Chinese Whispers: Tourists Spend Less on Luxury Goods When Traveling in Japan and Hong Kong, and More


In “Chinese Whispers,” we share the biggest news stories about China’s fast-moving luxury industry that have yet to make it into English.

In this week’s edition, we discuss:

1. Chinese tourists are spending less on luxury goods in Japan and Hong Kong – DW News

Chinese tourists, who had been spending big on luxury products when traveling abroad, are now becoming more budget-conscious, according to the Chinese media outlet DW News that cited reports in Japan- and Hong Kong-based publications. Travelers from China still supposedly prefer purchasing high-value products but at lower prices. Consumption trends from Hong Kong also indicate that Chinese consumers are now buying fewer high-priced items such as luxury handbags, jewelry, and timepieces. There are a few factors that account for this change in shopping behavior, the report added, including currency fluctuations, a government crackdown on daigou agents, and the high-speed development of China’s domestic luxury market.

The Chinese conglomerate Fosun Group has established an in-house management and advisory unit to support fashion brands entering the Chinese market. Photo: Shutterstock

The Chinese conglomerate Fosun Group has established an in-house management and advisory unit to support fashion brands entering the Chinese market. Photo: Shutterstock

2. China’s Fosun Group sets up a fashion management unit to assist brands entering the country – LadyMax

The Chinese conglomerate Fosun Group—which owns a list of luxury brands like Lanvin, St. John, and Wolford—has established an in-house management and advisory unit to support fashion brands entering the Chinese market called the Fosun Fashion Brand Management Company, the firm announced on February 22. The new unit will provide a wide range of services for their luxury and fashion clients, including consultation on retail and wholesale operations, marketing and communications, and merchandising. It’s a move that signals Fosun’s ambition to further expand its influence within the global luxury and fashion industries.

China's online retail market continued to boom in 2018, with total sales reaching nine trillion yuan for the first time in the country's history. Photo: Shutterstock

China’s online retail market continued to boom in 2018, with total sales reaching nine trillion yuan for the first time in the country’s history. Photo: Shutterstock

3. China’s online retail sales accounted for 45.2 percent of the country’s total sales in 2018 – Winsang

China’s online retail market continued to boom in 2018, with total sales reaching nine trillion yuan for the first time in the country’s history, said a spokesperson from China’s Ministry of Commerce on February 21. Online transactions constituted about 45.2 percent of China’s total retail sales last year, which is a healthy jump from 2017’s number of 37.9 percent. The continued growth of the evolving Chinese online retail market highlights just how important it is that brands and retailers to keep adapting to the quickly-changing shopping habits of Chinese consumers.





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The Art of Content and Commerce in China


Social-commerce is not a buzzword but a lifestyle for shoppers in China. In the West, it’s more common to use an e-commerce site as the final stop when completing a purchase, but in China, e-commerce sites are a kaleidoscope where you can make new discoveries, acquire information, and socialize with your peers—hence social-commerce.

And now, with Chinese luxury consumption flowing back to the Mainland, and growing concerns of a possible Chinese economic slowdown, brands and retailers are becoming more and more anxious, wondering how to gain a stronger foothold into this trillion dollar industry.

From left to right: Jeffrey Fowler, President, North America at Farfetch; Lauren Hallanan, China marketing expert; Yiling Pan, senior editor of Jing Daily; and Ray Ju, senior consultant of branding agency Labbrand. Photo: Farfetch/Terence Chu

From left to right: Jeffrey Fowler, President, North America at Farfetch; Lauren Hallanan, China marketing expert; Yiling Pan, senior editor of Jing Daily; and Ray Ju, senior consultant of branding agency Labbrand. Photo: Farfetch/Terence Chu

With this question in mind, Jing Daily hosted it’s second CEO breakfast series yesterday, with an exclusive, invite-only group of industry players for a panel entitled, “Content and Commerce: Selling to Millennials.” It was moderated by Jeffrey Fowler, President, North America at Farfetch, the global online luxury fashion platform. And joining the conversations were Lauren Hallanan, a China marketing expert, Yiling Pan, senior editor of Jing Daily, and Ray Ju, senior consultant of branding agency Labbrand.

