Gamification: the Future of Luxury Retail in China


A stroll in China’s urban streets and shopping malls today won’t be complete without seeing any form of arcade games. Once a popular phenomenon in Japan and Taiwan, arcade game installations in China today take a slightly different form by combining gaming with shopping — claw machines that contain luxury makeup as rewards, lipstick machines that sell the thrill of “$4.3 (30RMB) for nothing or a Dior lipstick,” and branded lucky box machines that give out random product samples have been ubiquitous across the country’s most crowded shopping hubs since the recent two years. Highly digitalized and constantly stimulated, Chinese millennials are living in an increasingly gamified retail environment both online and offline.

There are plenty of media headlines that address China’s advanced digital landscape and the importance of gamification in online marketing to Chinese millennials. But this recent phenomenon of arcade game luxury retail has proved that gamification is not only crucial online, but also offline. According to media site Jiemian, China’s arcade-game retail industry experienced a boom in the year 2017. In 2017, the number of claw machines in China reached 2 million, making up a 60 billion RMB (around 8.7 billion USD) market.

Little Red Book

As a part of “6.6 Shopping Festival” promotion, Little Red Book users often receive pop-up “surprise” boxes that contain shopping discounts catered to user’s interests. Photo: phone screenshot.

Chinese millennials have largely normalized gamification in everyday lives in a way that their western peers cannot imagine. This is a generation that buys Cartier jewelry from a WeChat mini-program game, $500 luxe facial creams from a pop-up discount while scrolling video feeds on Little Red Book, and Dior makeup from the brand’s “see now, buy now” live streaming. Gaming and the metrics of gamification are no longer a novelty, but the norm of their interactions with all kinds of interfaces. So far, forward-thinking international brands are already leveraging this generation’s love for both gaming and luxury shopping to enhance the overall brand experience. Here are three prominent examples:

 1. Lancôme’s CNY gift machines & Pop-Up

During the Chinese New Year period in 2018 and 2019, Lancôme put CNY-themed lucky gift machines in shopping centers across China’s top-tier cities. The machines had attracted long lines of trendy-looking youths to line up for the free gift and WeChat-ready photo crops. One would need to scan the QR Code on the machine, follow Lancôme’s official WeChat, and then receive a code via text in order to get a CNY-themed gift box containing various product samples.

In May 2019, Lancôme’s L’Absolu Mademoiselle pop-up in Beijing has again adopted the popular metric of arcade games. One of the pop-up’s main experiences is a virtual “claw machine” screen game, in which visitors use a remote control to pick up the red cherries icons on the screen to exchange for gift rewards.

Lancôme’s L'Absolu Mademoiselle Pop-Up in Beijing features a virtual “claw machine” screen game. Photo credit: Sina Fashion.

Lancôme’s L’Absolu Mademoiselle Pop-Up in Beijing features a virtual “claw machine” screen game. Photo: Sina Fashion.

2. Little Red Book’s Red Home

In June 2018, the lifestyle platform Little Red Book (A.k.a. “Xiaohongshu”) opened its first offline retail store in Shanghai. The platform’s offline store is a reflection of everything trending on its online version: WeChat-friendly photo booths, AI-powered makeup mirror, and a variety of Gashapon machines and claw machines. Visitors would need to first complete a series of tasks (such as uploading a long content feed to the platform) to win the gaming coins. The rewards range from Tom Ford lipsticks, Lego toys, to fluffy dolls, objects are most trending among the platform’s young, mostly female audience.

Coco Game Center’s pop-up stores across Asia’s fashion capitals featured driving games, claw machines, and twisted-egg machines. Photo: Sina Fashion

Coco Game Center’s pop-up stores across Asia’s fashion capitals featured driving games, claw machines, and twisted-egg machines. Photo: Sina Fashion

3. Chanel Game Center

In 2018, Chanel’s arcade pop-up “Coco Game Center,” traveled through Asia’s fashion capitals from Tokyo to Singapore to Hong Kong and Chengdu, marked one of the most shared pop-up experiences in Chinese social media. With a range of arcade activities like racing games, bubble games, and crane games, the pop-up allowed visitors dress in the brand’s classic Tweed to enjoy the thrill of picking up the latest makeup products from a claw machine. The event was a publicity success, too. On Little Red Book alone, over 2,920 user-generated notes were shared to broadcast the experience.

The psychological thrill that resembles gambling, and the amplifying effect of social media, emerged as the two most common reasons behind the arcade game’s massive popularity. To many Chinese arcade-game lovers, these arcade-shopping installations resemble a less risky form of gambling. Xuanxuan Liu, a 25-year-old graphic designer in Shenzhen, tells Jing Daily that these arcade games are a way of relief to her work life. “I often stop by the lipstick claw machine after working late night in the office. It is like gambling, but you end up winning makeup instead of money,” she said.

