3 Top Luxury Apps for the Chinese HNWIs


The convenience of cutting-edge technology can no longer be ignored. In modern society, very few now live without high-tech gadgets and tools, while the rest have given in to unprecedented digitalization.

In an age of accelerated digital noise, high-end consumers crave smoother processes, comfort, and silence. That’s where luxury apps come in. They provide information on quality services, premium products, the latest high-tech gadgets, and the best experiences while offering simplified processes and the comfort and quiet that HNWIs demand.

According to Statista, China is the world’s biggest social network market with 673.5 million users, although the China Internet Network Information Center (CNNIC) estimates that the country reaches over 800 million internet users. Social media and the internet are vital parts of the Chinese consumer’s life, so it shouldn’t come as a surprise that apps have become a basic extension of their existence.

The most bankable luxury apps are the ones that grant access to a world of privilege where impeccable services, unique events, and exclusive indulgences are securely acquired. As it gets harder to connect with affluent Chinese consumers, luxury brands may benefit from integrating the following apps into their digital marketing strategies:

1. Luxy

Touted as “Tinder minus the poor people,” Luxy has become a top dating app for the one percent. Before the age of digitalization, if you wanted to meet a high-earning partner, you’d go look for them at certain establishments (The Union Club in New York or Soho House in London) that were considered exclusive and high-end. But today, thanks to Luxy, you can find a potential wealthy partner from the comfort of your own couch — if you meet some strict requirements, that is.

In order to be accepted, applicants must be recommended by a member and then pass a verification and validation phase. During the initial stage, candidates certify their identity and eligibility by submitting a picture of their ID along with their annual tax return. Only the most successful and beautiful people are accepted. On a side note, it’s worth mentioning that 41 percent of members have an annual income of over $1 million.

Raffael Krause, Director of Luxy, tells Jing Daily, “Luxy is serving the dating needs of successful and wealthy singles, those who want to meet an equally successful person.” It sounds promising, especially in a market like China that boasts 1.5 million millionaires. “Over the past 30 years, China’s stunning economic growth created the second-largest upper class after the U.S.,” Krause says. Indeed, the remarkable transformation of Chinese society has presented Luxy with a new opportunity.

The services offered by the elite dating app respond perfectly to the needs of the wealthy Chinese consumer, which is why moving into the Chinese market “was a natural move,” according to Krause. “Heritage, job, and economic success are values that hold greater importance in China than the West when it comes to finding a suitable partner,” he adds. Since Luxy enjoys a select pool of highly successful associates, it’s a good match for today’s Chinese luxury market. And with the app giving access to members’ pre-vetted connections, Krause believes that “members can be sure to select from the finest singles in China.”

2. Nice (China’s very own Instagram)

China’s luxury world already got a taste of a quality photo-sharing app and saw its incredible marketing potential, but in 2014, Instagram was banned from China, leaving a void in the market for local players to fill. Yet during its brief time in the country, Chinese citizens were as mesmerized by the platform as people in the West have been.

That brings us to Nice: the most capable contender for the title of Best Photo Sharing App in China. Thanks to its features — from cute stickers and special effects to tags and filters — Nice offers the best overall photo-sharing platform to Chinese users. According to HI-COM Asia, Nice has 30 million registered users and a young, mostly female demographic. 83.42 percent of Nice users are female while men account only for 16.57 percent. Nice founders Alex Zhou and Ken Cao have optimized social engagement by creating the most millennial-friendly brand around, and because of its success and visual appeal, luxury houses would be wise to include Nice within their marketing strategies.

3. Live Auction Art

According to the App Store preview, Live Auction Art is “the fastest tool on the market for collectors and dealers to enter live salesroom auctions and find/compare lots and sales results.” The app features auctions from Christie’s, Sotheby’s, Phillips, K Auction, Bonhams, and Seoul Auction. It’s a must-have app for art collectors because of its unbeatable features such statistical snapshots of former auction results and the comparison toolbar where users can see appraisals of artworks from competing auctions houses. The app not only informs users about upcoming auctions, but it can also offer accurate quotes on similar works at rival auction houses.





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Little Red Book Tightens Influencer Policy to Spur Growth


Little Red Book, the Chinese social e-commerce giant also known as RED, recently sent a memo to content creators announcing new qualification criteria for influencers, and the message was clear: rise to Red’s new quality standards or forfeit your privilege. The newly implemented changes, perhaps the most dramatic policy shift in Red’s 6-year history, is expected to impact over 3/4 of the site’s influencers, but as with all changes, there are new opportunities for influencers and brands that know where to look.

Motivation for Changes

Red went online in 2013 as a platform where Chinese travelers could share overseas shopping tips and discover niche brands. In just six years, it’s developed into a social e-commerce giant, with a whopping 200 million monthly active users, and is often considered a “must-have” part of marketing strategies for international fashion and beauty brands intent on winning a share of the China market.

But the rapid expansion of the platform had some unintended consequences. An increased number of sponsored posts started taking over influencers’ feeds, and the imbalance between sponsored and non-sponsored content created user fatigue, which, in turn, lowered user engagement. Unethical agents creating fake product reviews in an attempt to manipulate public opinion drew widespread scrutiny. And perhaps most concerning for Red, content creators and agencies who represented them started enjoying a steady stream of revenue, yet the platform wasn’t able to share in those profits.

