The Most Discussed ‘It’ Fashion Items for China’s Youth in 2018


“Alcohol god bag,” “hobo bag,” and “socks shoes”… Those are a few of the luxury items that were most discussed by Chinese youth on the internet in 2018, but their real names are Gucci’s Dionysus, Chanel’s Gabrielle, and Balenciaga’s speed socks. It’s quite common for Chinese netizens to grant new names to their favorite, most-hyped products as they sell like mad. But industry insiders question how long these “it” items can stay hot and how much brands can rely on sales of trending luxuries.

In June, Weibo’s marketing research institute published a luxury industry white paper generated from data from over 1000 consumers on the platform. The report was created as a guide for brands to navigate top fashions with young Chinese consumers and better understand the hottest-selling items, categories, and brands from 2018. It also explained behavioral differences between Chinese post-80s, -90s, and -00s luxury consumers.

We found that even though ready-to-wear and bags were the most discussed categories on Weibo, fashion brand trends have shifted away from creating one-off items in bags and shoes and more towards the development of full categories, with more attention being placed on jewelry and watches.

The younger and older crowds showed significant differences in the type of items they preferred as well as their motivations for buying them. For example, Chinese post-80s consumers were more interested in the product itself, prioritizing quality and design, while post-90s and -00s consumers preferred to discuss the context of the product and where they can wear it — in other words, they placed more value on intangible experiences and the social meaning behind their purchases. Below we break down these preferences by category:

Most discussed luxury bag brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed luxury bag brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Bags

All consumers demonstrated relatively mature tastes here, and they were familiar with the vocabulary of “it” bags for each brand. The winner was the Gucci Dionysus bag (酒神包), which ranked in the top 3 for all three age groups in 2018. The second-most discussed bag was Chanel’s Gabrielle (流浪包), followed by the Hermès Birkin (铂金包), and Louis Vuitton’s Pochette Metis(邮差包). The rankings also hinted at the fashion life cycle of these “it” bags. For example, Dior’s Saddle Bag (马鞍包) was the no.10 most-discussed bag among post-90s buyers in 2018. This is quite good considering the brand’s creative director Maria Grazia Chiuri just launched the collection in July 2018. But, meanwhile, Fendi’s peekaboo bag dropped out of the top-10 ranking in 2018, which could mean that people were losing interest in this collection which first hit the runway 10 years ago.

In general, people liked to discuss the style of the bags, though topics like packaging also saw a significant jump from the previous year. For bags, post-80s consumers liked to look at the style, materials, and the hardware (handle, buckle, zipper) of the bag. They also often focused on classic styles and looked for toned-down colors, whereas post-90s and -00s consumers liked vibrant colors and wanted a bag that made sense in a social context, whether it was a laptop bag for work, a backpack for travel, or a crossbody bag for celebrating a birthday. Post-90s consumers were more easily influenced by limited-edition and trend-based styles.

Most discussed ready-to-wear luxury brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed ready-to-wear luxury brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Ready-to-wear

Different from the handbag market, the ready-to-wear category is dominated by big name brands like LV and Gucci, thanks to their frequent collaborations with artists and streetwear companies, such as the LV x Supreme and the Gucci x Coco Capitán pairings.

Large scale exhibition like Louis Vitton’s VVV and Gucci’s The Artist is Present at the Yuz Museum in Shanghai were effective strategies that proved to be topical and buzz-worthy among younger people on Weibo.

One interesting trend is that post-90s and -00s consumers speak more frequently about higher-end product lines, such as couture and pan suits and coats, giving brands great potential to further educate those up-and-coming luxury consumers. Streaming fashion shows could be the right channel for this, as Louis Vuitton and Chanel are currently the top most discussed fashion shows on Weibo.

Most discussed jewelry luxury brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed luxury jewelry brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Jewelry

Chanel’s fine jewelry line coco crush is the only branded item that made to the top of most discussed jewelry list. While post-80s consumers bought to please themselves with styles they liked, post-90s and -00s buyers preferred to discuss where to wear these items, largely focusing on jewelry as a gift to please others. There was also an obvious trend toward discussing jewelry brands by season, and conversations were heavily clustered within the spring and summer.

Most discussed jewelry luxury brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed luxury watch brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Watch

Since 2017, Cartier, Chanel, and Chopard increased the exposure of their fashion watches on Weibo. Watches like Chanel’s J12, Codecoco, Piaget’s Altiplano, and LV’s Tambour Horizon were being promoted and had attracted attention from female fans. The post-80s male demographic discussed watches the most and spoke more about function than style. Post-80s consumers like to get technical — they know what they’re looking for from a product. On the other hand, post-90s and 00s consumers were more interested in the style of a watch and the branding story behind it.

Most discussed luxury shoe brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed luxury shoe brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Shoes

Sneakers are already at the forefront of luxury footwear nowadays, and shoes nicknamed “little white sneakers” (小白鞋) still sit at the top of the list. After that, loafers (乐福鞋), Tod’s Gomminos (豆豆鞋), sock shoes (袜靴), and “daddy shoes” (老爹鞋) were trending among post-00s buyers in 2018. Post-90s consumers were likely to be attracted by the latest and limited-edition footwear, and the most discussed products include LV’s Trainers and Arclights and Gucci’s Aces and Rhytons. Luxury brands’ collaborations with sportswear companies helped expand their audiences, namely the LV x Supreme x Nike Air Max, the Gucci x Adidas, the Hermes x Nike Air Force, and the Chanel x Adidas Hu NMD collaborations.