Jeffrey: Why content is a significant factor driving e-commerce in China?

Lauren: In China, social media platforms have e-commerce functions and e-commerce platforms have social media functions. What I find here (U.S.) is that social media platforms like Instagram are much more regulated (you have to have a certain type of account to be able to tag the brand), and they put a lot of limits on the e-commerce functionalities. Also, they are worried about being too commercial. In China, people go to social media to research products, and they are frustrated if the product buying page is not linked.

Jeffrey: Do you think Chinese consumers care whether it’s sponsored content or original?

Yiling: Authenticity of influencers is becoming a bigger issue these days. Recently, I’ve discovered more consumers talking about why certain influencers didn’t reveal a paid post. So people may not care now, but that doesn’t mean they won’t care about it in the future—Chinese consumers are learning fast.

Lauren: If consumers know it’s sponsored, and if the influencer uses the product and actually has an opinion about it, then they don’t care.

Jeffrey: What’s the distinction between a celebrity and influencer? Whose role is more effective under the context of social e-commerce? Who has a better ROI?

Ray: There is a disparity among different generations and age groups in their celebrity/influencer preferences. For the more mature generation, certain celebrities can establish a sense of quality, aesthetic and credibility, but if you look at the younger generations, Gen-Z, they are highly influenced by the idol culture. They will buy all there merchandise. But in the middle, Millennials, they are sort of skeptical about celebrity endorsements, so influencers might be more effective (to them).

Photo: Jing Daily/Ruonan Zheng

Photo: Jing Daily/Ruonan Zheng

Lauren: This (distinction) changed a lot. Celebrities are traditionally more of a spokesperson. The create professional content, with beautiful, completely photoshopped images. But now we are seeing a trend of big celebrities self-creating content on Little Red Book—similar to an influencer approach. It’s like celebrities are coming down from their high status and turning into influencers. People find this (role switch) converts very well for sales, because they have the prestige and reputation, as a celebrity, and now the platform is feeding off celebrity type of content.

Yiling: I recall a conversation I had with a China contact for a luxury handbag company. She criticized another brand’s collaboration with Mr. Bags. She said: ‘you don’t know if it’s the product itself that’s popular, or it’s the influencer impacted people to buy.’ That’s what a lot of luxury brands in China are thinking about. Celebrity is still in better position to push sales; influencer is very niche, but getting more expensive and their ROI is actually getting lower.

Jeffrey: What about traditional media? They are still big names in China, do they hold influence and relevance in terms of driving sales?

Yiling: So for traditional fashion publications, in China, they are trying very hard to stay relevant, as their profit and revenue are really slowing down. I remember back in 2017, for example, Vogue China sold some Stella McCartney products via a WeChat mini-program, which the editor-in-chief also promoted on her own social media accounts.
I think they are making a great effort to drive sales by leveraging their great content and storytelling capabilities, though I don’t have data to prove how successful they are.

Ray: My view is a little more pessimistic. Traditional media does have a huge social media following, but the form of the content has dramatically changed — it’s an article on WeChat hosted by WeChat public account — but the problem is how to integrate that with brands. Whereas influencers started with that transparency: I am here to tell you what’s good, where to buy them.

Yiling: I think there is still hope for traditional media to catch up in the age when content is playing a big role. The level of professionalism of traditional media is different from influencers. For example, many former fashion editors have great style, but if you look at popular influencers, they’re styles are not as sophisticated.

Lauren: That’s why there are a lot of fashion editors who have quit traditional media and started their own social media accounts, and then become very popular because they have that background.

Jeffery: How do you see live streaming being used effectively by brands and retail channels to sell?