Besides the psychic thrill, social media amplifies the Chinese millennials’ fixation on arcade games. Camilla Qiu, a 22-year-old fashion design student in London, said, “I first got fascinated by these arcade shopping games by looking at Douyin (China’s viral video-sharing app) because it was a huge trend. Then I got very enticed to share the video of me playing it, too.” These arcade game’s “millennial pink,” fun outlook make them the perfect photo backdrop for China’s social-obsessed female audience, who find anything that strikes their “girly heart (少女心)” hard to resist.

For any brand that tries to resonate with millennial Chinese consumers, this arcade game trend has a broader implication: shopping is getting ever more performance-oriented, interactive, and technological in young China. Gamification isn’t a plus, but a 24/7 reality that they increasingly expect from brands. How international brands could adapt to this next-level gamified reality, still remains a question.





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The Next Growth Engine for Luxury? Gen Z: Bain & Co


Aside from macro-factors like the ongoing U.S.-China trade dispute and China’s economic slowdown, Chinese consumers remain the backbone of the global luxury industry. The country has contributed 18-20 percent of overall growth during 2019 so far, while other markets (except parts of Asia) have experienced no more than single-digit growth, according to the latest report from the global consultancy Bain & Company that was published this Thursday.

Thanks to the Chinese government’s continuous effort to stimulate domestic spending — efforts that include the crackdown on Daigou and price harmonization — Chinese consumers continue to buy luxury, but only within the mainland. Thus, we saw shopping activities decline at neighboring destinations such as Hong Kong and Macau and fewer tourists traveling to the U.S. to shop for luxury. More concerning, perhaps, is the overall slowdown of Chinese economic growth. Yet Claudia D’Arpizio, the lead author of the study told Jing Daily, “So far, the evidence does not show a slowdown of the luxury market in the country.”

Regarding the trade war, D’Arpizio said it’s difficult to determine the effect, even in the short term. It could cause some turbulence in the next few months, but rest assured: Bain predicted that brands will still see solid growth through 2025 when Chinese customers will account for more than 45 percent of the global market (with half of those luxury purchases coming from inside mainland China).

The report highlighted Generation Z has become a new luxury force to be reckoned with. Still in their early twenties and younger, Gen Zers rely on their parents as financial safety nets, so they feel free to splurge on luxury goods. The report described Chinese Gen Z shoppers as proud and empowered impulse buyers. They also added that this trend will sustain itself globally, stating “new generations [millennials and Zers] delivering 130 percent of future market growth.”

Taking this new wave of global Gen Z shoppers into account, Jing Daily has highlighted four future luxury market trends from the report and analyzed how they could play out in the China market:

Sustainability

Compared to their global counterparts, the notion of sustainability is still in its infancy for mainstream shoppers in China. Because of this, the primary motivation for Chinese consumers to shop sustainably is for health rather than altruistic reasons like the environment. This is something brands might want to keep in mind when communicating their messages to consumers.

Post-ownership

The new generation of luxury shoppers in China carries a different ideology of ownership. The sharing economy is no longer viewed as a cheap alternative; it’s now considered the smart way to avoid debt. And additionally, the experience of constantly being able to rotate their wardrobes was described as liberating for them.

Above volume and price

For the younger generations in China who insist upon new values for their purchases, their measurements are no longer simply prices-related but have more to do with intangible elements like experience, service, packaging, etc.

Beyond the physical

Online channels are now responsible for a quarter of all global market value, and all luxury purchases are digitally enabled during the sales process, according to the report. Digital channels are often the first and last touch points for consumers in China, so it’s a no brainer for brands to plant their digital channels inside China to capture further Gen Z sales.





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A Brand Audit is the Only Way to Reach Millennials


Recently, a top manager at an indie beauty care brand confided that she was having a hard time describing her brand at one of their recent customer events.

One wouldn’t assume anything was wrong with the brand. The leadership team members are all millennials — just like the target audience. The brand gets consistent 5-star reviews for their service and their product quality. It is one of the few brands I know that I would describe as “authentic” as the entire staff is keyed into a shared vision, everyone is consumer-centric, and experience creation is at the heart of all brand activities.

Yet still, one of the most important leaders of the company acknowledged that it’s difficult to describe the brand. It was easier for the team to explain their products and services than to describe — with precision — what the brand was about. And when they attempted to describe the brand, most of the words they used were rationally explaining what the company was producing and how the service was delivered.

What they lacked were two important dimensions: What do we sell? And what do we inspire?

What do we sell?

This is one of the most powerful questions brand leaders can ask themselves. What do we sell?It sounds banal, perhaps even stupid. But it is crucial to have this clarity. The answer cannot be a category answer. What do I mean by that? If I ask the CEO of a luxury fashion brand what they sell, and their answer is “high-end fashion,” then my typical answer is: “This is bulls**t.” That’s because everyone in that industry sells high-end fashion. It’s a typical category answer. I, like the customer, am more interested in knowing what the brand sells me as a consumer. What is the specific brand benefit I get from their products?

