using skin-whitening cosmetics.

Data from a Gartner L2 report about product innovation in China focusing on Tmall. Lipstick is the ‘only colour cosmetics product among the top five best-selling product categories for beauty brands’.

Data from a Gartner L2 report about product innovation in China focusing on Tmall. Lipstick is the ‘only colour cosmetics product among the top five best-selling product categories for beauty brands’.

Rapid changes in Chinese living standards fuelled by decades of breakneck economic growth have generated huge demand for aspirational lifestyle brands across all different product categories. Personal success has become equated with better personal grooming habits and more elaborate skincare routines. And demand doesn’t always come from where you’d expect it. In a report on male grooming in China from 2018, it was reported that the biggest consumers of male grooming products are new graduates and men in their 40s. As such, beauty brands should “enlarge its consumer base in the forecast period, to penetrate more age groups, with widened product presence and higher acceptance of gender-specific beauty and personal care products”.

Several foreign brands have begun to rise to the challenge of meeting these new demands. Products including Tom Ford’s concealer for men and Chanel’s Boy de Chanel cosmetics range are selling well on platforms such as Tmall. The popularity of foreign brands in this space is not surprising. In the quest for quality and efficacy, consumers are not afraid to spend a little more. The top five male beauty products by sales during Chinese shopping festival Singles Day were all at a premium price point, including La Mer, Biotherm and Lab Series.

The primary way in which many brands — especially those in the beauty industry — build awareness in China is through influencer or KOL (key opinion leader) marketing. Within the male beauty industry, a new generation of ‘young good looking men’ (known in Chinese as ‘little fresh meat’ 小鲜肉) is dominating this space and opening up exciting opportunities for brands to communicate directly with their target audiences, whether male or female. Indeed, China’s most popular lipstick blogger, Li Jiaqi, is male, regularly pulling in millions of views for his reviews of color cosmetics.

Another male beauty KOL, Luhan, known as the ‘Chinese Justin Bieber’ has become a leading brand ambassador for the likes of Lancôme and L’Oréal. The prevailing belief that brands should target a wider audience and appeal to more than one gender has driven the ‘little fresh meat’ effect for men to spend as much as women on skin and beauty. In a partnership with L’Oréal’s China labs, Tmall’s Innovation Centre (TMIC) unearthed five main male beauty consumer profiles, including the young and stylish consumer in their early 20s looking for male-specific products and urban professionals in their 30s with a specific focus on self-care. The majority (58%) of the market is made up of the ‘traditional man’ who shop for mass marketed products. These findings have made way for male consumer targeted campaigns to encourage men to discover new products, personalize their grooming regimens and embrace their place in the market.

Beyond building a brand, the barriers to entry for foreign brands looking to enter the Chinese market have never been lower. Changing e-commerce laws and growing interest in more niche products as a way to differentiate oneself are opening up opportunities for SMEs in particular.

Yet despite the size of the market, consumer demand is not yet being met. Tmall reports that 91% of brands on the platform have had requests about whether their products are suitable for men, yet only 45% of brands offer male-specific products. Even without male-specific products, brands can optimize their China presence by pushing relevant Chinese content for the male consumer, such as L’Oréal’s partnership with Tmall’s Innovation Centre to develop more male-specific products to help brands target key audiences.

Katherine Brown is the Marketing Executive at Tong Digital, a London-based social commerce agency specializing in Chinese market entry. Established in 2014, Tong Digital stand at the forefront of branding, communications and technology services in China, delivering insight-driven entry strategies into China’s online retail market for foreign brands.

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Will LVMH Launch a Chinese Fashion Brand like Rihanna’s Fenty?

The global luxury market is changing. Younger consumers are entering the market and information about brands is increasingly acquired via digital channels. China is now the largest luxury market if we aggregate all purchases by Chinese consumers inside and outside China, and the competition there is heating up as new brands continue to emerge in all categories.

One of luxury’s biggest players, the French luxury goods company LVMH, and the seventh-best-selling musician worldwide, Rihanna, just announced an unusual move that underlines the current disruption happening in luxury: the launch of a completely new and thoroughly global Maison called Fenty. The iconic singer heads the brand (Fenty is her family name), which is a prime example of just how much the face of the luxury market is changing today.

The Fenty brand will be digital first, a departure from the established strategy of the LVMH group and most other luxury brands. It reflects how young consumers all across the globe are primarily digital now, and not only for information exchange and social media but even for their luxury purchases. Fenty is also the first luxury brand by LVMH not headed in its creative direction by an actual fashion designer but by a music star and media influencer — one who has an enormous following around the world. In a sense, the brand is replacing traditional artisans with influencers and Key Opinion Leaders (KOL). It will be exciting to see if other brands adopt this model.