Lauren: When it comes to live-streaming, there are a lot of brands trying to host, but if it’s one-offs, is not gonna work because they missed the whole point of live streaming. Taobao has an ecosystem of live streaming influencers, who actually work with brands. They will try products on, show it up close, model the details, and match it with different things. This type (of model) actually has been working very well, because the influencer has established an audience base who trust them. I think more brands will work with influencers instead of hosting their own events.

Ray: I think the whole allure of live streaming is that people are not just watching, but commenting and sending gifts, and the host is interacting with them the whole time. I am not seeing any luxury brands doing a lot on this, perhaps, because they are afraid to see bad comments. I also think what’s gonna bring real change is 5G technology, which is going to drastic changing live streaming, AR, VR — the product and experience.

Yiling: Recently I watched a live stream of Burberry’s London fashion. They are the first brand embrace the “see now, fashion now” model, even they have some setback recently. People can watch the show and comment, and after the show, they can purchase the collection. This is where I see live streaming: as the starting point to tease consumer, arouse their interests in brands’ products. They will think about the gorgeous runway show, and say, ‘Ooh, I can buy it!”

The interviews have been condensed and edited.





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Inside MAC Comestics’ First Experience Center in Shanghai


The center blends product discovery, social engagement and purchase into an immersive journey, making it one of the more sophisticated interactive retail experiences in the cosmetics category in China.

Created by Wunderman Shanghai and led by managing partner James Bay, the center was the result of six months of research to understand Gen-Z‘s makeup purchase behavior. This was done through cognitive walkthroughs, exit interviews, and focus groups.

MAC’s WeChat mini-program is the touchpoint for the entire store experience. Courtesy photo

MAC’s WeChat mini-program is the touchpoint for the entire store experience. Courtesy photo

Upon entering, digital totems greet customers and invite them to scan for a WeChat check-in, instantly displaying a personalized greeting. MAC’s WeChat mini-program then becomes the touchpoint for the entire store experience.

In the lipstick section, a virtual makeup mirror enables customers to sample 18 MAC lipstick colors in 30 seconds.

In the eye shadow section, customers can choose from six influencer-created palettes and then tailor them to their own tastes, through the brand’s WeChat mini-program, which also handles payment and pickup of their custom 3D-printed palettes.

The foundation section uses an infrared touchscreen to match shades with the customer’s complexion.

Also, the 2nd floor of the center contains an open space for master classes and KOL (key opinion leaders) events.

According to Mark Jiang, brand general manager, of MAC Cosmetics, the “true M·A·C experience is founded in a traditional retail environment”, despite the brand’s strong e-commerce presence.





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Vipshop Gains Customers, But Stock Slides on Lower-Than-Expected Revenue


Shares of Vipshop Holdings Ltd. on the Nasdaq had been up about 34 percent year-to-date, but that impressive run ended on Thursday after the company announced its lackluster fourth quarter and full-year 2018 earnings results. The company still managed to beat Wall Street earnings estimates by $0.01 per share at $0.19. That slight beat was not nearly enough to placate investors who fear China’s slowing economy will drag the e-commerce sector.

Revenue and profit growth showed signs of a significant slowdown for the company, a trend that didn’t match up with Vipshop’s economic growth projections. Fourth-quarter results were particularly important for the e-tailer as they included sales from November’s all-important Singles’ Day as well as Christmas and the company’s own anniversary sale on December 8th. Vipshop’s number of customers making purchases on the platform during Singles’ Day increased 23 percent year-on-year.

Revenue came in at the low end of guidance: 8.1 percent year-on-year in the fourth quarter to $3.8 billion (RMB 26.1 billion), which was below analysts’ estimates. Full-year revenue increased 15.9 percent to $12.3 billion (RMB 84.5 billion).

The company’s growth rate in Q4 last year was significantly slower than in Q3, which saw revenue increase by 16.4 percent versus the same period in 2017. In contrast, China’s e-tail giant Alibaba saw its revenue grow 41 percent year-on-year in the final quarter of 2018, although that success was boosted by the company’s wider range of products, including a rapidly expanding cloud business. Vipshop continues to rely almost entirely on e-commerce sales, though its internet finance business is showing modest gains.