The second typical answer I get in luxury is: “We sell a dream, an experience.” This triggers the same answer. All luxury brands are in the business of selling dreams and experiences, so this answer is not precise enough to describe what the brand is really doing. We need to describe preciselywhich dream we are selling and which experience we are creating. Those dreams and experiences have to be extremely distinct and maximally differentiated from the dreams and experiences other brands sell. Only then can we create a distinctive and rational way to be a brand.

What do we inspire?

Selling something based on rational reasons may work in low-interest categories, but it is not enough in luxury. In fact, to connect with millennials, it’s not enough in any category. They want us to create an emotional context for every brand — a reason why people should resonate with a brand.

This is what people want when they look for an authentic experience. They’re seeking meaning or a purpose they can relate to. When the purpose of the brand matches the purpose of the person, then there is the perception of authenticity, but only if this match is repeated over time. A one-time match is the precondition, while a repeated match creates authenticity and a deep connection. What do we inspire? Which emotional reaction do we expect from our consumers? What feeling do we want to invoke when they think about our brand?

To define the purpose is as important as to define what a brand is selling. It puts the brand into an emotional framework, making it tangible and desirable. It is also the strongest differentiator.

Brand audits and customer journeys

A brand audit syncs the rational and emotional positioning together and validates the brand position. We usually do audits with our clients every two years to make sure that their positioning is still relevant in the context of current competitive dynamics and always-evolving consumer trends. We use AI-based consumer consent measurement as a base to conduct the audit. It allows a brand to measure the perception of the brand by using data instead of gut feelings. In all cases, it reveals insights that otherwise would remain hidden and allows for dramatically higher precision than any other methodology. Together with the management team (typically the CEO, CMO, sales director, and experience director) we conduct an internal and external assessment of the brand positioning and delineate a precise brand positioning approach that combines both the rational and the emotional.

To connect with millennials, either in China or beyond, this exercise is indispensable. Sharper positioning helps to differentiate brands and, in a second step, lets them create a branded customer journey where each touchpoint is optimized to reflect what the brand sells and what it inspires. That rigorous assessment and design of a brand and its customer journey is the key to success in addressing millennials. It is the base for sustainable value creation. Doing business without a proper brand audit guarantees a brand will be perceived as untrustworthy. Knowing precisely what you sell and inspire is the only path toward authenticity.

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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Singapore, Not Hong Kong, is New destination for Ultra Wealthy


The rise of Chinese wealth has given rise to reality shows like “Ultra Rich Asian Girls”

As early as 2018, consulting group Capgemini SE confirmed a wide-known, oft-cited rumour, China’s high net worth individuals controlled an estimated $5.8 trillion of wealth but most of it was offshore despite strict regulations concerning capital flight from the Chinese mainland.

This report adds fact to sentiment, often proven with staggering headline news like the recent Straits Times report that a Chinese buyer had just purchased a fairly premium slice of Singapore luxury real estate to the tune of SG$31.5 million.

At SG$4,805 per square foot for the mega 6,555 square foot penthouse triplex, YTL Land & Development’s Orchard by the Park development registers among the highest psf price in Singapore’s prestigious Orchard Road area code.

YTL’s Orchard By the Park

Speaking with Straits Times, Savills Singapore research head Alan Cheong  opined that high net worth Chinese buyers were “coming in tops among foreign buyers (including PRs) of non-landed private homes in the Core Central Region” in the first five months of 2019, picking up 87 units, double that of traditional big spenders – Indonesians.

According to consultancy Cushman & Wakefield. Singapore luxury real estate is far cheaper than in Hong Kong, combined with an international outlook, world class amenities and the world’s most powerful passport, Mainland Chinese were the largest group of foreign buyers for luxury properties in Singapore in 2018.

From trickle to stream, increasingly, Singapore rather than Hong Kong,  has become the new destination for the region’s ultra wealthy, especially China. Geographically distant from draconian authorities in Beijing, a growing number of China’s wealth managers often hold wealth conferences at the small city-state’s numerous luxury hotels, discussing the slow but inevitable eclipse of Hong Kong as the destination for China’s ultra wealthy elite. Armed with a western outlook yet predominantly populated by ethnic Chinese, Singapore’s advantages are starting to outweigh the traditional lead held by the former British colony.

Historically, Hong Kong and Singapore competed for position as Asia’s premier financial centre and it is a race which persists today given the increasingly global nature of capital and finance. But when the weight of Beijing’s might can be felt, the dynamics change with the balance tilting to the Lion City’s favour.

Hong Kong’s Carrie Lam

Catalyst: Carrie Lam’s Extradition Bill and 2018 Tax Transparency agreements

Carrie Lam, the Beijing-backed Hong Kong leader pushed for the territory’s Extradition Bill covering Hong Kong residents both Chinese and foreign, sparking extraordinary concerns from the citizens of the former British colony. Hong Kong’s modern residents haven’t known anything other than a democratic system of government inherited from the British. In 1997, the territory returned to China from British administration under the promise of a “One Nation, Two Systems” policy. Carrie Lam’s proposed Extradition Bill threatens to upend that policy with growing perception of Beijing’s iron fist threatening both Hong Kong’s fierce passion for democratic rights and even-handed rule of law which makes Hong Kong a favoured hub for international finance.