While the product portfolio has not yet been revealed, I expect a fusion of high-end tailoring with workout and streetwear that vaults athleisure into the luxury segment. LVMH announced that the brand’s management team would be multicultural as a way to connect with globalized consumers who get inspiration from all areas and cultures. It will also be the first luxury brand created and led by millennials.

A new digital-first luxury fashion brand that’s run by a young, female musician and influencer reflects consumers’ changing expectations for luxury. But it also brings up interesting questions about the Chinese market and how it will affect the future of luxury. China’s luxury consumers are all digital natives, the youngest in the world, the majority of them are female, and KOLs and influencers drive their brand preferences: attributes that are eerily similar to those of the Fenty brand. I believe the model LVMH is creating could be a blueprint for new luxury Maisons in the future.

A theoretical digital luxury brand from China that employs a Chinese millennial influencer to direct it and focuses on Chinese consumer tastes could be the next brand-building venture for LVMH or another luxury company. Since China is now the most significant luxury market and initiates most luxury trends today, I would not be surprised to see this China-focused approach unveiled soon.

But unlike Fenty, I would expect such a brand to be even younger (focused on Generation Z) and centered around wearables and technology with native distribution in all relevant Chinese social media networks and e-commerce platforms. To develop such a brand, fundamentals like rigorous brand positioning, a customer journey strategy, and a luxury strategy must be implemented. With the opportunity to start from scratch, I would expect this brand to use the most advanced artificial intelligence technologies to link consumer consent with digital activation and digital sales strategies. But for now, we’ll just have to wait and see who will be the first to step up to this challenge.


Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firm Équité. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a regular keynote speaker, and holds management seminars in Europe, the USA, and Asia. Follow @drlanger

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Deeper KOL Collaborations Help Brands Stand out in a Sea of Noise

Brands naturally have a fear of taking risks, so when they collaborate with influencers, the majority of them tend to stick to the same tried and true formats like having them make sponsored posts or attend offline events.

While it’s the KOL’s responsibility to create interesting content on behalf of their brand, these repetitive campaign formats can get stale for both the influencer and their followers. Given this, brands are starting to realize that they need to come up with new ways to work with bloggers that will excite the KOL and capture their audience’s attention. Oftentimes, that means letting the KOL take a greater role in the creative direction of the campaign.

Recently, there have been several excellent examples of this approach from luxury brands Stuart Weitzman, Secoo, and Swisse. Let’s take a look at them:

Stuart Weitzman & Ximen Dasao

Late last month, the luxury shoe brand Stuart Weitzman invited the popular WeChat fashion influencer Ximen Dasao (@原来是西门大嫂) and her team to be the official stylists for the brand’s three Spring fashion shows in the Chinese cities of Shenyang, Wuhan, and Ningbo. There’s no denying Stuart Weitzman took a risk inviting her to take over the creative direction of the shows, but it appears Dasao was a wise choice. She is a big fan of Stuart Weitzman and has previously featured their products in her articles on numerous occasions.

The lengthy WeChat article she wrote recounting her experience reached over 100,000 views and gave readers a behind-the-scenes glimpse at what it felt like to have this opportunity and what went into styling the looks for the three shows. Readers left dozens of positive comments and shared which outfits and shoes they liked the most. In China, many fans find KOLs to be aspirational and like to live vicariously through their favorite influencers. Seeing Dasao have this opportunity was also very exciting for her fans and something they would relish in following.

Secoo & Becky Li

From April 20th to May 4th, the Chinese luxury e-commerce platform Secoo collaborated with top fashion blogger Becky Li by holding an event called “寺库千万博主展.” For this event, Secoo created a pop-up mock home that was modeled after certain rooms (and closets!) in Li’s actual home. A curated selection of products from over 100 brands available on Secoo was integrated into the set, including luxury bags, clothes, and shoes.

Secoo customers and Li’s fans were invited to her “home” as if they were friends with Li. If they saw a product they were interested in while at the event, they could scan a QR code under the product and purchase it immediately. The event was quite successful, generating $2.9 million (20 million RMB) in sales within 15 days. By re-creating rooms from Li’s home, the atmosphere felt more intimate than a regular showroom or pop-up, and that allowed fans to feel closer to Li, as if they were actually sifting through their friend’s closet to find something to wear.