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The Most Discussed ‘It’ Fashion Items for China’s Youth in 2018


“Alcohol god bag,” “hobo bag,” and “socks shoes”… Those are a few of the luxury items that were most discussed by Chinese youth on the internet in 2018, but their real names are Gucci’s Dionysus, Chanel’s Gabrielle, and Balenciaga’s speed socks. It’s quite common for Chinese netizens to grant new names to their favorite, most-hyped products as they sell like mad. But industry insiders question how long these “it” items can stay hot and how much brands can rely on sales of trending luxuries.

In June, Weibo’s marketing research institute published a luxury industry white paper generated from data from over 1000 consumers on the platform. The report was created as a guide for brands to navigate top fashions with young Chinese consumers and better understand the hottest-selling items, categories, and brands from 2018. It also explained behavioral differences between Chinese post-80s, -90s, and -00s luxury consumers.

We found that even though ready-to-wear and bags were the most discussed categories on Weibo, fashion brand trends have shifted away from creating one-off items in bags and shoes and more towards the development of full categories, with more attention being placed on jewelry and watches.

The younger and older crowds showed significant differences in the type of items they preferred as well as their motivations for buying them. For example, Chinese post-80s consumers were more interested in the product itself, prioritizing quality and design, while post-90s and -00s consumers preferred to discuss the context of the product and where they can wear it — in other words, they placed more value on intangible experiences and the social meaning behind their purchases. Below we break down these preferences by category:

Most discussed luxury bag brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed luxury bag brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Bags

All consumers demonstrated relatively mature tastes here, and they were familiar with the vocabulary of “it” bags for each brand. The winner was the Gucci Dionysus bag (酒神包), which ranked in the top 3 for all three age groups in 2018. The second-most discussed bag was Chanel’s Gabrielle (流浪包), followed by the Hermès Birkin (铂金包), and Louis Vuitton’s Pochette Metis(邮差包). The rankings also hinted at the fashion life cycle of these “it” bags. For example, Dior’s Saddle Bag (马鞍包) was the no.10 most-discussed bag among post-90s buyers in 2018. This is quite good considering the brand’s creative director Maria Grazia Chiuri just launched the collection in July 2018. But, meanwhile, Fendi’s peekaboo bag dropped out of the top-10 ranking in 2018, which could mean that people were losing interest in this collection which first hit the runway 10 years ago.

In general, people liked to discuss the style of the bags, though topics like packaging also saw a significant jump from the previous year. For bags, post-80s consumers liked to look at the style, materials, and the hardware (handle, buckle, zipper) of the bag. They also often focused on classic styles and looked for toned-down colors, whereas post-90s and -00s consumers liked vibrant colors and wanted a bag that made sense in a social context, whether it was a laptop bag for work, a backpack for travel, or a crossbody bag for celebrating a birthday. Post-90s consumers were more easily influenced by limited-edition and trend-based styles.

Most discussed ready-to-wear luxury brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed ready-to-wear luxury brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Ready-to-wear

Different from the handbag market, the ready-to-wear category is dominated by big name brands like LV and Gucci, thanks to their frequent collaborations with artists and streetwear companies, such as the LV x Supreme and the Gucci x Coco Capitán pairings.

Large scale exhibition like Louis Vitton’s VVV and Gucci’s The Artist is Present at the Yuz Museum in Shanghai were effective strategies that proved to be topical and buzz-worthy among younger people on Weibo.

One interesting trend is that post-90s and -00s consumers speak more frequently about higher-end product lines, such as couture and pan suits and coats, giving brands great potential to further educate those up-and-coming luxury consumers. Streaming fashion shows could be the right channel for this, as Louis Vuitton and Chanel are currently the top most discussed fashion shows on Weibo.

Most discussed jewelry luxury brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed luxury jewelry brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Jewelry

Chanel’s fine jewelry line coco crush is the only branded item that made to the top of most discussed jewelry list. While post-80s consumers bought to please themselves with styles they liked, post-90s and -00s buyers preferred to discuss where to wear these items, largely focusing on jewelry as a gift to please others. There was also an obvious trend toward discussing jewelry brands by season, and conversations were heavily clustered within the spring and summer.

Most discussed jewelry luxury brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed luxury watch brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Watch

Since 2017, Cartier, Chanel, and Chopard increased the exposure of their fashion watches on Weibo. Watches like Chanel’s J12, Codecoco, Piaget’s Altiplano, and LV’s Tambour Horizon were being promoted and had attracted attention from female fans. The post-80s male demographic discussed watches the most and spoke more about function than style. Post-80s consumers like to get technical — they know what they’re looking for from a product. On the other hand, post-90s and 00s consumers were more interested in the style of a watch and the branding story behind it.