In January 2019, Red launched “Brand Partners Platform,” an influencer portal that helped brands discover and work directly with influencers who had been certified by the platform. The first rule: A certified Brand Partner needed to have at least 1,000 followers. Brand Partners Platform was an important first step in regulating Red’s influencer community and a way for the platform to potentially tap into revenue from influencer collaborations.

But Red raised the stakes again this May by revising the Brand Partners Platform requirements. The latest policy requires that a qualified Brand Partner must have at least 5,000 followers and maintain an average of 10,000 views-per-post over the past month, a dramatic change from their previous requirements. In addition, a Brand Partner must be represented by a multi-channel network (MCN) that’s been certified by Red. Under the new policy, only 4,000 of the 17,000 previously certified influencers would qualify as Brand Partners.

The policy update is intended to attract and retain users by pushing influencers to continuously produce new, high-quality content. Under the new policy, a Brand Partner must publish four non-commercial posts for every sponsored post and may qualify for only four sponsored posts each month.

Implications for Influencers

The policy changes caught many influencers by surprise and caused concern and confusion. Many influencers who had previously operated independently, regardless of the size of their following, are now scrambling to find an MCN as host.

Some critics argue that raising the qualification criteria for Brand Partners goes against Red’s user-generated content roots, and therefore risks disenfranchising a large group of micro-influencers who had previously made up the foundation of Red. Many of them might decide to leave Red and move to another platform. “People come to Red because the content we (micro-influencers) share is authentic,” reads a comment from a content creator who did not qualify as a result of the new policy. “We help built Red but now it has betrayed us.”

The new policy is not bad news for everyone. The diminished talent pool will reduce competition and thus allow the remaining influencers to capture more attention from advertisers. The limited sponsored post inventory allocated each month also means that brands will likely pay influencers more to compete for the coveted slots.

Many top-tier influencers welcomed the change, particularly the requirement to produce additional non-sponsored content. “I think raising the bar will bring positive changes to the influencer community; it compels us to improve the quality of our work,” says Rui Wang, a Red influencer based in New York City with 1.8 million followers. “As a result, our followers will have a better user experience on the platform.”

What Should Brands Do?

Register their brand account on Red. In May, Louis Vuitton became the first luxury brand to launch an official account on Red. For brand planning to engage Brand Partners on Red, now is the time to register an official brand account. Brands that rely heavily on e-commerce, should consider listing their products on Red Mall — Red’s e-commerce section — in addition to other e-commerce sites like Tmall and JD. Because Red doesn’t allow outside links, having a presence on Red will help close the sales loop and improve the conversion rate of influencer collaborations.

Diversify content distribution channels. Advertisers should repurpose the content created by Brand Partners on different marketing channels. This would increase ROI and could potentially offset the increase in collaboration fees that are expected as a result of the new policy.

Consider organic seeding in addition to sponsored posts. Because users on Red are generally looking for educational and relevant information, unbiased product reviews or mentions in posts that covers multiple brands might generate better results than a traditional advertorial.

Continue to engage micro-influencers. Even though some micro-influencers are disqualified to be Brand Partners under the new policy, they remain a potential source of influence on Red, and brands should seek ways to continue to engage with them. For example, brands cannot contract these micro-influencers for sponsored posts, but they can provide them with products for an opportunity to gather unbiased reviews. Building relationships now can generate brand loyalty and bring benefits in the future as these micro-influencers requalify to be Brand Partners.

Charlie Gu is the CEO of Kollective Influence, a marketing agency that specializes in cross-border influencer management and strategy. He can be reached at charlie@kollective.world.





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What China’s Retail Disruption Means for Luxury Brands


These days, retail growth in China is occurring online and on mobile. Driven by the country’s e-commerce leaders, such as Alibaba and JD.com, and social commerce platforms like Little Red Book, WeChat, and Pinduoduo, consumers are used to purchasing goods online, even some big-ticket luxury products.

The latest study by the market research firm eMarketer uncovers that despite China’s overall retail growth is set to slow down in 2019 amid geopolitical and economic uncertainties, the expansion will continue to be extremely strong online. By sourcing data from a wide range of institutions, including third-party research agencies, retailers, government, and Chinese e-commerce players, eMarketer forecast China’s retail e-commerce sales is set to grow by roughly 27 percent to reach $1.94 trillion in 2019, accounting for around 37 percent of total retail sales. And nearly 80 percent will happen on mobile. The company projected that retail m-commerce sales will increase 30 percent to $1.56 trillion.

The report also highlights two important retail trends in China that could bring disruptive transformation to the luxury fashion industry. One is the “New Retail” movement — spearheaded by tech titans Alibaba and JD.com. With the newest technologies like augmented reality and virtual reality and data analytics tools in place, these e-commerce companies claim to provide advanced retail solutions to completely alter the way that luxury, fashion, and beauty retailers serve customers. There are many A-list luxury brands embracing the trend lately. For instance, the Prada Group formed partnership with JD.com and Secoo, a specialty luxury e-tailer. Burberry has been operating on Alibaba’s Tmall marketplace for over five years now. A handful of high-end beauty brands from Estee Lauder, Lancôme, La Mer to Givenchy Beauty are benefiting from Alibaba’s retail solutions to spur sales in China, while Chanel Beauty just announced last week that it would launch an official flagship store with Tmall.

