4 Chinese Brands that Show Potentials in Modern Luxury

From silk and jade to redwood furniture and Cheongsam (also known as qi’pao), ancient China has never been short on producing luxury goods that are widely sought-after by the rest of the world for its craftsmanship, artisanship, and top-notch quality. However, when it comes to modern luxury such as apparel, haute couture, leather handbags, etc, China is still working its way up the global supply chain.

In China, there are no homegrown brands or groups that are comparable to global industry leaders like LVMH, Richemont, and Kering in terms of popularity and professionalism. That’s largely due to the fact that the making of a modern luxury brand, or an empire, not only takes a tremendous amount of time, resources, manpower, and modern technologies and craftsmanship, but also requires a right economic and cultural environment.

After dethroning the United States as the world’s top luxury market, China now appears to be entering an era that sees companies attempting to climb up the value chain from the world’s manufacturing base to a country of creation and original ideas. Meanwhile, Chinese consumers are increasingly realizing that their massive purchasing power and how they can use it to influence China’s luxury industry to support “Made in China” design. Jing Daily interviewed a round of industry players and Chinese luxury consumers on this topic, and here are four homegrown brands showing the potentials in becoming something substantial.


Supermodel Liu Wen at Erdos’ fashion event. Photo: VCG

1436 by Erdos

The premium cashmere brand 1436 is the luxury production line of Erdos Group, a Chinese industry conglomerate that is known for its knitwear goods. Founded in 1979 in the Northern China city Inner Mongolia, which is also China’s base of goats that mass produce as much as one-third of the world’s cashmere, Erdos Group used to supply materials to leading luxury brands including Loro Piana, Burberry, and Hermes. Today, the firm modernized its business model, incorporating a design thinking approach for its products, working with foreign designers from Giorgio Armani and Salvatore Ferragamo, and hosting catwalk shows. 1436 was created in 2006, named after the top-level cashmere industry standard. The brand has opened luxury retail stores in various Chinese cities and hosted catwalk shows. Many in the industry see 1436 as China’s “Loro Piana.”


The Shenzhen-based womenswear brand Marisfrolg was named by many Chinese consumers, who are majorly at their forties or fifties, as the first homegrown luxury brand they could think of. Specializing in making women apparel and accessories, Marisfrolg has an extensive retail network in China and has also expanded to overseas markets including South Korea and Singapore. Like Erdos, the company has modernized its design approach in recent years and developed into a full-fledged brand that encompasses design, production, sales, and branding.


Tianjin Seagull watch group masters advanced techniques in watchmaking. Photo: courtesy of Seagull


Established in 1955 under the order of the Chinese government, Tianjin Seagull Watch has evolved to be an important player around the world that masters the expertise in advanced watchmaking. The company manufactures a range of high-end, mid-range, and low-end multifunctional automatic mechanical watches and nearly 100 kinds of products, such as tourbillon, quarter repeater and minute repeater.


Lao Feng Xiao jewelry. Photo: courtesy of the brand’s website

Lao Feng Xiao

Lao Feng Xiao, hose history back to 1848 in Qing Dynasty, is one of China’s oldest gold and jewelry houses. The brand integrates traditional Chinese cultural symbols such as the Phoenix into its jewelry design, garnering the attention of culturally-conscious consumers. Today, Lao Feng Xiao is updating its product design and marketing approach to cater to the next-generation shoppers. The brand has opened retail stores in an array of Chinese cities, as well as overseas destinations such as New York and Sydney.

Source link

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.

Source link

SilverYachts Building Espen Øino-designed SpaceCats in China

SilverYachts, the Australia-based builder of high-performance, fuel-efficient aluminium monohull superyachts, is building 35.5m SpaceCats at its new Pearl River yard.

SpaceCats are built in SilverYachts' facility in China under supervision of the builder's Australian management team

SpaceCats are built in SilverYachts’ facility in China under supervision of the builder’s Australian management team

Hong Kong-based Executive Director Jona Kan said SpaceCat was a strategic partnership between SilverYachts and Espen Øino International. The founder of SilverYachts is German Guido Krass, who runs the eco-friendly Pari Group. China Zhongwang, a Hong Kong-listed aluminium group, recently purchased controlling equity in construction of these fast yet economic aluminium vessels.

Øino said the environmentally-friendly SilverYachts hulls reduce wave resistance at higher speeds and that this concept is “now taken to the next level with the creation of SpaceCats”.