Most discussed luxury shoe brands (changes in discussion volume from 2018 to 2017 vs. discussion volume among the top 20 brands)

Most discussed luxury shoe brands (changes in discussion volume from 2017 to 2018 vs. discussion volume among the top 20 brands)

Shoes

Sneakers are already at the forefront of luxury footwear nowadays, and shoes nicknamed “little white sneakers” (小白鞋) still sit at the top of the list. After that, loafers (乐福鞋), Tod’s Gomminos (豆豆鞋), sock shoes (袜靴), and “daddy shoes” (老爹鞋) were trending among post-00s buyers in 2018. Post-90s consumers were likely to be attracted by the latest and limited-edition footwear, and the most discussed products include LV’s Trainers and Arclights and Gucci’s Aces and Rhytons. Luxury brands’ collaborations with sportswear companies helped expand their audiences, namely the LV x Supreme x Nike Air Max, the Gucci x Adidas, the Hermes x Nike Air Force, and the Chanel x Adidas Hu NMD collaborations.





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Concierge Clubs Win Big in China


Concierge businesses are lifestyle clubs that manage the private errands of their customers and meet the most exclusive requests. These clubs appeared in the US in the 1990s, later being successfully exported to the EU. Because of an extended period of growth in various financial hubs in Asia, the Middle East, and Latin America, various concierge clubs took their businesses globally, expanding into emerging markets. Having now an international clientele made of affluent consumers, clubs like Quintessentially Group and John Paul propelled growth in the industry.

China’s economic ascent has established a powerful social group made of young entrepreneurs who amassed their own resources rather than building on a massive generational wealth transfer. As expected, the rise of the nouveau riche class presented an opportunity for concierge clubs. Seeing that these luxury consumers didn’t understand the benefits that come with their wealth and were not familiar with premium services, concierge clubs hijacked the Chinese market. Progressively, the number of prosperous individuals who used concierge services increased until it created a booming industry.

Jean-Marc Jacot, the former CEO of Parmigiani Fleurier, told the Reuters Global Luxury Summit that “Luxury is not material,” while Steve Sadove, the former CEO of Saks Incorporated sees time as the ultimate luxury. Affluent shoppers from China are not different. In an ambitious society like modern China where the 12- hour, six-day-a-week work schedule is not uncommon, time is a luxury commodity. Insert here concierge clubs specialized in maximizing the clientele’s free time and you will have the recipe for success. Concierge businesses brought to the demanding Chinese consumer spare time — the only commodity that the elite still couldn’t gain. And in a competitive market as the luxury industry, businesses know it pays to differentiate, thus concierge clubs proposed not only impeccable services and expertise in lifestyle, but they also gave precedence to trust and confidentiality. This made concierge businesses a decisive force in the ever-expanding Chinese luxury culture.

If the initial requests were related to travel (hotel and private villas bookings, reservations at Michelin 3- star restaurants, and tickets for international events), nowadays, clubs handle everything, from mundane tasks such as finding babysitters and private tutors for kids to outrageous requests that seem to involve utterly expensive wedding proposals and unique shopping sprees.

According to China Daily, British concierge club Quintessentially notes that beyond the typical requests such as recommendations, bookings, and product research, members often have demands related to education, wellness, and philanthropy.

Considering that China’s re-emergence as a world power is unstoppable and the number of well-off individuals is rapidly climbing, concierge clubs have the unique opportunity to earn robust returns.

The intelligence and data company Wealth- X estimates that soon, China will host 32 of the world’s 40 high net worth cities increasing the number of high-net-worth individuals.

And despite China’s positive outlook, concierge clubs need to expect a series of challenges. The most significant provocation comes straight from the Chinese consumer who is more demanding and better informed than his Western counterpart, bringing an unprecedented focus on value and return of investment.

Despite risks and barriers to market entry, global leaders like Quintessentially and John Paul flourished in China, pioneering services competitors soon copied. Today, various businesses have come up with personalized concierge services. From real estate developers who offer a broad range of in-house services to members-only concierge clubs who cater to the needs of the uber-rich, China’s fast-growing concierge market is constantly expanding.

Quintessentially and John Paul are the global concierge leaders, serving a growing number of excessively wealthy clients. Unsurprisingly, these luxury lifestyle groups understand the Chinese consumer’s need for authenticity.

Quintessentially is a British luxury lifestyle group founded in 2000, in London. Today, it has over 60 offices worldwide and a decade of experience in China. The global concierge club is world-renowned for building exceptional brand identity by leveraging the holistic multichannel approach and prioritizing communication consistency. Seeing that we live in a demanding world, where millennials and Generation Z place adequate importance on social media platforms, while mature consumers require superior customer service without the hassle of digital connectivity, Quintessentially bridged the gap between online and offline, meeting specific target audiences in their natural habitat.

Kaimin Li, the newly appointed CEO of Quintessentially China & Macau is a trilingual (Chinese, French, and English) leader from the private aviation sector who traveled to over 100 countries in the past decade, and who believes that “Quintessentially has been fortunate to play a major role in the expanding private club space.” He told Jing Daily that a decade ago when the brand was inaugurated in China, “private clubs were mostly a closed-door mystique badge usually associated with property developments,” but private clubs are reemerging.