According to a Credit Suisse 2018 wealth report, there are double the number of ultra high net worth individuals in Hong Kong than there are in Singapore – defined as worth of US$100 million or more, 853 individuals reside in Hong Kong but as concerns deepen over the potential prospect of facing trial in China should the Extradition Bill pass, more and more Hong Kong tycoons are moving personal wealth and holdings to Singapore.

 

Reuters broke the story early this month, speaking to Hong Kong tycoons who consider themselves potentially politically exposed, with one stating that he has “shifted more than US$100 million (S$137 million) from a local Citibank account to a Citibank account in Singapore”, according to an adviser involved in the transactions. Furthermore, legal specialists like Professor Simon Young of University of Hong Kong’s School of Law and legal advisors to Hong Kong’s wealthy elite have been warning about the lesser known aspects of Carrie Lam’s Extradition Bill – that should the bill become law, Chinese courts can freeze and confiscate assets in Hong Kong.

Compounding the fact is that Hong Kong signed tax transparency agreements in 2018 which includes China among the 75 jurisdictions, compared to Singapore’s 61 jurisdiction tax agreements which do not include Beijing or Hong Kong, therefore rendering financial assets and accounts obscure to Chinese authorities.

Singapore’s Chinatown. The Lion City enjoys a 75.4% majority ethnic Chinese population.

Nevertheless Lam’s Extradition Bill and 2018’s tax transparency agreements are only catalysts for the recent uptick in capital flight. Data from Hong Kong’s Securities & Futures Commission show that Hong Kong private banking has been slowing since 2015, with private banking assets lowering from 18% to 10.7% in 2016.

 

Luxify listings



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Why Wardrobe Sharing Platforms are Dangerous to Luxury Brands


While luxury brands like Burberry and Tiffany & Co. are leaders in digital marketing, others fall behind, struggling to understand Gen. Z and millennial consumers. Especially in tech-savvy China, achieving brand relevance in the media-saturated world is a struggle for many established heritage brands. Tackling this new world implies conquering the full essence of the digital customer experience and embracing growing trends like peer-to-peer (P2P) platforms.

Wardrobe sharing apps are the latest global hype, perfectly responding to the needs of the environmentally conscious, hyper-connected consumers. Replacing ownership with convenience and accessibility is not something invented by millennials but they are responsible for significant advancements in the market. Despite a robust appetite for P2P apps, some critics voiced concerns regarding the long-term impact on the luxury market.

First, it’s worth mentioning that the sharing economy is seeing robust growth. A PricewaterhouseCoopers report from 2015 predicts that global revenues from the sharing economy will generate $335 billion by 2025. In China, the sharing economy has seen dramatic growth and World Economic Forum estimates that by 2025 it will account for 20% of the GDP. Furthermore, according to a 2017 report from iResearch China, the country already recorded 12 unicorns, overtaking the lead from the U.S. who registered only 11 unicorns. In China, the sharing economy was strongly supported by the ruling Communist Party; thus, the boom was powered by competing public strategies and favorable policies.

Second, the sharing economy revolutionizes sustainability by reducing waste, greenhouse gas emission, and toxic substances. According to PwC, 78% of interviewees agreed that the sharing economy “reduces clutter and waste.” This responds to the needs of “woke” consumers and shoppers anxious about social and environmental issues.

Third, the sharing model offers better pricing and higher accessibility. Owning a Birkin means paying a premium but renting it comes with a lower price tag. Despite its disruptive essence, the sharing model has the potential to harm the luxury sector. Consumers need to take in consideration the following developments:

1. The sharing economy is sabotaging craftsmanship and the artisan-made production

The blueprint of a luxury product demands effort, exceptional skills, and several hundreds of hours of labor. Heritage brands like Chanel and Dior partner with ateliers and distinguished craftsmen to create the latest designs. During his time at Chanel, Karl Lagerfeld was praised for perpetuating centuries-old craftsmanship through collaborations with Lesage, Desrues, Lemarié, and Maison Michel. As expected, a design that requires several hundreds of hours of labor is close to an art piece and this increases the value of the product. But in the shared economy, these garments pass from buyer to buyer, losing their uniqueness and appeal. High-end apparel was not intended to become conventional but aspirational and rare. The scarcity of the designs pushed the market price up, but if the garments are available to a wider public, the price falls again. In the long run, democratizing the high-end fashion world will put out of business various ateliers and craftsmen.

2. Quality issues

Loose stitching, lost buttons, broken zippers, and faded colors. Everyone who ever owned a piece of clothing knows that even investment pieces wear out. A rented garment that was worn hundreds of times ends up in worse shape. A simple research about Rent the Runway on SiteJabber brings up hundreds of complaints from subscribers who vent about quality issues. Some acknowledge even additional costs and fines. Mandy Velez from the Daily Beast details in a long post her USPS misstep, which came with a lofty financial penalty.