Vipshop guided for first-quarter 2019 revenue to increase 0-5 percent year-on-year.

Despite these lower-than-expected results, Vipshop CEO Eric Shen remained upbeat by focusing on how the platform won a 13 percent year-on-year increase in active users (with 23 percent of those users coming from partners Tencent and JD.com). Meanwhile, there was another silver lining: The company also saw a 28 percent quarter-on-quarter increase in Super VIP Paid Memberships, bringing that total to 3.2 million customers.  And though revenue wasn’t as high as expected, the total number of orders on the platform grew an impressive 35 percent year-on-year during the quarter.

And finally, Vipshop’s operating margin increased 0.1 percentage point to 3.9 percent despite a 1.1 percentage point decline in gross margin — a positive takeaway from the earnings report.

Two days prior to the company’s earnings release, Bank of America downgraded the stock to neutral from buy, and the stock is trading down over 13 percent from the opening bell to $6.32 as of 12 p.m.





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Louis Vuitton “Drops” New Sneaker Collection on WeChat


Luxury brands in China have found fertile ground in which to practice the “drop” retail model that they have borrowed from the Western streetwear industry in recent years: the WeChat mini-program.

French luxury powerhouse Louis Vuitton, following in the digital footsteps of rivals like Rimowa, Burberry and Balenciaga, became the latest megabrand to “drop” on WeChat, unveiling its newest products to Chinese consumers.

On February 17th, a message from Louis Vuitton’s official WeChat account kept fans awake — it stated that the new “LV Trainer” sneaker collection was now available for $1,316 to $1,860 (RMB 8,850 to RMB 12,500) — via the brand’s WeChat pop-up store enabled by the mini-program. The collection, designed by artistic director Virgil Abloh for Louis Vuitton’s 2019 Spring/Summer Menswear collection, is available in five styles, and blends streetwear DNA with the brand known for its craftsmanship and heritage. The “drop” model on WeChat seems to have helped the brand create a sense of hunger and eagerness among its biggest followers.

Louis Vuitton released the new “LV Trainer” sneaker collection (available for $1,316 to $1,860) — via the brand’s WeChat pop-up store enabled by the mini-program. Photo: Jing Daily illustration

Louis Vuitton released the new “LV Trainer” sneaker collection (available for $1,316 to $1,860) — via the brand’s WeChat pop-up store enabled by the mini-program. Photo: Jing Daily illustration

The mini-program included all relevant product information, as well as design details: flower monogram on the side of each sneaker and why the numbers 54 and 408 are meaningful to the brand. The digital pop-up store also listed a number of other products from hoodies and handbags to accessories to match the sneakers.

Customers can place orders through the mini-program and communicate directly with Louis Vuitton’s WeChat customer service if they have questions. Additionally, the mini-program lists two physical store locations where customers can get their hands on the collection, but only until March 10th.

LVMH-owned luxury luggage brand Rimowa was one of the first brands in China to engage in “drop” sales on WeChat. The German suitcase maker launched various limited editions in collaboration with streetwear brands Off-White and Supreme in mid-2018, which sold out quickly.

British high fashion brand Burberry started to experiment with WeChat pop-up stores for “drops” last September after Riccardo Tisci debuted his first Burberry collection at London Fashion Week. The London-listed company said in its latest earnings conference call that this retail model was effective in boosting sales to Chinese customers. Balenciaga’s mysterious release of a limited-edition handbag in January also sparked a lot of excitement among Chinese fans.

Thus far, the “drop” retail model seems to be working well for luxury brands in their efforts to tease Chinese consumers. Adopting this tactic that is widely used in the youth-centric streetwear industry is a savvy move to attract a younger generation of consumers, who place a much higher value on whether a product showcases their individuality or is cool. However, it remains to be seen if this model will expand in the luxury retail arena and whether it will be appropriate for brands that do not have strong streetwear DNA.