Today “the private clubs are rich in content, promoting opinion leadership and work collaboratively with each other,” said Kaimin Li. According to him, Quintessentially has “the advantage of a global network.” Li says that through the Quintessential membership, associates have access and exposure “to key sectors such as Art & Culture, Bespoke Travel, Overseas Education, and Passion Investment opportunities.” And this accessibility offers leverage that is difficulty ignored by the upper-class. Andrew Quake, CEO Asia- Pacific for John Paul also understands the Chinese market and the demands of the growing elite class. Quake told Jing Daily that, “Clients in China today are a lot more discerning in their travel and lifestyle needs and are amongst the most digitally savvy people in the world.” Quake acknowledges that these market changes are beneficial for John Paul. Through an “extensive partnership network of over 10 000 partners globally,” John Paul guarantees that every customer will enjoy a reputable experience. By exceeding expectations and expecting personal passions, John Paul has built a brand focused on customized advantages.

“China is a key market globally for John Paul,” Quake said. “We have seen significant growth in our business in China–our team staff strength grew by 40 percent in the last 12 months.” But global players like Quintessentially and John Paul are not the only ones wanting to receive a piece of the highly lucrative Chinese pie. These days, most shopping malls, high-end hotels, and real estate developments come with concierge services. And as time has become life’s most high-priced commodity, it’s safe to say that the super-rich learned that delegation is a critical skill. In exchange for a hefty sum, these clients expect to receive personal help, discretion, and leisure time.





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Luisa Via Roma’s CEO on Navigating China’s Luxury Market


Andrea Panconesi, CEO of the Florentine luxury retail behemoth Luisa Via Roma, is in the process of writing a new chapter in the company’s 90-year-old history.

After reporting impressive sales of $146.7 million (130 million euros) last year, Panconesi has spearheaded a few new projects since the beginning of 2019 that should further expand Luisa Via Roma’s influence and footprint across the globe. Those plans include an unprecedented runway fashion show set in the center of Florence (perhaps the first in the history of fashion), a disruptive retail store concept, and a strategic partnership with the Chinese e-commerce giant Secoo that will help facilitate the company’s expansion into China’s luxury market.

On June 13, the hottest names in fashion — including Virgil Abloh, the Hadid sisters, and Ju Xiaowen — gathered in Florence to celebrate Luisa Via Roma’s 90th anniversary and view a catwalk show featuring 80 different luxury brands. Over 5,000 distinguished attendees flew in from all corners of the world to show their support for Panconesi, most of whom were acclaimed designers, celebrities, influencers, and members of the press, and the extraordinary event quickly became an online sensation for the brand.

Ahead of the event, Jing Daily sat down with Panconesi at the Palazzo Michelangelo to learn more about the inspiration for the show, Panconesi’s business philosophy, and Luisa Via Roma’s plans for retail innovation and expansion in China.

Where it all began

The star-studded runway show is a tribute to Luisa Via Roma, but it’s also a tribute to the roots of contemporary fashion. As the grandson of Luisa Jaquin, the original founder and spiritual essence of Luisa Via Roma, Panconesi said he became involved in the family business in the early 1960s and was lucky enough to witness the evolution of contemporary fashion in Florence as the company grew. “The runway show is like a Broadway performance,” Panconesi said. “I wanted to give recognition to Florence being the home of our brand and being the place where everything started. And it created a reason for young people from across the world to visit Florence and to be creative here again.”

A bright future

Luisa Via Roma’s collaboration with Secoo gives the brand a chance to grow in a market where it’s impossible to grow on your own. “I’m very glad and very proud to have reached this partnership because it is a part of our strategy to grow in the future,” Panconesi said of the company’s breaking into China. As of now, the Chinese market represents only 15 percent of Luisa Via Roma’s total business, “which is very small,” Panconesi acknowledged. However, entering the world’s largest luxury market requires specific know-how and expertise. That’s why Panconesi would rather do it with a trusted partner that already has this knowledge, yet one that will allow the brand to hold onto its independence, DNA, and integrity.

On June 17, a Luisa Via Roma webpage teaser went live on Secoo, introducing the brand to the platform’s 27 million users, according to a Secoo spokesperson. On the launch date, Luisa Via Roma’s official store was featured at a prime position on the Secoo site, and during the 618 shopping festival period, Secoo provided added traffic and exposure to Luisa Via Roma with banner advertisements that introduced the company and recommended some of its fashions to Secoo VIP consumers.

A new kind of store

Known as one of the first luxury businesses to adopt e-commerce strategies (the company went online in 1999 when Google was still in its beta phase), Panconesi is nonetheless a fervent believer in experimenting with brick-and-mortar stores, stating that “98 percent of the business is online now, but this two percent is much more valuable [to me], because it represents our DNA.”

In fact, while in Florence, he introduced plans for his new type of retail store — one he said had never existed before. “I want to create a place where the young generation aggregates together with peers and also with older generations,” he explained. “I believe in the integration of different generations because I think old people can guide young people. It’s not primarily going to be a commercial place. It’s where people can work together, experience, and meet each other.”





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The Lipstick Met Museum Designed for China’s Gen Z


This post originally appeared on Jing Travel, the Business of Chinese Cultural Tourism, our sister site. 

Drawing inspiration from its collection of royal portraits, the Metropolitan Museum of Art (MET) has partnered with the fashionable Chinese cosmetics brand Perfect Diary to release a limited-edition collection of eight lipsticks. The items went online in the run-up to JD’s 618 shopping holiday and are the latest in a series of cultural consumer products born from collaborations between museums and brands specifically for young Chinese consumers (the demographic largely responsible for driving the trend).