However, there are still many concerns for luxury brands, in general, to work with China’s e-commerce players. “When it comes to luxury goods e-commerce, while the traffic that major e-commerce platforms are able to generate is nice, some brands struggle with visibility and being able to create an exclusive experience for customers. More and more so, they also want to maintain their autonomy and be in control of the way they tell their brand story and craft interactions with shoppers in a way that’s unique, personal and authentic,” said Man-Chung Cheung, research analyst at eMarketer and the report’s author.

Another significant retail trend booming in China is the convergence of e-commerce and social media. For the luxury and fashion industries that traditionally places an emphasis on content marketing, it’s good news. China’s “Instagram,” Little Red Book, aka xiaohongshu, recently has attracted Louis Vuitton, while Douyin, the hip short video site among the country’s Gen-Z generation, has seen the arrival of players like Christian Dior, Moncler, and Michael Kors.

Overall, despite the availability of more and more luxury goods, online shopping will only continue to grow, which speaks about the importance for luxury brands to create an effective digital retail and marketing strategy, but majority of the purchases will still be made in brick-and-mortar in the foreseeable future, according to eMarketer’s Cheung, “So an omnichannel strategy augmented by technology is essential, especially in China.”





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Tod’s Racked up 4.7 Million RMB Through Working with This Chinese Influencer


It’s no secret that working with fashion influencers in China — when done correctly — can be a profitable venture. For example, Tod’s, the prestigious retailer of Italian-made leather shoes, handbags, and accessories, is currently reaping the benefits of one such a collaboration.

On June 26, the brand unveiled its 2019 Summer limited edition “Unicorn D Styling” bag (roughly priced at $2,175) and designed in partnership with the Chinese handbag guru, Mr. Bags (包先生), marking the third collaboration between the two parties. Since the launch, Mr. Bags’ online store and Tod’s mainland boutiques sold out — some 320 bags — garnering approximately $696,000 (4.77 million RMB). The impressive sales numbers doubled the record of Mr. Bags previous collaboration with Montblanc last summer. Below, a  breakdown of sales channels for the bag:  The synergy of Tod’s and Mr. Bags maximized the power of the blogger’s global influence. (Mr. Bags has around 5.3 million followers on Weibo and more than 950,000 fans on WeChat nowadays.) The new bag was based on Tod’s classic “D Styling” handbag that was named after Princess Diana. The style, which made a comeback last season, is available in a variety of textures and colors. Mr. Bags gave it a new color — Airy Blue (雾霾蓝) — which is one of the chicest colors among Chinese consumers right now. Plus, he added a cute unicorn pendant, which he also designed.

The collaboration, once again, designated WeChat’s Mini Program as the primary sales venue. However, compared with last year’s collaboration with Tod’s, where Mr. Bag’s exclusively pushed out products via his “Baoshop” Mini Program three days before Tod’s own Mini Program, with this release the bag was made available the same time on both platforms.

In terms of pre-promotion sales, Mr. Bags first made an announcement via a 24-second video on WeChat, on June 18. The video has been viewed 40,000 times as of this publication. The blogger then pushed a message notification on June 25 to remind his fans of the upcoming sale, with an official editorial launch the day after. In addition, Tod’s also partnered with a number of Chinese celebrities, including Ouyang Nana (欧阳娜娜), Jiang Suying (江疏影), and Li Qin (李沁) to pose with the Unicorn D Styling bags a few weeks before the sales.

The vast success of this collaboration between Tod’s and Mr. Bags again demonstrates the power of China’s social commerce, and the power that top-notch influencers have in driving brand engagement and sales. And given the lucrative results, this collaboration is almost certain to continue for some time.





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Will Rihanna’s Fenty Beauty Take Off in China?


Amassed largely by the popularity of its superstar creator, Rihanna, Fenty beauty achieved a whopping $100 million in sales just 40 days after launching. An instant overnight sensation, to be sure. But would this success translate to China, the second-largest beauty market in the world? What’s concerning is that Fenty’s two winning weapons — star power and its message of diversity — have appeared to gain little traction in China’s vast mainland beauty market.

Fenty Beauty was launched in 2017 by the singer, who is also the first woman of color to oversee a fashion house under LVMH. Largely betting on the star’s worldwide influence, Fenty is the first new LVMH brand since 1987 built by the group. But the star’s halo effect has yet to translate into a selling point in China, as it has in the West. If anything, it’s been the Chinese actress and beauty blogger Lin Yun that has created the buzz for the brand.

Actress Linyun demonstrate Fenty skinstick on Red. Photo: Little Red Book.

Actress Linyun demonstrate Fenty skinstick on Red. Photo: Little Red Book.