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Chanel and Fendi After Karl Lagerfeld


With the passing of Karl Lagerfeld, not only an era ends, but also the brands he led for decades must not forget his legacy. I knew Karl personally, and what impressed me was his deep understanding of the brands he led.

Often fashion designers overshadow their brands, especially when the designers are larger than life, like Lagerfeld was. In the extreme, it is more about the designer than the brand. In this aspect Lagerfeld was different. While his creative genius was always visible, be it at Chloé, Fendi or Chanel, the equity of the brands always came first. To me, one of his greatest strengths was maintaining the integrity of his brands, while continuously developing them further.

In my luxury management books, seminars and keynotes, I always highlight how important one aspect of managing luxury brands is: creating unique experiences. It is the ultimate art. Sometimes I go as far as defining luxury as the ability of perpetual dream creation, because a unique, once-in-a-lifetime experience is what luxury consumers seek when they decide on a brand.

The dilemma, then, is how to create dreams — these unique experiences — again and again? What many luxury brands do is to compromise brand equity with creative executions that are developed to provoke, to excite, to inspire. But when this goes too far, at the expense of brand equity and to the promotion of the designer’s fame, then brands endanger their long-term appeal.

To me, Karl Lagerfeld had the unique ability to do both: to respect the brand while creating new and exciting executions continually. He surprised his customers at Chanel with radically contemporary collections, unique and often groundbreaking, while always being true to the core of Chanel, reinterpreting the legacy of Coco Chanel. At Fendi, he introduced playfulness and wit into his collections and creations while carefully maintaining the core of the brand with its deep roots in Italian timelessness.

Most importantly, Lagerfeld always managed to stay ahead of time. He was one of the first to capitalize on social media with his profound understanding of the power of images. He experimented with materials and colors and managed to keep relevancy of two-heritage brand even for millennials and Generation Z. And while many other designers struggled to understand how to address the highly-sophisticated taste of Chinese luxury consumers, and their desire to express themselves, Lagerfeld’s creations became among the most sought-after among the world’s most significant luxury consumers.

It will not be an easy transition for both brands after such a loss. Looking back at history, Chanel took a nosedive after Coco’s passing. Hence, bringing the right talent on board will be crucial. In my point of view, the ability to maintain a strong brand DNA, and combining it with surprising, creative expressions and unique experiences will be critical. Hiring a designer who overshadows the brand with his personality could endanger the luxury powerhouses that Lagerfeld has built.

 

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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Can Brands Challenge Chinese Beauty Aesthetics?


Marketing in China is about more than just understanding the culture, both traditional and modern. There’s a whole range of aesthetic preferences that affect how consumers in China view everything a brand does — from the surroundings it uses in an advertising campaign to the models it hires.

What many in the West consider beautiful is not necessarily beautiful by Chinese standards, and that difference can affect what those consumers think about a brand. Chinese beauty standards have, in fact, remained rather rigid over the years, and brands that deviate from the perceived norms in that country may generate a larger discussion than was intended.

Spain-based retailer Zara recently stirred up an unexpected social media discussion after it used 25-year-old Chinese model Li Jingwen (who goes by the name Jing Wen) in their lipstick ad campaign. The debate about her appearance in the campaign hinged on the fact that she has freckles, which aren’t considered beautiful in China. Li herself seems to understand this cultural position, as she stated  in a 2016 Vogue interview that “when I was little, I really hated [my freckles] because normally Asians don’t have them.” And yet, despite this consensus perception in China, models.com named Jing Wen a Top 50 model in the fashion industry in 2017.

Li’s appearance in the campaign generated a mostly negative response on the Chinese social media platform Weibo, yet there were some users who defended the company for using a model who isn’t considered beautiful by traditional Chinese standards and for refusing to cover up or airbrush out her freckles for the mainland China market. Based on the comments, it appears that more Chinese consumers are now accepting of different appearances and body types than in the past — a change that might benefit Zara and the whole the fashion industry in the long term.