Packaged in sleek playing-card-style boxes with one of the eight royal portraits on the cover (some popular choices include Napoleon I, Queen Victoria and Louis XIV), the lipsticks are available on JD and the WeChat e-commerce platform Youzan. Consumers can choose to purchase a single lipstick at $14.50 or a box set of four at $45.

Perfect Diary, a brand founded in 2016 that is aimed at China’s Gen Zers, labeled the series Little Diamond on account of the glitter included in each product. Lipsticks draw their color palette from a feature of the chosen MET portrait and cover a range of quirky hues including milk tea, carrot, and red velvet.

One strong product detail is that each individual lipstick has the relevant royal bust embossed on the casing’s lid. This attention to detail and the affordable price point has seen the collaborative product receive generally positive reviews from online consumers. “The color looks good and the packaging is also good-looking,” writes one consumer in the comment section on the e-commerce platform Tmall. “There is a retro feel to the product. It also includes a souvenir similar to a playing card. However, the texture is a little too dry.”

C-pop star Zhu Zhengting is the face of the Little Diamond promotional campaign, which sought to build off the theme of this past May’s Met Gala, “Camp: Notes on Fashion,” as a way to elevate it to royal status. Perfect Diary photographed The Nine Percent singer in a range of playful guises, each complementing individual lipsticks in both tenor and tone.

The MET follows on the heels of London’s British Museum and the V&A Museum in monetizing its IP by creating products aimed at Chinese consumers. Since the storied New York institution partnered with China IP product experts Alfilo Brands earlier this year, we’re sure to see more products along the lines of the Perfect Diary collaboration in the future.





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80 Percent Impulsive Shopping Comes from Social Commerce


It’s clear that traditional e-commerce can no longer satisfy customers, at least not in China. The current norm of online shopping is all about human interaction: having friends, family, influencers have taken the place of trusted in-store sales associates to help customers weed out advertising noise and give personalized suggestions for faster and more effective checkouts.

The story of Pinduoduo, a mini-program that can be viewed as a marriage of Facebook and Groupon, is a good example of how successful the new concept of social commerce is becoming. The platform was built in 2015 on WeChat and follows a “the more people buy the cheaper the price” model. It was an instant success among Chinese budget shoppers, with a market valuation that jumped 10 times in one year and reached $15 billion by April 2018. And, shockingly, it’s now set to overtake the second largest e-commerce platform JD.com in gross merchandise volume by 2021, as projected by the investment bank UBS group. Even though Pinduoduo serves value-conscious consumers in underserved cities—a somewhat different demographic than the luxury market—it continues to prove the power of WeChat traffic as well as the growing popularity of social commerce.

In its latest social commerce report, the market research company Nielsen predicted even more of this growth. “In the past five years, the annual compound growth rate of social commerce has reached 100.6%, and its penetration rate has increased from 2% in 2013 to 11.9% at present and will continue to grow at a faster rate in the future,” says Tommy Hong, VP of E-commerce in Nielsen China.

The reported was generated based on interviews from 3,531 online shoppers over the past 12 months. Below are two key findings brands should be aware of:

80 percent of impulsive shopping comes from social commerce

The “social network” effect seems to offer powerful leverage for making shopping decisions. In the report, 54 percent of interviewees said they increased expenses in unplanned shopping in the past year, 80 percent of which said social recommendations like friends’ suggestions, WeChat groups, or content platforms were major channels that stimulated those impulse purchases.

First-tier cities and lower-tier cities have different social influences

For brands planning their social commerce budgets, they should be aware of the different preferences for first-tier and lower-tier cities, so as to match their targeted audience. People from first-tier cities are more likely to form their own social circle based on common interests and rely on influencer or KOL reviews. This is because their social circle is more diverse and their shopping choices are broader. But people in lower-tier cities rely on their acquaintances for a sense of trust when shopping online.

Social commerce may be the gateway for brands to access specific demographics, but the customer’s intent to purchase on the platform isn’t always as strong, so brands should plan their e-commerce mix wisely. Understand what the various sites contribute to in terms of inspiring, validating, or completing purchases.





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Big Data: The Vital Tool for Luxury Brands in China


For the second year in a row, China’s luxury market has seen robust growth powered by digital transformation and a tailored approach to customer service — strategies that heritage brands like Gucci, Burberry, and Christian Dior have used with immense success. As commerce and the consumer preferences of Chinese luxury shoppers continues to evolve, luxury brands need to stay agile if they intend to maintain prime positioning on the Chinese market — that’s where big data comes in.

In a country that boasts the most advanced digital platforms where young, upwardly mobile consumers are socially connected, online shopping still didn’t reach its full potential. According to the consulting group McKinsey, “only 7 percent of Chinese luxury sales occur in official online channels.” Still, McKinsey also stated that, “as luxury brands further develop O2O initiatives that bridge the online and offline worlds to create a seamless experience, it is likely that more luxury sales will be conducted online.”