3. Consumers associate luxury with ownership, not with access

It’s difficult to preserve the brand’s luxury identity if the product is available for mass consumption. In the long run, the accessibility offered by the sharing economy dilutes the identity of luxury brands making them bleed market share. Exclusivity means keeping the masses out not inviting them in.

4. Conspicuous consumption won’t disappear

Conspicuous consumption has harmful consequences for the earth and our wellbeing and safety. As the world moves faster, the retail market tries to keep the pace. Medium estimates that 15 years ago, Chinese consumers wore approximately 200 times a garment before disposing it. Today, the number has decreased to 62 wears. Fast-fashion brands, and not heritage houses, are to be blamed for conspicuous consumption. So, wardrobe-sharing platforms are a greener alternative to luxury buying, but they still don’t solve the problem in the long run.

5. The death of shopping gratification

Not only ownership but also instant shopping gratification gets eliminated in the sharing economy. As consumers stop buying new garments, they cease to enjoy the emotional hype that comes with new purchases. Curbing instant gratification and emotional purchases is morally virtuous but eliminating it altogether means cutting production and retail jobs, bankrupting companies, and sending the retail market into a death spiral.

6. Risk of counterfeit luxury goods

 The vast majority of wardrobe sharing platforms has to overcome additional hiring challenges, as they can’t access experts who have competence in counterfeit products. In fact, PwC reports that 48% of P2P consumers have concerns about quality issues, showing a willingness to trust department stores over wardrobe sharing platforms.

7. Dumping a higher stock of merchandise on the market does not increase the perceived value of the brand

Again accessibility kills luxury. We’ve seen it with mid-level and affordable luxury brands that struggle to stay relevant. While the past years came with a renaissance for heritage brands, the mid-segment market was massacred. According to a study from Deloitte, in 2017 sales at the premium and low-priced retailers have seen 8% growth, while mid-retailers registered a decline of 2%. 21st century consumerism is all about differentiation, not democratization.

8. Privacy concerns

Wardrobe sharing platforms collect valuable data on their consumers. This gives them a market advantage but opens the shoppers to real privacy risks. Not all companies embrace the transparent corporate culture or adopt new technologies, thus, data mismanagement remains a serious concern.





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Little Red Book Testing Live-Streaming Feature


In “Chinese Whispers,” we share the biggest news stories about the luxury industry in China that have yet to make it into the English language. In this week’s edition, we discuss:

  • Little Red Book‘s new content creation tool: livestreaming
  • Two new Burberry stores in Shanghai
  • Chinese sportswear brand Li Ning at 2020 Spring/Summer Paris Fashion Week

1. Little Red Book quietly launched a live-streaming feature – Yicai

The Chinese social commerce app Little Red Book is reportedly testing its live-streaming feature as a new way for users to create content. In an official statement to the financial news portal, Little Red Book admitted that it had already invited some of its influencers to try the feature, hoping that livestreaming would become an important real-time interactive instrument for influencers to engage with their fans.

Little Red Book

2. Burberry opened two stores in Shanghai to promote its new “Thomas Burberry” monogram – Jiemian 

British luxury brand Burberry recently launched two new boutique stores in Shanghai’s IFC and IAPM shopping malls. The brand also unveiled a week-long pop-up shop to focus on promoting its “Thomas Burberry” monogram.

Little Red Book

3. Li Ning to show at Paris Fashion Week – LadyMax

Chinese sportswear Li Ning announced that it would debut its 2020 Spring/Summer collection at the upcoming Paris Men Fashion Week on June 22. In recent years, the brand has embarked on a journey to show at major international fashion weeks to enhance its branding position and credibility.





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Bain & Co: The Next Growth Engine for Luxury? Gen Z


Aside from macro-factors like the ongoing U.S.-China trade dispute and China’s economic slowdown, Chinese consumers remain the backbone of the global luxury industry. The country has contributed 18-20 percent of overall growth during 2019 so far, while other markets (except parts of Asia) have experienced no more than single-digit growth, according to the latest report from the global consultancy Bain & Company that was published this Thursday.

Thanks to the Chinese government’s continuous effort to stimulate domestic spending — efforts that include the crackdown on Daigou and price harmonization — Chinese consumers continue to buy luxury, but only within the mainland. Thus, we saw shopping activities decline at neighboring destinations such as Hong Kong and Macau and fewer tourists traveling to the U.S. to shop for luxury. More concerning, perhaps, is the overall slowdown of Chinese economic growth. Yet Claudia D’Arpizio, the lead author of the study told Jing Daily, “So far, the evidence does not show a slowdown of the luxury market in the country.”

Regarding the trade war, D’Arpizio said it’s difficult to determine the effect, even in the short term. It could cause some turbulence in the next few months, but rest assured: Bain predicted that brands will still see solid growth through 2025 when Chinese customers will account for more than 45 percent of the global market (with half of those luxury purchases coming from inside mainland China).