To their credit, the brand did state that they chose Li for a global market and not just for China. In an interview posted to the Chinese platform Pear Video, a Zara spokesperson said that “the aesthetics of the Spanish people are different,” also adding that “our models are all photographed purely, the pictures aren’t changed, and they’re not modified.”

Brands may not intentionally challenge the standards of Chinese beauty, but they are likely to sometimes choose models who don’t fit into that country’s set standards. It’s a risk for brands, but one that may be worth taking, since greater diversity in China greatly aligns with the next generation of consumers who yearn to showcase their individuality via their product choices.





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Chinese Fans Bid Farewell to Karl Lagerfeld by Showing off Their Chanel Collections


The entire fashion world woke up today with the news that Karl Lagerfeld, one of the legendary fashion designer of our times, and best known for his creative role at Chanel, passed away at the age of 85 in Paris.

In China, Karl Lagerfeld was better known by his household name “Lao Fu Ye (老佛爷),” the term that was once exclusively used by Chinese people to address Empress Dowager Cixi (慈溪太后) — who held control of the Chinese government in the late Qing dynasty for about five decades. The fact that Chinese consumers like to call Lagerfeld “Lao Fu Ye” demonstrates his status and power as the “Kaiser” of the fashion world.

Lagerfeld’s connection to China may have been deeper than many have thought. In 2014, he designed a hotel in Macau, The Karl Lagerfeld Hotel (owned by SJM Holding, LTD, A Macau casino company), signaling his entry into the nation’s hospitality business. And two years ago, the designer’s namesake fashion label, Karl Lagerfeld, was acquired by a Fujian-based menswear company Septwolves. The latter now owns the distribution rights to Karl Lagerfeld’s brand in the Greater China region.

As news of Lagerfeld’s passing broke last night, China’s social media platforms, including Weibo and WeChat, have seen an influx of posts mourning the fashion industry’s huge loss.

Chinese actress Zhou Xun (周迅), has been the face of Chanel in China since 2007, posted on Weibo recollections of her working relationship with Lagerfeld over the past decade, and expressed her best wishes to him in heaven.

Another Chinese fashion icon and model Liu Wen also wrote a condolence note on Weibo to recall her first fashion runway show experience with Chanel back in 2008. Liu’s post has become one of the trending topics, attracting over 76 million views and close to 10,000 comments.

Aside from celebrities, a wide variety of Chinese media outlets from Yicai to Harper’s Bazaar, and numerous WeChat public accounts reported the news and published long features to profile Lagerfeld’s life to acknowledge his contributions to the industry.

Two topics about Karl Lagerfeld's passing were trending on China's Weibo.

Two topics about Karl Lagerfeld’s passing were trending on China’s Weibo.

But for the majority of Chinese consumers, who have limited access to and knowledge of the glamorous fashion world whatsoever, they chose to express their sorrow and sadness in a special and controversial way.

Late last night, a topic called “How many pieces of Chanel do you have?” started trending on Weibo (see image above). The host of this topic called for users to post Chanel products that they own or aspire to own as a way to memorialize him. The topic has aroused enormous interest from netizens, with many of them posting pictures of their Chanel products from watches to handbags to cosmetics. As of this publication, it had attracted over 74 million views and 8,186 discussions.

Certain Chinese social media users posted their Chanel items as a way to memorize Karl Lagerfeld.

Certain Chinese social media users posted their Chanel items as a way to memorize Karl Lagerfeld.

For example, Weibo user “Ningxi” commented, “An eyeshadow palette, a bottle of perfume, and a Leboy handbag, are all I have now. I don’t own many, but there are many that I wish I could have in the future. Chanel is a divine brand in my heart. I will work harder to make more money to buy its products.”

However, not all Chinese people agree that showing off Chanel handbags is an appropriate way to pay tribute to Lagerfeld. One user named “ajuer” wrote, “These people are so self-centered. R.I.P is all you need to say. No one cares about how many Chanel items you have.” Another user echoed, “These people just want to show off. I doubt how sad they are about Karl’s passing!”