Even though young consumers demand full digital transformation, they still need the store-based retail experience. And despite the high digital connectivity rate, Chinese consumers still demand premium engagement with brands in physical retail stores. Understanding the shopping habits of these young consumers (millennials and Generation Zers) and meeting them in their habitat has become crucial for brand survival.

According to Deloitte’s Global Powers of Luxury Goods 2018 report, “Collectively millennials and Generation Z will represent more than 40 percent of the overall luxury goods market by 2025, compared with around 30 percent in 2016.” As millennials and Gen Zers further drive sales in the luxury market, brands will become more and more preoccupied with understanding these consumers and their shopping habits. But these mobile shoppers are constantly exposed to an unlimited amount of data and filtering through so much information and managing significant facts becomes a laborious process. Due to information overload, these consumers are becoming more selective and adjusting their shopping behaviors accordingly.

At this point, big data comes in handy as it benefits brands who want to deliver personalized content by subdividing consumers based on their purchasing habits and engagement. According to Luxe Magazine, “85% of luxury brands sales come from customers registered in the database,” and despite that encouraging rate, traditional luxury companies have been maddeningly slow to embrace big data.

Heritage brands have a clear advantage over their competitors because they receive important information during the course of their interactions with customers, but far too often they under-use this data. Through customer segmentation and the analysis of behavioral data, luxury brands can use a more targeted approach in their interactions with customers, and this will again translate to higher sales. Furthermore, through the use of social data, luxury brands can further enhance their storytelling capacity to appeal more to their target audience.

Burberry is the archetype for success stories when it comes to embracing big data and using it to create a competitive edge. Since 2006, the British company has reinvented itself as an “end to end” digital enterprise by using consumer behavior analytics to better understand the purchasing habits of shoppers and to run targeted marketing campaigns. According to Socialwall, Burberry assigns over 60% of its advertising budget to social media platforms. This transformed the company into a digital colonizer leading the way in avant-garde digital experiences. The brand was also one of the initial luxury companies to adopt a complex omnichannel model, which helped to create a cohesive customer experience. Burberry collects data from customers through social media platforms and implements this data in their digital and non-digital marketing campaigns.

Burberry’s successful Customer 360 program is also highly data-driven. While using the program, customers agree to share their style preferences, shopping aversions, and purchasing history with Burberry. Sales associates can access the data through tablets, analyze the information in real time, and offer customers personalized shopping experiences. Meanwhile, the brand’s Art of the Trench campaign has reinvented Burberry, turning it into a luxury brand that belongs to a wider and more globalized community. By making the brand more accessible, Burberry has added innovation to the DNA of a traditional business model — and that has also helped them enhance their customer experience. Through The Art of the Trench, Burberry fans can share their style hacks (when it comes to dressing the Burberry trench up or down) with a wider audience, and this again generates buzz for the brand.

Dior is another example of a heritage brand that uses a holistic approach to customer experience. Thanks to data harvesting, Dior has officially become the most relevant luxury brand among Generation Z consumers. By integrating the data available on social media platforms, Dior has created some outstanding marketing campaigns in the country. The brand’s success was on display in China during its Customized Lady Dior Small handbag campaign. Between August 1 and August 4, 2016, Dior offered the handbag for sale for $4,047 (28,000 RMB) on WeChat. They sold all 200 bags within 36 hours. This success story demonstrates how brands can use customer behavior analytics to increase revenue and customer engagement.

While heritage brands like Burberry and Dior are reinventing their appeal with data-driven personalization, others who didn’t get on the big data wagon are now bleeding market share. Interestingly enough, the luxury brands that fell behind don’t understand that they own a big advantage over fast-fashion and affordable luxury brands in the form of the data they’ve collected from their shoppers. But unfortunately, not all brands know how to leverage data and turn it into actionable insights.

But luxury brands that collect data through social media channels and customer feedback must also understand that online security is absolutely crucial for their success. Any cyber attack can put the corporate reputation at serious risk and threaten the brand’s market value; thus cyber security is as important to a business as strategy or branding. Protection against information leakage, data breaches, and cyber attacks are vital, so companies need to invest in internal encryption, strict controls, security training, and audits. Understanding the power of big data is the first step toward successful data management.

According to an editorial from the Economist, data has surpassed oil as the world’s most valuable commodity, and China is the place where we can see the full power of analytics take shape. In a country that boasts 802 million internet users and 673.5 million people using social media platforms, e-commerce websites like Alibaba and JD.com have made data and analytics their key focal points for winning legions of fans.

China’s Singles’ Day set a record of $30.8 billion in sales in 24 hours in 2018, and big data and social media were crucial in achieving this huge triumph. China molds e-commerce and social media into a social shopping experience that gives consumers the ability to shop directly via their own social network. Chinese brands and e-commerce players understand, much more than outsiders, how achieving a cohesive customer experience requires data insights into customer’s lives.

For global players like Alibaba or JD.com, customers are not one-dimensional. Because of this, marketing strategies shouldn’t be either. Thanks to big data, Chinese companies understand that customers change their idiosyncrasies during their lifetime, so they use statistical techniques and data — updated regularly — to forecast important shopping behaviors. Soon, only the luxury brands that tailor their approaches based on customer behavior patterns will survive. And in a country like China where online retail sales reached about $1.33 trillion in 2018, the use of big data should be considered indispensable for Western luxury brands.