It’s no wonder. Lin Yun has about 10 times the Weibo following of Rihanna in China. And after introducing the brand to her fans, Lin quickly became the celebrity name associated with the brand. This is not a Rihanna-only phenomenon – Kim Kardashian’s KKW beauty line, notoriously flatlined when first launched on the Chinese social shopping platform, Little Red Book (Red). Cases like these demonstrated the power of localization in China — even with celebrity-based products — and the importance of having mainland KOLs to help translate the brand’s influence to a local Chinese audience may be still necessary.

The lack of Rihanna’s global celebrity effect, however, hasn’t stopped people from buzzing about the brand online. On Red, there are some 30,000 posts from consumers sharing Fenty product reviews, with many asking if it’s for Asian skin color. Even though diversity and inclusivity are two of the most important messages delivered by Fenty, (it does offer 40 shades of foundation to accommodate a wide range of diverse skin colors), many Chinese consumers have struggled to find right color, as the Chinese market is racially less diverse than the U.S. and European markets, and where white or lighter skin tones are considered the beauty standard. To their credit, savvy Chinese consumers have figured out that Fenty’s Skinstick in Amber was a natural match to Asian light skin tone, and has quickly become one of the most discussed items on Red.

Whether Fenty will succeed in China is far too early to say, but before any foreign makeup brands hit the shelves in China, they have to undergo animal testing, and the manufacture of Fenty Beauty, Kendo, has long made it clear that they will only produce cruelty-free products. This regulatory concern seems to be an unconcealable barrier for Fenty to officially sell in China. So far fans can only purchase through overseas shoppers like Daigou or traveling to the closest destination, such as Sephora at Hong Kong.

But this doesn’t mean the brand has no plans to expand into China. Fenty Beauty launched Weibo account on May 29, and quickly amassed 15,205 followers (about one percent of Rihanna’s personal Weibo page followers). So far, the brand also set up a blank profile on Red.





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Demographic Trends Shaping Luxury in China


In the age of digital transformation when brands rely on analytics to predict consumer behavior, it’s easy to underplay the importance of demographics. Indeed, demographics have conventionalized stereotypes (men love soccer and beer; women obsess over luxury garments) and consumers are more sophisticated than simply an age or income bracket, but that doesn’t imply that marketers should completely ignore statistical analysis. This is especially true in the luxury world, where knowing and understanding every demographic division is the starting point of the conversation. Undeniably Gen Zers and millennials have similar traits and consumer patterns, but that doesn’t imply that they are identical. Market segmentation is a double-edged sword. In the hands of lazy marketers, it can promote stereotyping and overgeneralization, while for the rest, it’s a welcomed tool.

In a highly segmented market like China, luxury brands particularly need to understand the value of every consumer category if they want to bridge the generational gap and appeal to a wider net of possible consumers. As luxury has a different meaning for new generations, adapting to the aspirations, experiences, and demands of every age division becomes an advantage. Successful heritage brands will continue to insert demographic reports in analytics, transforming them into a key component of their marketing strategy. All things considered, here are the demographic trends currently shaping luxury in China:

1. The elimination of the one-child policy

China has an aging problem, and this is a hazard to the country’s economic breakthrough. While today, we link China’s rebound to trade and economic liberalization, the importance of the labor supply can’t be neglected. However, recent studies show that China is losing its demographic advantage because of censorious population-control efforts and the draconian one-child policy introduced in 1979 by Deng Xiaoping.

Under these prohibitive family-planning rules, the authorities restricted the vast majority of families to a single child. This policy brought a sharp drop in the fertility level and total birthrate, creating a gender imbalance. Furthermore, the son preference forced many families to abort girls, creating a society where men vastly outnumber women. This again gave birth to a generation of shengnan, meaning “leftover men” or partners considered unsuitable for marriage. On the other hand, the policy expedited the gender equality movement. Female college enrollment exploded, while educated women pursued in-demand careers, leaving traditional roles behind.

The reversing of the policy is unlikely to stop either the women’s liberation movement or the country’s gender imbalance, and yet it will impact the luxury sector. Niche markets such as luxury kidswear, baby care products, maternity wear, and child-related products (e.g., toys, nursery furniture) will see strong sales. On the other hand, young families will embrace family-oriented collectivism, progressing from the self-centered and individualistic life view. Instead of luxury products that bring personal gratification (think of a Birkin bag or a Rolex Daytona), consumers will give precedence to family activities and child-related elite services such as after-school enrichment programs or upper-class sports. Basically, luxury players who offer customized family-friendly trips, educational leadership training trips for families, and after-school private tutoring will see robust growth and higher sales.

2. The world’s largest middle-class

China’s middle class is forecasted to reach 780 million in the mid-2020s and with all the hype in the media, there’s a risk of falling in the oversimplification trap. In other words, it’s wrong to see a multifaceted issue like the Chinese middle-class as a homogeneous group.

China is one of the places where marketers have registered significant differences between the urban and suburban middle class, and the upper and lower-middle classes. In addition, geography is playing an important role as the urban population from the eastern and coastal provinces is wealthier than inland city slickers. Further segmentation appears between individuals working in the private sector and the power-driven bureaucrats. Surprisingly, the luxury consumption patterns of these classes differ. White-collar workers in the public sector are fearful of corruption scandals and repercussions, so they won’t flaunt their wealth ostentatiously. Given this, luxury brands have to understand that the “one-size-fits-all approach” doesn’t work with the Chinese middle-class. Evidently, discounted prices are appealing to middle-income households but then again not everyone will shop at outlet malls.