In recent years, the death of renowned fashion players from Kate Spade to Hubert de Givenchy has created large-scale online discussions among Chinese social media users, demonstrating the country’s ongoing and continuous obsession for luxury.





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For Your Eyes Only — 5 Chinese New Year Ads You Shouldn’t Miss


Chinese Lunar New Year, or Spring Festival, is the single most important holiday in China. Given that billions around the world celebrate it, it has also become one of the most important advertising periods of the year, easily surpassing the Superbowl and Christmas.

Most major players in the luxury industry invest in and rely on their brand power to attract Chinese consumers — the label provides a status symbol, resulting in peer approval. This has been a winning modus operandi for decades. However, with the growth of the millennial and Generation-Z Chinese consumers, the future of luxury in China will be very different.

True, Chinese consumers will always value Mianzi (面子), the importance of saving face in Chinese companies, such as avoiding conflict especially in public, but as China becomes more and more confident, the role brands play in providing positive social status will also have to change as well.

The Chinese youth market will make up a majority of luxury consumers in the near future. Brands that win big over the next five years will be those who really understand “traditional values and modern expectations.” In understanding traditional Chinese cultural truths and modern impact on those culture truths, luxury brands can connect with the millennial and Gen-Z audiences beyond just the surface level, beyond the logo or celebrities/influencers.

Here are five Lunar New Year advertisements — mostly from Chinese companies — that have done a fantastic job of demonstrating this point. They are global and very Chinese, metropolitan and very rural. Chinese brands are evolving with Chinese audiences, and with the rapid growth of homegrown Chinese luxury, those international brands that are popular now need to adapt, or they will be left behind.

Rapid Urbanization

China’s rapid development has created a big gap in the quality of life between cities and the rural areas outside of them. Both Apple and cabinet manufacturer OPPEIN tap into this cultural truth with slightly different narratives.

Apple

Apple’s ad focuses on a mother’s love, and the amazing, odd things they do to show it. Intertwined with urban migration, among hundreds of millions of Chinese people in their 20s and 30s, leaving 老家 (birth homes) to work or study. Meant to have an emotional impact (you can almost feel the mother’s sadness to see her son leave home again) on Apple’s target audience, who would have similar experiences. The entire film was shoot using an iPhone (with some amazing lenses of course), by an award-wining director, in line with the “Shot on iPhone” campaign.

OPPEIN

OPPEIN’s ad explores a parents struggle about hosting their globalized, city dwelling son and his family, who are used to the modern comforts of urban life. This very evocative film demonstrates the gap that rapid urbanization creates, and the difficulties of keeping family units together. OPPEIN does a great job to bring their products (home accessories) into the story unobtrusively.

Generational Divide

People born after 1980 have only seen China as a global powerhouse, one of the world’s strongest economies, and home to some of the world’s most innovative and largest tech startups. Their parents, however, were born in, and lived through, much tougher times, with war followed by decades of long social chaos and even widespread famine.

Alibaba x China Mobile

Peppa Pig has been both extremely popular and controversial in 2018. Alibaba saw an opportunity and created this Peppa Pig ad with China Mobile, a heart-warming tale of a grandparent’s journey to find the one present requested by his grandson. This was a beautifully crafted, evocative, and very moving commercial, though very different from other Chinese New Year ads, yet with a perfect touch of humor.

Jins

This ad is based on a true story of a daughter who lives in a big city and takes care of her aging father after the loss of her mother. The commercial explores the relationship between children and older parents, the generation gap between them, and the difficulty in understanding parents’ everyday struggles and understanding the way they show their parental love. Jin’s glasses are subtly included in the commercial, showing how they improve the elderly person’s everyday life — showing how “seeing little details” can also mean “noticing micro love.”

Family Legacy

The significance of the family has pervaded the Chinese culture for thousands of years. The ideology of the family unit held people together during the toughest times. And now, more than ever, China’s generational gap and rapid urbanization is challenging this tradition.