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Dolce & Gabbana Falls 140 Places in Asia’s Top 1000 Brand Ranking


Luxury fashion brand Dolce & Gabbana fell 140 places in this year’s Asia’s Top 1000 Brands ranking.

The drop, from position 360 last year to 500 this year, which is one of the biggest falls overall in the 2019 list, suggests a shift in Asian consumers’ sentiments about the brand, possibly not surprising considering its China faux pas last year.

Even as recently as March this year, D&G was still reported to be suffering from the backlash to a November marketing video released in the mainland, which was deemed “racist” and was followed up by an outpouring of insults against the Chinese by founder Stefano Gabbana on social media.

Both Gabbana and Domenico Dolce released an apology video in Chinese on Weibo, but this appeared to do little to mitigate the damage.

The brand didn’t show up at the usual fashion weeks, and it still isn’t featured on Alibaba’s Tmall, JD.com or Lane Crawford. Even the model who was featured in the offending video said afterward that the response to it “practically ruined” her career.

It may be two or three years before the brand can reset its China strategy, Terence Chu suggested in an exclusive interview with Campaign Asia-Pacific in January. The founder of the experiential agency Apax Group, which helped organize D&G’s ‘Great Show’ fashion project, which had to be canceled following the outcry in China, said the message to be learned from the controversy was that “no matter where we come from, the world is getting smaller.”

Asia’s Top 1000 Brand ranking provides concrete evidence of D&G’s recent fall from grace. The brand dropped four places in the overall luxury category, to 19th position this year, and also lost positioning in the luxury category in 12 out of 14 Asia Pacific markets, with the two exclusions being the Philippines, where it remained in the same position as in 2018 (13th), and Indonesia, where the brand managed a six-point rise from 15th to ninth place.

In China, which ranks its top three luxury brands like Chanel, Hermès, and Louis Vuitton, D&G lost three spots, falling from 17th to 14th place. In Hong Kong the drop was even greater; the brand sank 10 whole places from 12th to 22nd.

Can the brand recover next year? It will depend on consumers’ memories—and D&G’s ability to prove it has a firmer, more sensitive grasp of local sentiments.

This post originally appeared on Campaign Asia, our content share site.





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BCG x Tencent: What’s New with China’s Luxury Spending?


With a large pool of luxury players currently diving into China’s market, the country has become one of the most competitive business environments in the entire industry. The intensified competition requires brands to stay abreast of quickly-evolving Chinese shopping behaviors if they want to win the market’s daily battles — and, ideally, the long-term war.

Following its inaugural collaborative luxury report with Boston Consulting Group (BCG) last year, Tencent Marketing Solutions released its latest edition on June 18, titled “Tencent x BCG 2019 China True-Luxury Playbook” at the 66th annual Cannes Lions Festival of Creativity on the French Riviera.

The report notes China’s luxury market reached $123 billion (110 billion euros) in 2018, growing by six percent from the prior year. It also predicts that the country will contribute 41 percent of global luxury consumption by 2025 — a big jump up from 33 percent in 2018. This monumental growth will be super-powered by the next generations of customers in China: Millennials and Gen Zers. “Luxury consumers [in China] are very young,” says Nicolas de Bellefonds, partner and managing director at BCG France. “48 percent of them are aged under 30 but contribute to 42 percent of luxury sales.” These young customers are currently buying big on ready-to-wear apparel, accessories, and shoes, but have yet to develop the same level of sophistication as their predecessors on handbags, watches, and jewelry purchases.

Below, Jing Daily sums up five surprising findings from the report to help brands understand the nuances of luxury shoppers in China:

Tencent x BCG

1. WeChat remains the most-used social media app during discovery and research, followed by Weibo and Little Red Book

The report says Tencent’s social media platform WeChat remains the uncontested No.1 platform for consumers to discover and research luxury brands and goods. 52 percent of surveyed respondents said the WeChat ecosystem triggered their interests in a luxury product, followed by Weibo (28 percent), Little Red Book (19 percent), short videos (seven percent), and then others. Kiki Fan, General Manager of Sales and Operations of Key Accounts, Tencent Marketing Solutions, said the company offers a holistic ecosystem that assists luxury brands in acquiring customers, monetizing social traffic, and managing the customer relationship.

2. Word-of-mouth (WOM) marketing is gaining significance

Secondly, the importance of online WOM marketing — including friends’ moment ads/chats, communication with sales assistants and customer service — saw a significant rise from 2018 to 2019, the report notes. BCG’s de Bellefonds pointed out that this change was particularly worth noting for brands, as “in the past, it was more on influencers/key opinion leaders [to serve as the key touchpoint for consumer discovery], but now more and more consumers are trusting each other.”

3. “Research online, purchase offline (ROPO)” demand surges

“Research online, purchase offline” retail behaviors rule the Chinese market, the report finds. As it has already been a salient characteristic of Chinese shoppers as noted in the 2018 Tencent x BCG report, the demand this year rose from last year by over 20 percent to 82 percent, which is roughly 30 percent higher than the global average. Meanwhile, even overseas luxury consumption by Chinese nationals is highly influenced by domestic online touch points before purchase, the report says. This finding once again indicates the necessity for luxury brands to not only develop digital pathways but to also forms seamless online-to-offline strategies when targeting Chinese customers.