The report highlighted Generation Z has become a new luxury force to be reckoned with. Still in their early twenties and younger, Gen Zers rely on their parents as financial safety nets, so they feel free to splurge on luxury goods. The report described Chinese Gen Z shoppers as proud and empowered impulse buyers. They also added that this trend will sustain itself globally, stating “new generations [millennials and Zers] delivering 130 percent of future market growth.”

Taking this new wave of global Gen Z shoppers into account, Jing Daily has highlighted four future luxury market trends from the report and analyzed how they could play out in the China market:

Sustainability

Compared to their global counterparts, the notion of sustainability is still in its infancy for mainstream shoppers in China. Because of this, the primary motivation for Chinese consumers to shop sustainably is for health rather than altruistic reasons like the environment. This is something brands might want to keep in mind when communicating their messages to consumers.

Post-ownership

The new generation of luxury shoppers in China carries a different ideology of ownership. The sharing economy is no longer viewed as a cheap alternative; it’s now considered the smart way to avoid debt. And additionally, the experience of constantly being able to rotate their wardrobes was described as liberating for them.

Above volume and price

For the younger generations in China who insist upon new values for their purchases, their measurements are no longer simply prices-related but have more to do with intangible elements like experience, service, packaging, etc.

Beyond the physical

Online channels are now responsible for a quarter of all global market value, and all luxury purchases are digitally enabled during the sales process, according to the report. Digital channels are often the first and last touch points for consumers in China, so it’s a no brainer for brands to plant their digital channels inside China to capture further Gen Z sales.





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5 Out-of-the-Box Influencer Marketing Campaigns in China


How to stand out on China’s enormous, noisy, and fast-evolving social networks is puzzle brands are constantly striving to solve. While there is no one-size-fits-all formula, brands’ success stories seem to suggest time and again that creativity wins — and is amplified when it’s paired with the appropriate influencer marketing strategies. Below, we have identified a number of brands in categories from beauty to fashion to travel that has hit the mark with out-of-the-box viral campaigns that incorporate strategies like product seeding, offline experiences, and engaging micro-tier influencers.

Gucci Influencer Marketing 

Aside from a design overhaul by Alessandro Michele that gained attention worldwide for its fresh, edgy youth appeal, Gucci also leads its luxury counterparts in its knack for wooing Chinese millennials on social media. “Gucci joined China’s social media game relatively late, but now sets social media aesthetic standards,” writes the Parklu Luxury Report published last year. “Gucci has also been able to connect with China’s youth in a way no other luxury brand has been able to attain.”

The luxury brand is among those with the highest exposure rate and reach, with influencer mentions ranging from top-tier to micro-tier influencers. Posts with particularly high engagement from influencers included one short video on Weibo from fashion and beauty blogger, @大佬甜er , who included a Gucci bag in her top recommendations for spring buys, along with a product giveaway. On Xiaohongshu, the brand was mentioned in a post by @深夜徐老师 who writes lighthearted, comedic posts on the fashion trends of China’s young celebrities and wanghong. The post received more than 4,500 likes, more than 700 comments, and more than 2,800 favorites.

Gucci recently took their influencer marketing relationships a step further with a virtual influencer campaign on WeChat last summer. Titled, “Why Are You Scared of Me?”, the campaign features an AI-powered robot created in a Japanese lab, who takes on the persona of 23-year-old “Erica,” dressed head to toe in the Italian fashion house’s latest clothing collection. The initial post resonated well with audiences, but Parklu Chief Marketing Officer Elijah Whaley said that the virtual influencer trend is still really about the creative capability of the person behind the digital avatar.

“Ultimately, the long-term popularity of these cyber-enhanced influencers will come down to their ability to create value for their audiences,” he said.

Shisheido Influencer Marketing

The Japanese skincare brand announced in December 2018 that starting this year, it would bolster its influencer marketing strategy and overall presence in China. Yet its achievements on this front have already been apparent, with the brand ranking first in awareness, and topping performance charts on Xiaohongshu and Weibo compared to other brands in the skincare category, according to the Parklu Skincare Report. They’ve been a star at travel retail, working with mainland influencers through product seeding to raise awareness of its exclusive skincare sets in destinations like Hong Kong, Japan, and Singapore.

But this year they’re ramping up their experiential retail game, with plans to create a “multisensorial” art installation in Singapore’s Jewel Changi Airport. The space, called ‘S E N S E’, is certain to be a boon for influencer-generated content, as it allows visitors to embark on a digitally interactive walking trail inspired by Japanese beauty and culture, surrounded by an indoor garden, as well as shopping and other attractions.

M.A.C. Influencer Marketing

One would hardly think that a makeup label would pair well with a mobile hero game, but that’s just what M.A.C. did — extremely successfully — with one of its most recent crossover campaigns. Recognizing the major draw of anime and mobile gaming for China’s Gen-Z, M.A.C. teamed up with Tencent to create limited-edition lipsticks themed around the League of Legends-like game “Honor of Kings”. The unlikely partnership stemmed out of the fact that most of Honor of King’s players are female and often mentioned M.A.C. when describing the female anime characters’ lip colors. M.A.C. created five shades to pair up with five heroes and enlisted both young female idols from the hit reality show Produce 101 and top influencers to produce what would become a viral online collaboration.