Alipay

This star-studded production generated a lot of positive online conversations when it was released just before Chinese New Year. It’s a multi-generational story directed by award-winning director Ann Hui, starring actors Chin Shih-chieh and Jessie Li, with music by the famous Chinese artist Chen Li. It is based on a true story of the three-generations of a family spanning some 70 years, and the good and bad times that have happened. But the symbolic character “福” (Fu, meaning happiness) has always been a constant belief in their hearts, bringing them together as a family. The “福” sign is also Alipay’s AR campaign to collect all physical “福” signs in order to promote its newly-released “apps.” Very subtle, the actual product demonstration only appears once at the end of the video.





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When Smells Sell: Chinese Male Celebrities and Their Favorite Fragrances


When fans discovered that Liu Hao Ran, a rising 21-year-old Chinese actor with over 26 million fans on Weibo, used the fragrance Chanel Bleu, Chinese social media exploded. It only took days for the topic “Which fragrance does Liu Hao Ran use?” to amass an astonishing 220 million views. His fans, in comment after comment, begged to know if it was the Eau de toilette or the more recently launched Eau de parfum that they should buy in order to smell just like him. And it didn’t stop there. Shortly afterwards, fans of young celebs like Liu Hao Ran went a step further, creating a list of other favorite young male celebrities and their supposed choice fragrances that went on to garner more than 160 million views.

To be sure, the two posts were a tremendous boon for the fragrance industry, but what — if anything — can luxury brands learn from them? Even though much of the information in the fragrances list was speculation, the virality of the list shows just how committed young Chinese are to their favorite young stars, and more importantly, to what they wear, buy, and now what they smell like.

Take Lu Han. Based on the list, the iconic 28-year-old singer and actor opts for Bulgari’s Eau Parfumée au Thé Bleu, while Cai Xu Kun, 20, of the boy band Nine Percent (and currently listed as the number one male celebrity influencer for 2018 by Tencent) supposedly likes the masculine top notes of Dior Sauvage. This is one interesting aspect of the list — the wide range of brands included from Chanel, Dior, and Jo Malone to niche brands like Creed, Diptyque, John Varados, and Tom Ford. These choices reveal a deep change in the fragrance habits of young Chinese consumers, who are now electing to set their own generational benchmarks and no longer simply following popular Western trends and rankings.

Another takeaway — beyond a strong interest in what Chinese male idols smell like these days — is just how influential these top stars are. “At first I hadn’t seen the post,” said Dexter, a 21-year-old student, “but reflecting on it, I would like to try the Tom Ford one used by Jackson Wang. I have been fascinated by this brand for a long time, and Jackson Wang is one of my favorite stars in China.” And the data is there to prove this. Tmall, the popular online retail site, recently disclosed that sales of male fragrances have increased 55 percent between 2015 and 2017, and are only projected to increase.

Also worth noting is the disruption from niche brands, which are likely to keep well-established brands on their toes to hold market share. For instance, the list also mentions that the young idol, Zhu Yi Long, who ranks third on Tencent’s influencer list, and the hip Korean rapper G-Dragon take a more individual approach, using Louis Vuitton Le jour se léve and Frédéric Malle’s Musc Ravageur Eau De Parfum respectively. This trend of experimentation, of veering away from the safe, trendy, or well-known fragrances isn’t something just young Chinese celebrities are starting to do — the throngs of Chinese consumers, both male and female — who admire them are starting to follow their lead.

The popularity of these two posts was an eye opener for fragrance brands. Not only did they show how much traction male celebrities have with their fans, they also showed the increasing demand young Chinese males have for purchasing fragrances. It’s now up to the brands to capitalize on this rapidly growing segment, that is, if they’re smart in their approach and can connect with them in an authentic way. “The list is interesting but how do we know if these superstars truly love the fragrance or wear it only for commercial reasons,” said Eager, 22. “But it does feel good knowing that some superstars have a common taste with me. And I’d like to see more private testimonials about why they truly love the fragrances.”





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