Tencent x BCG

4. An ever-fragmented Chinese influencer landscape that’s remarkably different from the West

The report further notes a hypercharged influencer market in China that Western luxury brands may be unfamiliar with — but one that is essential to comprehend. Normally, Western influencers can be categorized into three types: celebrities (A-list), mainstream fashion bloggers, and niche influencers. However, the variety of influencers in China is much more nuanced. There are product influencers, “sharenting” (shared parenting), fitness lovers, home décor lovers, food bloggers, artsy backpackers, etc., who also hold a large amount of power in influencing consumers’ shopping decisions and behaviors.

5. The top-50 Chinese cities generate over two-thirds of luxury consumption

China’s leading 50 cities hold 65 percent of luxury consumers and contribute over 70 percent of luxury sales, according to the report. Beijing, Shanghai, Guangzhou, and Shenzhen, which are defined as the top-tier cities by the report, spend an average of $14,557 (13,000 euros) on luxury goods-per-consumer, followed by 11 Tier-1 cities at around $13,437, 32 Tier-2 cities at about $12,317, and the rest of the Tier-3 cities at $10,076.

Tencent x BCG

Overall, developing digital sufficiency has become an indispensable part of luxury brands’ strategies in China. The report finds over 50 percent of surveyed respondents expect improvements in digital shopping experiences offered by brands at their offline stores. The ability for brands to enhance their digital intelligence will be crucial towards gaining traction in today’s crowded and cutthroat Chinese market.





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Xiaohongshu Dips Into the E-commerce Livestreaming


Leading Chinese social commerce app Xiaohongshu has quietly begun testing a new live streaming feature, becoming the latest platform to join the e-commerce live streaming trend. Many marketers have been expecting this move, as Xiaohongshu’s lead investor, Alibaba, is a leader in the space.

Over the past two years, e-commerce live streaming has become quite popular in China, particularly among consumers in 2nd tier cities and lower, because it creates a transparent and trustworthy e-commerce experience. Viewers are able to watch a live streaming host demonstrate a product and purchase said product while viewing the stream. When it comes to fashion items, streamers often act as stylists, teaching viewers how to wear the items. Viewers are able to directly ask questions about the product, thereby increasing their trust in the product and reducing the likelihood that the customer will be unsatisfied.

What we know so far

The feature is still in the early phases of beta testing and only select accounts are able to stream. So far it appears they are working with micro and mid-tier influencers. According to Chinese media outlets Ebrun and 36Kr, the first known stream on Xiaohongshu occurred on June 7. The broadcasters were the lower mid-tier fashion and lifestyle account @ariaandbrandon run by mixed-race couple Aria and Brandon with over 200k followers. Currently there is no playback feature and the couple did not publicly share the results of the stream. Then on June 11, micro-influencer Wanzi (@丸子), with approximately 100k followers, held an hour-long stream, which according to the screenshot she shared on her account, got a total of 2,233 views and 10.9k likes.

Xiaohongshu live-streaming

An example of Xiaohongshu e-commerce livestreaming

While only select accounts can stream, anyone can view the streams. Users can either discover the streams in their home page feed (an icon will appear in the top right corner of the image stating that the account is currently streaming) or, if they are following the influencer, they can enter by clicking the influencers homepage avatar.

Right now, the in-stream functions are very basic, and there is actually no e-commerce feature at the moment but considering Xiaohongshu is a social commerce platform, it is highly likely that they will be adding e-commerce functionality very soon.

Why it’s significant

Launched in 2016 Alibaba’s Taobao Livestreaming platform has been driving impressive sales results for brands on both Taobao and Tmall. Most recently, top Taobao live streamer Austin Li worked with Israeli cosmetics brand Ahava and sold out 14,000 mud masks in one minute.

Co-founder of the Xiaohongshu Agency Double V Consulting, Miro Li, shared, “Alibaba is a main investor in Xiaohongshu and appears to hold a significant amount of influence over the platform’s development. With the success that Alibaba is having with livestreaming, I’m not surprised that Xiaohongshu would want to follow a similar path. It also might help stimulate sales on the platform.”

And Alibaba is not the only one. E-commerce live streaming has become a main driver of sales for Chinese fast fashion social commerce platform Mogujie and not long ago WeChat began beta-testing their own live stream Mini Program linking Official Accounts with e-commerce Mini Programs. E-commerce live streaming could be a strong fit for Xiaohongshu as it falls in line with the type of content the platform is known for — authentic, honest product reviews and product recommendations.

While the feature has the potential to bring a lot of benefits to the Xiaohongshu ecosystem, it’s not a guaranteed win. Not all influencers are effective live streamers and Xiaohongshu will need to work to cultivate and attract the right talent, especially if they want the KOLs to drive sales.

Another major concern is whether or not KOLs will be limited to linking only to products available for sale on Xiaohongshu. If this is the case, which is likely based on current strict platform linking rules banning external links, it will be much harder for KOLs to drive sales as the product selection will be limited. Right now, many Xiaohongshu users will research products on the platform, and then turn to other platforms, such as Tmall and Taobao, to actually complete the purchase.

While it’s still very early on in the development stage, for brands using Xiaohongshu, this is an important feature to keep an eye on.





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