While all of the lipsticks sold out within a day, the campaign lives on in a new experiential retail space in Shanghai. Here, customers can virtually try on lipsticks and, using the brand’s WeChat mini program in the store, customize eye shadow shades created by top influencers.

While most brands are incorporating zodiac animal in their Chinese New Year designs, Maybelline got influencers excited about its makeup with a mahjong set. Photo: Maybelline.

Maybelline Influencer Marketing

Maybelline has long been topping the charts with its China beauty influencer marketing game. In 2016, the makeup brand under the L’Oreal Group leveraged influencers and the popularity of livestreaming to sell 10,000 lipsticks in two hours. A year before that, Gartner L2 intelligence group named Maybelline among the top 10 beauty brands in China, praising its digital performance, specifically on Youku. The brand’s channel was the most viewed, with four times the amount of views as the next most popular brand, thanks to a series of Maybelline-sponsored transformation videos on a CCTV6 reality show.

This Chinese New Year, the brand demonstrated that what you do offline can be just as important as online. In a prime example of product seeding, Maybelline sent their influencer marketing collaborators, bloggers and VIP customers lipstick-themed mahjong set to coincide with the launch of their new “Red on Fire” lipsticks (the lipsticks were included in the mahjong box). Their attempt at a creative way to connect with Chinese culture during the holiday proved to be a hit, creating a social media buzz and resounding envy from influencer followers—even top fashion blogger Gogoboi said it was one of his favorite two items received during the season.

Airbnb Influencer Marketing

In 2017, Airbnb announced it was boosting its efforts and manpower in China to appeal to millennial travelers, and in turn, kicked off its social media game with a strong lineup of KOL and celebrity collaborations. Since then, the travel company continues to make digital waves — according to the Parklu Travel Report published last year, Airbnb ranked number three in the top travel brands on social media according to influencer mentions across 11 platforms. They have an especially robust presence on Weibo, where the hashtags #爱彼迎故事# (The Story of Airbnb) and #遇到, 想不到# (Meet the Unexpected) are attached to appealing visuals and rich content among travel influencers.

Of course, the brand continues to face competition from local competitors, making it imperative that they stay active and relevant to their young audience with appealing content and themes. In one particularly successful (and ongoing) influencer marketing campaign, Airbnb changed the tune of Chinese New Year travel to encourage millennials to bring their parents with them on a trip abroad during a holiday period that’s traditionally devoted to spending time at a parents’ or grandparents’ home. With the help of young influencers, Airbnb promoted the idea of traveling “My Way” by charting their explorations with their families through video and photo content.

This particular localization strategy tugged at the heartstrings of young travelers like Linda Yao, who writes, “As the 1980s and 1990s kids grow up and life becomes more convenient and tech-driven, family time has become rarer and less traditional than before. This was the case for my family. My parents took me to Thailand instead of visiting my relatives. My grandparents sent me virtual red envelopes over WeChat while I called back to send my greetings (拜年). To be honest, it’s bittersweet.” Airbnb’s campaign, which encouraged bringing generations of family members together under the millennials’ leads, continued to fuel this sentiment in 2019.





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Chinese Millennials are Rewriting the Future of Luxury Brand Experience


One-third of global luxury sales come through Chinese consumers between 18 and 30 years old. China’s personal luxury goods market is estimated to increase by 6% over the next five years. It is no question that these consumers are changing the face of the luxury experience in China and globally.

Young Chinese consumers prefer unique products over exclusive items, artful over artisanal, and personalized over universal. They are a generation that expresses every part of lifestyle instantaneously on social platforms. No longer do they sit around for their loyal brand to launch a product; instead they follow a blogger whose content is more relatable to them to provide a review of the product before the official launch. They value luxury products as high-quality items rather an expression of wealth. All of which identifies with the traits of Chinese millennials, or aka ‘Chinese Luxury Shoppers,’ directing luxury hubs to get onto the bandwagon of using social platforms to connect with them.

Dilution of sales between online and offline channels has forced luxury brands to undergo a sales and marketing transformation as it races to find new luxury shoppers. This shift drives brands to engage with millennials, build a relationship, and maintain the community to have a visible presence amongst the sea of posts that the overloading the social accounts.

With luxury hubs leveraging the social platforms to maximize their social network, let us take a look at the three unconventional approaches undertaken by brands:

Luxury enters Mass

A locally developed app, Douyin, known as Tik Tok internationally has captured 500 million monthly active users and 250 daily active users surpassing the likes of Instagram stories feature, and Snapchat with more than 46% users identified were millennials and Gen Zs. As these users account for more than 50,000RMB transaction via the platform, luxury brands have begun redesigning their digital marketing strategies to meet them.