3.  Millennials and Gen Zers are both large but not interchangeable generations

Some luxury brands believe that younger consumers have a similar response to advertising campaigns and yet each generation has its own idiosyncrasies.

Charlie Gu, CEO Kollective Influence told Jing Daily that “Chinese Gen. Z grew up witnessing China’s rapid rise on the global stage. As a result, they possess a national pride that has been seen also among the millennials.” Indeed, national pride is a common denominator of the younger generational cohorts but that doesn’t imply that all members share the same viewpoints and positions. As Gu points out Gen. Z is a paradox, being both an “early adopter of Western luxury trends” but also a devotee of Chinese home-grown brands. Conversely, millennials are only now warming up to national brands, seeing international players as a dominant force in the luxury world.

Charlie Gu identifies influencer marketing as an additional breaking point between the two-generational cohorts. He believes that “top-tier influencers with large followings don’t have such a strong appeal to Gen. Z. Unlike their parents (mostly millennials) who considers top influencers and key opinion leaders as a trusted authority, Chinese Gen Zers identify with people who are more like their peers. They are less interested in following mass trends and are more about living a bona fide lifestyle within their social tribe,” says Gu.

4. Multigenerational households create capricious buying patterns

According to the Pew Research Center, 20 percent of the U.S. population lived in multi-gen households in 2016, but the U.S. is not the only country where multigenerational homes are on the rise. High housing prices, low wages, and negative economic conditions have created a demographic shift, changing the structure of the modern family.

In China’s coastal cities, properties are notoriously expensive and the cost of living is high. In addition, there’s the traditional Confucian value of Filial Piety (孝, xiào) under which children are obliged to become caregivers to their aging parents. As grandparents become household heads, the younger members of the family grow into spoiled children. There is extensive literature on the development of relationships inside the multi-gen home and the effects that this living arrangement has on child development. The “little emperors” become decision-makers, taking the lead in luxury purchasing decisions. On the other hand, parents are exposed to the views of grandparents (millennials influenced by baby boomers) being persuaded to embrace new consumer behaviors. In conclusion, the perceived value of luxury could change.

5. Women empowerment

Luxury brands should forget ernai (concubine) and tai tai (wealthy wife) and focus on career women in China. According to the Robb Report, “there are more than 140 self-made women billionaires in China today, which is more than three-quarters of all the self-made women billionaires worldwide.” Moreover, women have more opportunities for career advancement in China than in many Western nations, and Swiss private bank Julius Baer estimates that in 2017 at least 31 percent of top senior management positions in the region were held by women.

As stated above, one consequence of the one-child policy is the gender imbalance which offered women an edge. Education was no longer an exclusive male right, and girls were sent to school and were pushed to pursue highly-skilled jobs. In contemporary China, women were allowed to take full advantage of the resources reserved for boys. But entering the workforce meant postponing marriage and childbearing.

The emancipation of women didn’t only change the consumer’s lifestyle, but it also impacted luxury consumption. A good example is Porsche. The luxury carmaker is a company associated with high-net-worth men, but in 2015, almost 40 percent of Porsche China sales came from women.





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Fendi Opens a New Chapter of Its History in Shanghai


Fendi’s love for China was recently celebrated with a catwalk show titled Roma in Shanghai, which also featured a moving tribute to its creative director of 54 years, Karl Lagerfeld.

This is only the second major Fendi event to take place in China over the past 12 years and represents a major step forward for the brand. By showing 100 looks from their Autumn/Winter 19/20 collection (15 of which have never been presented before) to a star-studded parterre filled with 600 influential guests like Chinese actor and singer Timmy Xu and model You Tianyi, Fendi created yet another epic moment to add to its long history of fashion achievements.

The chosen location was the Powerlong Museum in Shanghai: a stunning 23,000 square meter museum that features a large, breathtaking minimalist ramp that spirals around the central building. The site was drenched all in white — one of the favorite colors of the late Silvia Venturini Fendi, one of the brand’s creative directors and the granddaughter of Fendi’s founders, Adele and Edoardo Fendi.

Silvia Fendi herself was the mastermind behind many of the label’s best-selling bags, from the Baguette to the Spy and the Peekaboo. She’s contributed to the creative growth of the brand since 1992 and, remarkably, is the only member of the founding family still on the company’s board.

Growing from a troubled brand at the end of the ’90s into a billion-euro turnover twenty years later, Fendi is one of the masterpieces of Bernard Arnault’s LVMH brand conglomerate. He succeeded in preserving the brand’s DNA and heritage thanks to the heavy involvement of Silvia Fendi and Karl Lagerfeld, which brought a unique brand of “cool” to the label. It’s no coincidence that the two most recent turning points of the brand’s history happened in China.

The first was in 2007 when the brand held the unforgettable fashion show on the Great Wall of China, an effort in investment and energy that took almost two years to create but placed Fendi on the Mount Olympus of the fashion brands. More than the collections, it became an event that refreshed the brand perception and put the Roman house amongst its most prestigious competitors, including Dior and Chanel. This event alone justified everything that LVMH put into the relaunch of Fendi.