“These power cats have even higher length-to-beam-ratio hulls than the well-known Silver series monohulls, further reducing resistance, and thus power needs, while providing a generous platform with unparalleled possibilities for highly-versatile layouts normally found only on much larger yachts,” he said.

“With its 35.5m length and 13.3m beam, the SpaceCat offers two generous volumes. The external living area boats over 575sqm of space, while the interior areas are over 300sqm. The volume of the SpaceCat can be compared with a 50m monohull, and its roomy spaces definitely imbue a large yacht feeling.”

The introduction of the SpaceCat, said Kan, “comes hand in hand with the strategy of expanding the Perth-based superyacht builder SilverYachts with the establishment of an additional shipyard in China.”

“Located in Jiangmen in the Pearl River near Guangzhou, this yard has been fabricating marine aluminium structures and components since last year, and will be the main facility to build the SuperCat series of vessels.

Designed by Espen Øino, the SpaceCat has over 575sqm of external living space and more than 300sqm of interior area

Designed by Espen Øino, the SpaceCat has over 575sqm of external living space and more than 300sqm of interior area

“Construction of the first SpaceCat will feature a highly-specialist team of aluminium fabricators hand-picked from China and working under the close supervision of SilverYachts’ Australian management team.

“Driven by the vision of majority shareholder China Zhongwang Holdings, the Hong Kong-listed aluminium group, and founder Guido Krass, the German eco-industrialist, who has multiple greentech businesses predominantly in Europe, the SpaceCat will ultimately be manufactured as a production line, starting with two vessels and gradually moving to 10 simultaneously.

“SpaceCat marks the gradual diversification of SilverYachts product portfolio, adapting to the different demands of the superyacht market in new geographies.

“By introducing SpaceCat to its fleet, SilverYachts is showcasing its capacity to not only build large superyachts for experienced owners, but also to cater to clients who are trying a superyacht experience for the first time.

“SpaceCat’s target clients would on one hand be superyacht owners who, instead of having one large vessel, opt for three SpaceCats. The yachts could be positioned in the three main cruising waters – Asia-Pacific, the Med and Caribbean – avoiding any hassles of repositioning and non-availability.

“On the other hand, SpaceCat will also appeal to clients who have a production yacht, and wish to upgrade to a larger superyacht. They have this option to take a step into yachting without the high operational costs of employing a large crew, while enjoying a vessel with large volumes.

“SilverYachts envisages the SpaceCat being a popular choice in the cruising waters of Asia-Pacific, such as Thailand, Indonesia, Malaysia, Hong Kong and Australia. The SpaceCat could also be a very interesting vessel for charter, no doubt appealing to charter companies”.

Kan also said that SilverYachts Western Australian-based shipyard maintains its position as a technological frontrunner, with a new series of larger vessels targeting the upper segment of the international market.

SilverYachts’ 85m Silver Loft is nearing completion, while the design team works on the next project, the 85 m Silver Square, which will be unveiled next year.

Yacht Style #47: The Multihulls Issue – Today’s Choices, Sail to Power


Luxify listings

Source link

What the Fung Family Did Wrong — and Right — with Their Western Luxury Brands

The Fung family, which developed a big empire with their Li Fung Group (which covered many fields like trading, logistics, distribution, and retail), decided to jump into the luxury world early this decade with a dedicated investment Fund called First Heritage Brands. In 2011, they acquired the Belgium leather goods brand Delvaux, followed by Clergerie (a high-end French footwear company), and finally, Sonia Rykiel, which has been its biggest investment thus far.

Sonia Rykiel: the disaster scenario

In 2012, the Rykiel family was looking for tangible help opening more stores around the world, which would require a lot of cash. The accessories line, especially the shoes, was doing quite well wholesale, and they were also looking for a refreshing new designer to translate the Sonia Rykiel DNA into new products.

When meeting with Fung executives, the daughter of Sonia, Nathalie Rykiel, thought she met the right partner to push the brand internationally. She stated publicly that LVMH or Gucci Group (previously, Kering) aren’t the only options out there. But her dreams vanished quickly. First Heritage Brands quickly adopted an ultra-conservative and cautious approach. Instead of expanding the brand’s footprint, they focused on reorganizing and on how they could save money to improve the company’s ROI. It was not a plan to open stores at all.