And according to an article by top fashion WeChat account LadyMax, Secoo became the first platform to create a custom Mini Program for a KOL event and promote it in WeChat Moments, which showed just how much Secoo trusted that Li would be able to produce results.

Swisse x Gogoboi

During his recent trip to China for the premiere of the wildly popular movie Avengers: Endgame, actor Chris Hemsworth did a live-streamed interview that was sponsored by the vitamin brand Swisse, for which he’s a brand ambassador. But instead of having a regular host conduct the interview, Swisse invited top fashion KOL Gogoboi to interview Hemsworth. The interview format was casual, with the two of them chatting about the entertainment industry, fashion, food, and health while they ate Chinese snacks and played games.

The interview was a welcome departure from the usual cold and distant brand ambassador campaign, and because the two of them are both quite successful and well-known figures in their own respective fields with some overlapping industry experiences, they had plenty to talk about and were able to have a real conversation. With this relaxed format, the audience was able to build an emotional connection with Hemsworth and Gogoboi — and in turn, with Swisse.

With a growing number of luxury brands appointing Chinese brand ambassadors, this KOL-turned-interviewer format is worth considering and could breathe some life into otherwise dull ambassador campaigns. Whether it’s having them style a show, design a product, or take over your social media accounts, involving KOLs in a campaign on a deeper level and giving them increased ownership of the creative process can benefit the outcome of the campaign as well as strengthen the KOL’s long-term relationship with the brand. And by giving creative control to the KOL, they will naturally be excited by the opportunity — an excitement that will organically be passed on to their followers.

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Should Brands Realize the Ads Opportunity on WeChat Mini Programs?

Tencent reported their latest first-quarter earnings today, despite exceeding estimates. Although user growth has remained relatively stable, the trend of declining revenue from the online gaming sector continues. In fact, it represents slowest revenue growth since the IPO launch in 2004. Given this, we expect to see the source of revenue coming from social ads on WeChat in the future.

2018 ads revenue of (from left to right) Alibaba, Tencent, Baidu, ByteDance, Mini Program. Photo: Aladdin report.

2018 ads revenue of (from left to right) Alibaba, Tencent, Baidu, ByteDance, Mini Programs. Photo: Aladdin report.

One of Tencent’s ad offerings that are increasingly on the radar is their Mini Programs ad, which is projected to reach about $22 billion (RMB150 billion) in 2022, according to Aladdin, a leading WeChat Mini Programs analytics tool. By drawing data from its own monitoring platform, interviews with 135 advertisers, media and third-party agencies, the Aladdin published the first report on the Mini Programs Ads in China, on May 6, attempting to give an overview of the marketplace.

According to their research, The ‘app within an app’ has served as an alternative to a stand-alone app as the cost of new user acquisition has become increasingly more expensive. Advertisers gained a lot of traffic and acquired new users at a low cost from WeChat, but there is simply not enough data to draw an accurate user profile. Below, we share some of the key takeaways from the report on this ad offering.

Different channels to acquire new users on Mini Program.

Different channels to acquire new users on Mini Programs.

50 percent of user acquisition on a Mini Programs still comes from social sharing, but as ads start to take effect, the usage increased nine percent.

Right now WeChat Mini Program Ad is still at the start of its growth 

Right now WeChat Mini Programs Ad is still at the start of its growth.

By combining CPM (cost per thousand impressions), CPC (cost per click), CPA (cost pre-authorization), meaning a user agrees to let a Mini Program collect their information (user name, location, contact, etc.), and CPS (cost of the sold merchandise), WeChat is able to measure the success rate of the user journey from seeing an ad to possibly purchasing a product, resulting in a clear map of the return on investment.

Motivated by immediate transaction value on WeChat, the biggest advertisers on Mini Programs are e-commerce (21%) and Mini Game (23%) companies.

Banner and video ads are still the two most common ad format.

What the future could be like?

  • According to the report, ad forms on WeChat will be completely dominated by Mini Programs as users demand more interactive ad formats.
  • SEO and SEM will be increasingly a strong focus to make searches easier on Mini Programs.
  • O2O will become the main focus, more online ads will lead to in-store traffic.

Want to read more about WeChat Moments ads? Check out our WeChat edition newsletter – a weekly briefing on all things WeChat, featuring the latest news, campaigns, reports, case studies & events.

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How Trade War Affects U.S. Consumer Goods Companies and Beyond

On May 14, the U.S.-China trade war entered into a full-fledged battle after the Chinese government took retaliatory measures against the latest round of tariff hikes by the Trump Administration. Beijing announced it would raise its own tariffs on the total value of $60 billion on exported goods from the United States from five percent to as high as 25 percent, starting June 1. A variety of targeted products — agriculture, metals, apparel, footwear — are on the list, according to a statement published on the official portal of the Chinese government.