For instance, the renowned Paris label, Louis Vuitton promoted its Christmas campaign by posting short videos and linking the product’s URL to the brand’s e-commerce page. This strategy propelled customers to widen their choice before proceeding to check out increasing sales for the brand. On the other hand, Michael Kors took a different approach through the #TheWalkShanghai hashtag challenge. App users uploaded their version of ramp walk with customized branded filters. As users created their content with branded assets, brand engagement increased, and its exposure through subsequent social contents increased traffic to its page.

WeChat, Luxury’s new BFF

Luxury brands on WeChat go beyond the regular WeChat services to build fun and interactive experience for Chinese luxury shoppers. Consider, Sergio Rossi’s WeChat Mini Program to harness the direct-to-consumer luxury trend in China enabling consumers to personalize their footwear. The e-retail experience offered customers a one-stop shopping destination, providing the brand with 360 coverage through social media sharing and influencing the purchase decision.

French cosmetic brand, Guerlain, deployed WeChat gamification marketing plan to introduce their new lipstick to China. Participants entered a racing game where winners have to go to the retail store to retrieve their awards. The omnichannel experience increased brand presence online and gained footfall to the brand’s physical store.

Luxury takes flight

While some luxury hubs create an exciting online experience, others leverage on travel retail stores to provide an unforgettable shopping experience for passengers.

Yves Saint Laurent (YSL) Beaute launched its first travel retail pop-up event at LA airport — one of the busiest airports with a large number of Chinese passengers. To build traction towards the booth, YSL invited four Chinese influencers to participate in different activities to showcase YSL’s makeup looks. The pop-up event offered customizable lipstick arena, instagrammable photo corner and a center stage to unleash their inner rock stars. A full ‘retailtainment’ experience created the mood attracting the younger luxury consumers to indulge in the brand through their creative expression.

In the hospitality sector, the Four Seasons hotel recently implemented its pop-down event in Hong Kong, making it more accessible to Chinese consumers. The two-day consumer campaign promoted the luxury chain’s signature dishes served around the globe. It further promoted its event on social media with an easy-to-use hashtag. Creating a sophisticated culinary experience for the guests helps retain lasting memories for the customers.

Luxury brand experience is transforming from traditional product craftsmanship to undertaking an experiential journey with the brand. Chinese millennials are driving this shift in brand experiential culture through the usage of social media platforms such as Tik Tok and WeChat. Travel retail concept is also gaining popularity amongst brands to connect with their affluential Chinese passengers. As the future presents itself now, luxury brands need to continue dedicating their marketing initiatives via social platforms.

Jenny Chua is the Integrated Head of Created Brandimage China, a global consultancy of brand equity architects and designers.





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3 Creatively Heartfelt Father’s Day Campaigns


With Father’s Day coming this Sunday, June 16, many brands posted their very own gift guide on WeChat at the beginning of the week. This year’s best examples (not surprisingly) are dominated by menswear brands. Each have playful, visual and verbal, and interactive elements that made these campaigns memorable. Below are three examples that showed the greatest creativity, engagement, and execution:

Hugo Boss: show off your dad’s look via user-generated content

Contrary to most brands that recommended products as gift ideas, the German luxury fashion house Hugo Boss chose to highlight the dads themselves for their Father’s Day campaign on WeChat. Their post illustrated different “dad” profiles at different ages, and by linking to a WeChat Mini Program, users can upload pictures of their dads along with words that described their style (like handsome, cool, cute, silly, etc.) They can also view and like other people’s dad photos. There’s no shortage of perks for participating, either. The top-five “like” earners get a free Hugo Boss wallet, and readers can also visit specific offline stores to receive a Father’s Day gift box and card for free. At the end of the post, readers can check out different gifts options for dad. By the time of this publication, the post garnered over 4,280 pageviews and received 25 likes.

Canali: a heartfelt letter to dad

The Italian luxury menswear brand Canali — launched in 1934 — offered a heartfelt letter for Father’s Day. In its WeChat campaign, it asked readers to flip their phone 180 degrees to read the full letter. Users that read the letter can also browse gift options like a belt, tie, or leather bag paired with different entries. At the end of the post, readers can watch a full video of an animated version of the post and check out all the offline stores where they can make purchases. By the time of this publication, the post garnered over 15,000 pageviews and received 720 likes — an impressive number.

Berluti: unlock the mystery box

French menswear brand Berluti prepared an interactive mystery post to help users discover products. On the WeChat campaign, once they swipe through the box image, they can discover the product inside. All different collections shown are listed by color, in gold, blue, brown. Once clicked, readers are directed to the product page that ranges from a $564 (3,900 RMB) wallet to $1,832 (12,600RMB) shoes and even more expensive products. Berluti is also offering some incentives to readers for sharing — those who comment on what they’d most want to say to their father while scoring the most likes can receive a free gift. By the time of this publication, the post garnered over 5,768 pageviews and received 31 likes.





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