Then they hired a new designer to manage the Paris studio: French designer Julie de Libran. Coming from Louis Vuitton, Libran was certainly a talented and experienced designer, but maybe not the right fit for the Sonia Rykiel DNA. A younger and more rebellious designer with a more aggressive approach to brand expression would have been a much better fit; someone with a disruptive approach to design would’ve helped the brand to relaunch in new, social media-dominated markets. The brand’s message could’ve easily appealed to many on the internet if it had been adapted correctly. Sonia Rykiel was a famous feminist who placed a strong emphasis on empowering women. In the early 2000s, Sonia Rykiel stores were even selling sex toys along with their knitting collections and accessories. It was a way to express sexual freedom, something that could’ve resonated well today.

Year after year, good elements from the company vanished and little was done to attract young, enthusiastic people. The outcome was a disaster: The brand went from total sales of 100 million € in 2011 to around 20 million in 2018. In 2016, after shutting down even more jobs, Fung executives coldly declared that if the team did not manage to improve soon, they would essentially terminate the brand. Today, Sonia Rykiel is desperately looking for a new investor and, so far, not many offers have come up.

Clergerie: a rather flat result

The story is a bit similar with Clergerie. The First Heritage Brands didn’t do much early on — they merely tried to reorganize a bit and even gave Clergerie the responsibility of managing the Sonia Rykiel shoe divisions, which were doing quite well in the 2000s. But that strategy did not work in the end. The brand studio was not doing well, and it was difficult for Clergerie to create something relevant.

In 2017, Clergerie managed to hire a new designer and even open a new store in the U.S. — something that was supposed to be a priority for the brand. The situation is much better now, but the brand started at a much lower level than Sonia Rykiel with only about 20 million in sales.

It would require much more for Clergerie to close that gap.

The problem here is the Fung family. Although they’re from China, they did not put any emphasis on China or Hong Kong. It was as if they were not confident about the ability of Sonia Rykiel or Clergerie to succeed in China despite the family’s connections. The only thing they tried to implement was a second “Sonia” line launch in China, but they did it very discreetly and in bad locations without any connection to existing Sonia Rykiel outlets. It was a desperate gesture that did not make sense strategically.

Delvaux: the promising one

Slowly but surely, First Heritage Brands managed to update their brands’ expressions, which helped wake them up. They even managed some store openings in China, which is rare for Fung family brands. The moves were done slowly and carefully.

Seen as the Hermès of Belgium, Delvaux had created an exceptionally high-end brand status, and that sense of exclusivity was well preserved when Fung bought it. Their purpose was not to become a new Louis Vuitton or Gucci with huge marketing costs but to remain a small, highly-sought-after brand. Managed by a former LVMH executive, they offer an interesting alternative by emphasizing strong authenticity. With Delvaux, it’s less about marketing and more about making really beautiful products.

Despite adopting new marketing and communications strategies, it is still a bit difficult to understand Delvaux’s true DNA compared to top brands like Hermès. The brand would need more time to form its distinct personality, which might take a while. They also need to extend their assorted products a bit, something that’s likely already in the works. But overall, Delvaux’s results are quite satisfactory: Sales stood at €20 million when the brand was purchased in 2011 but have reached € 100 million recently.

Source link

Prada Bends to Idol Culture While Expanding in China

In China, celebrity endorsement can make or break a brand, and now Prada is finally stepping into the country’s influencer market.

Last week, as part of their Fall/Winter 2019 menswear collection showcase, Prada debuted a new campaign, Human Code, featuring the Chinese singer, dancer, and rapper Cai Xukun. This is big news for Kun’s millions of fans, who are always at the ready to support their favorite star with their spending power, but it represents a big leap for the Italian fashion house, which rarely attaches its name to a celebrity, let alone a controversial Chinese one.

Prada has started to aggressively expand in China, both through exposure and sales channels. Nearly a week after announcing the Kun campaign, the brand hosted its very first Spring/Summer 2020 Menswear fashion show in Shanghai, while also launching on Chinese e-commerce platforms JD.com and Secoo. On June 10, Prada’s share price opened up 6% on the Hong Kong Stock Exchange to 23.65 Hong Kong dollars, with a market value of over 60.4 billion.

Kun first rose to fame after appearing on the reality show Idol Producer and then become a member of boy band Nine Percent. He had multiple No.1 hits on the Chinese music charts, and with over 24.6 million followers on Weibo, he’s become the latest heartthrob among Chinese youth. Kun was recently crowned as the most buzzed-about star on social media in our April and May celebrity index, largely due to his online disputes (including an accusation that he bought fake followers) and his ongoing legal battle against the Chinese video company Bilibili, that stems from the artist demanding the site remove a video of him playing basketball. Kun isn’t a “bad boy” per se, but he finds himself in the news often.