The escalation between the world’s largest two economic bodies opens up a Pandora’s box of an uncertain economic outlook for all industries, in both countries, and perhaps globally. For luxury and fashion companies, whose business cycles — from manufacturing to retailing — have an increasingly significant reliance on China these days, the development is distressing, if not devastating. And aside from causing global capital markets to puke on Monday, here are at least three ways that the ongoing trade disputes can affect the profitability of the luxury and fashion sector in the mid- and long-term.

A harder sell for U.S. luxury brands

First and foremost, it’s expected that luxury brands with an American origin will feel the pain soon. Nelson Dong, a senior partner at the international law firm Dorsey & Whitney law firm and a current member of the Board of Directors of the National Committee on U.S.-China Relations, told Jing Daily that it may appear that the U.S. could apply more leverage in the battle as China has historically exported more goods to the U.S. than the reverse way, but many of China’s exports are consumer goods or basic “input” goods used by other manufacturers, which can be more easily resold into other global markets, such as the developing nations of Africa, Latin America, and Southeast Asia.

“In contrast, a large percentage of American exports to China are higher-end products that need wealthier consumers or users, whether those items are sophisticated smartphones or sophisticated commercial airliners,” said Dong. “And so it could be much more difficult for American exporters to replace China, which has 20 percent of the entire world’s population and more of its total wealth.”

Moreover, American luxury fashion brands are also likely to lose their price advantage against their European rivals in the Chinese market due to the trade war. With China’s retaliation set to commence in June, many U.S. brands face the pressure to raise retail prices — though that’s a last resort — to offset the impact on their profitability by passing it over to consumers. For example, Ralph Lauren’s Global CEO Patrice Louvet did not rule out the possibility of raising prices in an interview after the company’s first-quarter earnings on May 14. On pricing, European luxury brands are heading toward the opposite direction. Led by Louis Vuitton, Gucci, Hermès, and Prada, brands are recently aggressively lowering retail prices in mainland China in a response to the Chinese regulation.

Chinese consumer sentiment

Chinese consumers’ sentiment with the U.S. could also possibly take a deep dive soon if the disputes further deteriorate. On May 15, a 90-second statement on China’s attitude on the trade war made by Kang Hui, a famous news anchor of Xinwen Lianbo (新闻联播), a daily news program broadcasted by China Central Television (CCTV), immediately went viral on all social media platforms. Kang stated that “if you (refers to the U.S.) want to negotiate, the door is open; If you want a trade, we’ll fight you until the end.” The speech stirred up nationalistic sentiment among the general public, with masses of online users showing their support to the government for fighting the war against the U.S.

Currently, there is no concrete sign showing that the nationalist sentiment in China has translated into any real initiative of Chinese consumers to protest against any American companies. However, the experience of South Korea and Japan, who previously went into political controversies with China, should be a concern for consumer-facing brands in the U.S. For example, in 2017, a geopolitical dispute between South Korea and China over the THAAD missile launch led Chinese consumers to voluntarily boycott Korean products, which seriously swept across the Korean business community from car-making, beauty, fashion to tourism.

In an anonymous interview with Jing Daily, a marketing professional working at a high-end American fashion brand admitted that the company has serious concerns about how the business will be adversely affected by a decreasing customer interest from China as a result of the current disputes.

Currency fluctuations and growth concern

European luxury fashion companies, though not in the center of the confrontation, should be concerned as well. The escalation of U.S.-China trade tensions has already added a new wave of pressure on Chinese yuan — the exchange rate has weakened to an almost six-month low on Monday following China’s announcement of adding tariffs. A weaker Chinese yuan, in theory, can partially offset the impact of higher tariffs. Nonetheless, it also undermines people’s purchasing power: a particular piece of bad news for luxury brands that rely on outbound Chinese travelers for business growth.

Furthermore, as the trade war dents China’s growth outlook, many experts worry that it will add a new layer of uncertainty to China’s current shaky economic situation, of which no luxury brands would be immune from the fallout. So far, as shown by the first quarter earnings results by major luxury houses, the Chinese market has remained exceptionally strong. However, Dong added: “It will be some months before economists can measure and report from trade data how this dispute is playing out.” But it’s certainly not too early for luxury brands to work out the right strategies to combat a potential softening of business in China, as the trade war continues to take casualties.

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