From the opening of Palazzo Fendi in 2005 to the Great Wall show in China, every action demonstrated that the brand, headed by the duo Silvia Fendi-Karl Lagerfeld and the energetic direction of Michael Burke, was working with a precise vision and tenacity that was indeed the right path towards global success.

Silvia Venturini Fendi is a discreet, understated iron lady, devoted to her family and the company, she is also an art lover, a curious explorer, and an unstoppable force of nature deeply passionate about her job. Being most part of the fashion business made by leather goods, Silvia Venturini Fendi herself largely contributed to the revenue’s growth of the past years. She is also one of the best talent scouts in the industry, as the likes of Gucci Alessandro Michele and Frida Giannini, Dior’s Maria Grazia Chiuri and Valentino’s Pier Paolo Piccioli along with designers like Giambattista Valli worked in her team at the beginning of their careers. And Virgil Abloh and Kanye West also collaborated with her well before becoming stellar celebrities.

Her mentor has always been Karl Lagerfeld and she said on this occasion that he taught her everything, and especially:

  • To always look for more
  • To think outside the box
  • To always look to the future

It seems that the end of the Shanghai show marks a special and virtual passing of the torch from Karl to Silvia with Fendi CEO Serge Brunschwig publicly congratulating Silvia Fendi by raising her arm in a sort of symbolic acknowledgment of a victory. And no accolade could be more deserved.





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How WeChat Links Social Commerce and New Retail for Sephora


With an uncertain political climate and the rise of domestic brands, foreign beauty companies have never had a more challenging time to conquer China’s beauty market. They’re facing a unique consumer whose appetite for new products and the latest technology is ever-increasing. To keep relevant, constant adaptation is needed. And Sephora, the 50-year-old global beauty retailer, understands this.

The brand first ventured into China some 14 years ago and has quickly expanded, and to say that Sephora now has morphed into a leading digital innovator is not an exaggeration. For example, last October, it created a new retail system connecting its 200+ brick and mortar stores with their website, app, Tmall, JD, and their WeChat Mini Program to pave the wave for consumers to enjoy a truly seamless beauty experience.

“For social commerce, the big buzzword over the years is omnichannel,” said Benjamin Vuchot, Asia President of Sephora. “I think to be successful in China, we have to make sure we always look for the next channel, that you are able to connect back to the heart of your business, which for us is about building the community.” And as a popular hub for chatting and sharing, WeChat is the natural space to build that community.

Sephora's Mini Program interface.

Sephora’s Mini Program interface.

Opening Sephora’s beauty account on WeChat is like being greeted by an actual beauty KOL — followers can find endless tips on how to buy liquid foundation, which ones are the best quality, and so on. The experience is fun and doesn’t necessarily have an immediate commercial connotation. The brand also initiated a “Member Get Member” program on WeChat, where Sephora members are incentivized with rewards to invite friends to sign up and try more products. And the offline experience mirrors the online one: Sephora encourages visitors to use its Mini Program to update their in-store loyalty program to access deals, points, and special offers.

The changes that WeChat brings to Sephora are obvious. According to the company, the members recruited from its WeChat Mini Program are two years younger than that of Sephora China (from the app, to the web, to stores), which confirmed it as an effective tool to target this lucrative new demographic, though the fulfillment of this required a very agile tech integration to be able to connect with both the company’s ecosystem and WeChat. “It’s necessary because I think the Mini Program is a mix between the trend of social commerce,” commented Vuchot, “(and is) the drive of traffic and revenue to own the brand in China at the moment.”

However, what’s noted is that WeChat can’t replace the app, and Sephora has distinct strategies for these two digital touch points — the app gives a full rendering of what e-commerce offers (it’s like a real store in the palm of your hand); while the Mini Program focuses on trends, communication, and product launches. “In the end, we need to remember that digital has increased the number of points of contacts we have with our customers,” said Vuchot, “whether it’s the native app or the Mini Program.”

What Sephora realized early on is the unique digital landscape in China — millions upon millions of consumers equipped with smartphones that have been immersed within the Tencent environment. They also realized that WeChat is in line with what Chinese consumers demand today — the ability to access anytime, anywhere, on any device.





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Your Brand DNA is Key to Success in China


When the French retail group Carrefour recently announced it was selling an 80 percent stake in its Chinese operations, a lot of Western companies watched closely. Carrefour, which once dominated retail across China, no longer felt it could compete against more nimble local competitors after experiencing a significant decline in revenue.

Most Western companies struggle in China, and Carrefour is no exception. To Western companies, the Chinese market holds an allure due to its size, growth potential, increasing sophistication, and digital leadership. As a result, there has been a consistent influx of Western brands into China. In fact, China has become so trendsetting, that winning there is now seen as the precondition to winning around the world, particularly in the luxury segment.

Blinded by the prospect of growth in the Chinese market, most companies underestimate the market’s dynamics, the necessary investment and digital infrastructure needs, and the fast-evolving preferences of Chinese consumers. Early advantages, like the kind Carrefour once had, can be wiped away quickly when trends aren’t anticipated early enough, and countermeasures are implemented too slowly. Carrefour was initially successful in China, but eventually, when consumers increasingly embraced digital purchases and demanded fast and convenient delivery to their offices or homes, Carrefour wasn’t able to compete with the local businesses that reacted better to changing customer preferences.

Is global brand DNA an obstacle to local success? 

A lot of global companies struggle when deciding how much freedom to allow their local organizations in China, and brands commonly ask if the brand DNA and positioning each need to be adjusted for the Chinese market.

But, across industries, the issue many brands face is not about having to develop a Chinese brand DNA — it’s a much more fundamental issue. Many brands lack a compelling and truly differentiating global brand story. Then they are surprised when Chinese consumers don’t buy into it. Brand positioning is still often confused with a vague description of the business they’re in. It’s not unusual to hear companies state that “we are the most admired watch company based on our exceptional craftsmanship and heritage” or “we are the most trusted organic grocery brand.” The list goes on and on.

When brands describe themselves in that way, they become extremely vulnerable because these positioning statements are too generic and lack any distinction. Also, they omit the consumers from the conversation. Consumers couldn’t care less about a self-centered description of a brand — this is usually the brand’s biggest mistake. Many brands don’t provide any rationale for consumers to buy. Relying purely on a tech- or design-centered discussion is not enough, especially in China where consumers choose the brand first and the product second. This makes brand equity even more important in China.

Brands should always be defined from a value proposition towards consumers: What rational benefit do we provide? How is it different than any other brand? And finally, what emotion do we strive to inspire? The most powerful brands always provide relevant rational and emotional benefits, with each being highly distinctive amongst their competition.

The lack of a compelling global brand DNA and relevant positioning is a fundamental hurdle for success in China. Before Chinese consumers buy a product, they need to first understand the brand benefits. And for them to understand the brand, companies need to define their brands from a consumer perspective — and with much more precision than most do today. Without that exercise, a Chinese launch will surely fail.

Insufficient insights give slow and imprecise measures

The second dilemma for most Western brands in China is a lack of real-time consumer insights and the unwillingness to invest in the proper infrastructure and tools needed to understand trending consumer issues, topics, and desires as they happen. Recently, a well-known European luxury brand with sharply declining sales in China was convinced that their losses were due to a lack of quality perception. However, they didn’t have real-time consumer data to validate this assumption or figure out what exactly caused the negative perception. They were also unable to identify whether the issue was trending and if so, why. These questions could have been answered by applying advanced consumer consent measurements drawn from sophisticated data querying technologies like AI and machine learning, ultimately making sense of consumer conversations about the brand on digital platforms.

Local Chinese management wasn’t able to convince top global management that this investment was necessary, and as a result, countermeasures came too late, too slow, and were too imprecise. This wastes time and money, and the competition can take advantage of the void while the brand starts to decline faster. Not wanting to invest a nominal amount into the right digital infrastructure early on so the brand can understand insights will cost much more in lost profits later, and it may ultimately cost the brand its market position.

To survive or not to survive — complacency is not an option

If the global brand positioning is precise, compelling, differentiating, and local management teams have access to real-time insights when they need them, then brands can operate successfully in China. What’s important is to not be complacent or lose time by simply guessing or hoping. Fast, data-driven decisions are key in order to compete with ambitious, bold, and disruptive local Chinese competitors who are much closer to Chinese consumers than Western companies.

Carrefour could still be in growth mode in China if it had anticipated shifting consumer preferences earlier. It could have kept its global positioning while quickly and accurately adapting the execution of some of their services to meet local needs. But there is no mercy for being reluctant or not close enough to consumers. Consider this a wake-up call for every manager with China aspirations.

 

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, serves as a regular keynote speaker, and holds management seminars in Europe, the USA, and Asia. Follow @drlanger





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How Art Saves the Malls — Lessons from China


There’s a unique bond that exists between art and luxury brands that a lot of marketers have exploited lately. The Cartier Foundation, The Louis Vuitton Foundation, and The Prada Foundation are just a few examples of how brands already have a deep relationship with art through public exhibitions. This practice has led to a new type of innovative retail-exhibition that’s giving Chinese consumers luxury brands in the form of art.

China in the 2010s was the perfect playground for luxury brands to experiment with touring exhibitions which mixed art and high-end fashion. Among others, Dior’s exhibition The Art of Color — where the hottest contemporary Chinese artists created artworks from Dior’s universe of style — opened in Beijing in 2008 and Chanel’s Mademoiselle Privé exhibition in Shanghai, which opened in April 2019, showcases work by Chinese artists who reinterpret the inspirations of Coco Chanel.

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Dior’s exhibition The Art of Color

Today, after massive growth in China’s luxury market, two influential art strategies have emerged from these initiatives — art malls and museum licensing — proving that art is now a surprisingly useful muse for luxury marketing in China.

The K11 art mall, which opened in Hong Kong in 2010, was the first shopping center with the vision to bring culture to younger Chinese generations where they go the most. As Adrian Chang, the founder of K11 explains in a recent article, the mall was a quest to “democratize art by creating a habit for millennials to appreciate and understand all forms of beauty.” After opening K11 art malls in Shanghai, Wuhan, Shenyang, and Guangzhou, K11 now has a total of 29 projects set to be completed in China by 2024.

James Shen’s 17.5 meter-high installation spreads out across multiple levels of the K11 art mall.

Interestingly, K11 is now pushing the boundaries even more by partnering with ‘cultural brands’ like le Centre Pompidou, The Armory Show in NYC, and the Royal Academy of Arts for a series of Master Exhibitions that will feature works by artists like Salvador Dali or Claude Monet.

K11 also offers artist residencies that gather artists around a common theme relating to consumerism. For instance, “Bagism,” the satirical art movement created by John Lennon and Yoko Ono in the 1960s, became a theme for artists to make work with luxury brands’ handbags. A good example is Shanghai-based contemporary artist Zhang Enli’s painted Birkin bag, which will be auctioned off for charity.

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Bagism exhibition at K11 in 2016, courtesy of K11

This art-and-retail concept is a new type of immersive luxury shopping experience that American malls still haven’t tried on a serious scale.

In contrast, Showfields opened last year in New York City with the vision of creating temporary retail spaces that merge digitally-native brands with contemporary art and stands as one of the few examples of art-retail malls in the States. Tal Nathanel, the founder of Showfields, explains that the goal of the concept mall was to provide “visitors a transmuting retail experience, combining two floors of experiential shopping with two floors [of] shifting art exhibitions and a coworking and event venue.” While it is too early to say how successful the Showfield’s formula is, it remains one of the very few examples of shopping experiences merging with contemporary art in the U.S.

Inside NYC’s newest “art mall” concept, Showfields.

In China, art malls have been the place for teens to hang out for over a decade because they’ve made rotating content a habit that facilitates social media and e-commerce — something U.S. malls have yet to understand and implement.

One reason why art works so well in Chinese malls has to do with the idea of cultural capital, the French sociologist Pierre Bourdieu’s theory behind why art and luxury brands are psychologically linked. His cultural capital model, simply put, demonstrates that culture becomes a currency once the middle class becomes the socially dominant class. Therefore, taste, manners, and credentials become more valuable than levels of wealth. The generations of Chinese consumers born into a quest for economic growth have become a massive middle class now searching for this cultural capital.

In contrast to K11’s contemporary art exhibition strategy, a new player is now bringing innovative cultural capital to China’s middle class by relying on the intellectual property assets of cultural brands. One of China’s most innovative retail entrepreneurs and the founder of Alfilo group, Yizan He, understood the power of cultural capital and took it to a new level. “The difference between contemporary art and artists versus working with museum brands is that museums have a huge fan base thanks to their heritage art pieces,” Yizan said about his client base.

Yizan tapped into the massive amount of art lovers in China and worldwide that follow museums and founded Alfilo group to help merchandise the IPs of different museums to China. As Yizan explained, “We quickly realized that Alibaba was ready to offer us more than the museum brands could ever desire, free front page banners, etc., and that is because these museum IPs had immense depth and width. Yet, we realized that one thing Alibaba could not provide us with was the physical experience.”

Yizan opened its first British Museum pop-up store in 2018 in Shanghai, and it became the LCM mall’s most visited store with 90 thousand visitors for the month.

British Museum Pop up store experience at Shanghai LCM mall, courtesy of Alfilo group.

The experience-based store was conceived in three parts. Part one was a store section consisting of VR/AR content, touch panels, and replicas of precious objects. Part two consisted of merchandise that was available for purchase, and part three was a children’s playground. Pre-launch campaigns featured the Chinese model and actress Angelababy carrying a well-known British Museum artifact, the Anderson Cat, on social media. The British Museum’s name recognition was, in fact, so influential that Alibaba and other top influencers offered advertising support for free.

Alfilo now partners with consulting agencies to define what upcoming cultural trends will best serve their museums clients and the different assets they have. Every museum merchandising venture comes with a specific story that buyers can tap into. By licensing all of the British Museum’s assets, Alfilo created a retail partnership with unique merchandising, like a scarf featuring an 18th-century chess game board, the “Noble Game of Swan.” The Belle group, China’s leading women shoe retailer, partnered with the museum to produce handbags and footwear featuring British Museum IP that was both interesting and stylish.

During the pop-up dates, Alibaba’s landing page and mobile banners were offered to the British Museum and linked to a museum shopping page. Alfilo asked users to make videos to show how they would dress if they were invited to the gala, with one video receiving 255 thousand likes and 86 million views.

That video features a lady wearing a scarf, complete with a call to action link so one can buy the scarf right away. “Generating 184 million viewers in 48 hours from coastal areas of China, the campaign proved that such a thing could be very well adapted for U.S. markets in areas where malls are still a gathering destination,” Yizan said.

These made-in-China marketing practices are working tremendously well and offer an untapped world for U.S. retailers to try and leverage inside malls across America.

 

Tanguy Laurent is Managing Partner of Creative Capital, Altavia Group Leading US Chinese retail branding agency. Follow him for more insights on Linkedin: https://www.linkedin.com/company/creative-capital-hk





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