Instead of granting Kun the title of spokesperson in China, Prada is emphasizing that he’s just one of many in their campaign line-up, keeping his role limited to the context of this campaign. Prada created a one-and-a-half minute video for the campaign that features Kun and was created by contemporary Chinese artist Cao Fei, who is known for making art that comments on the abrupt changes in Chinese society today.

The video smartly examines the state of the “idol culture” that’s currently sweeping through China. The story is set in a so-called “Post-Anthropocene” era in the future where Kun, a visitor, sets foot in a “Museum of Mankind” and is puzzled by a man-made man that looks exactly like himself. It’s meant to provoke viewers into wondering ‘who is the real or original Kun?’ “In the future, this is an ethical question regarding the idea of man-made humans,” said Fei in the statement. “Like clones, it will result in a conflict between the species.” The video also seems to also hint at Kun’s dual identity — the idol Kun from the point of view of his fans versus the regular human Kun — demanding viewers to consider what version of their idol they’re getting. The campaign itself doesn’t bashing — or praise — idol culture, because either would risk turning off Chinese consumers.

So far, fans’ online comments are overwhelmingly positive, and the campaign, which debuted on Weibo, has been forwarded by more than 1 million people, many of who even shared a picture of their purchase receipt as a show of support. Even some of the toughest fashion critics in China liked the Prada campaign, with most referring to Kun as the latest Prada spokesperson. Among the posts that generated more than 10K pageviews on WeChat, Chrison作势 recognized Prada’s effort to stay relevant with the current generation by including more diverse male stars in China (and around the world) like Kun. Another critic named Byfresh loved Prada’s philosophical approach towards the appointment of Kun and its campaign, and his perspective seemed to reach readers. One reacted positively, saying, “I want to become an Intellectual wearing Prada.”

“It used to be this one-way relationship between fans and idol, you can only write to them, or attend meet-ups,” the artist Fei added about fan culture in China, “but the internet really makes it a two-way street…an important part of idol’s success has to do with their fans.” This is something that brands — even ones with reputations like Prada’s — now understand, and it’s why these idols are clearly the best way to market to their legions of fans.

Source link

This China Podcast Offering a “Reality Check” for Brands

Navigating the China market can bring an endless list of challenges and considerations both planned an unplanned. For instance, how can brands localize their marketing strategies beyond first-tier cities? Or how can they be “China ready” in relation to technology? The British Chamber of Commerce in Shanghai is tackling these and many other China-related questions facing marketers and brands in their insightful podcast series, Live Lounge.

Season two is launching this month with two formats: a “live lounge” featuring a panel discussion that invites input from a live audience, and a “mini lounge,” a three-way chat that seeks to delve deeper into a wide range of consumer categories and topics, including consumerism, lifestyle, digital marketing, and even architecture, with experts from marketing, tourism, and other sectors.

While it’s not luxury industry-specific, Live Lounge’s content has relevance to the sector, with episodes that explore launching your brand in China, and what Chinese consumers want, and Digital transformation—East vs. West. “Everyone in China is in the process of his or her businesses,” British Chamber’s Marketing Focus Group Chair Kirsten Johnston, who heads up the podcast project, told Jing Daily. “No one’s ever arrived and succeeded. Everybody is going through a particular stage, and that’s what we wanted to highlight so that when you’re listening at the season, you feel like China is perhaps less daunting than what you thought because there’s real people I can talk to.”

One such person is Karen Hao, an IP lawyer from a Chinese law firm, who, in episode four, discusses challenges and dispels myths relating to operating within a Chinese legal system for intellectual property. “She really gives some very valuable information that people don’t even think about,” Johnston said. “People jump to the obvious stereotypes and conclusions that products will get copied. It’s not about fear of it but how to put a process in place to stop it from happening, and she really gives some practical advice on it.”

A key takeaway for all listeners, Johnston says, is the importance of doing research about the depth of the China market. “We can’t just have a one-stop solution in marketing that is spread all over China,” she says. “It doesn’t work.” Enforcing this idea, nearly every episode cites a brand or entrepreneurial “disaster story.” “We keep seeing the repeat failures happen again because people haven’t prepared or they’ve made big assumptions.” Johnston says brands and marketers should ask themselves, “Do they know their customer segments well enough? That’s where you need an element of your knowledge on the ground in China.”

The British Chamber is inviting listeners to submit their own topics, but for now, the next six episodes, aired between now and November, will cover issues like growing your business in China, leveraging country branding, product launch and marketing, and recruiting and retaining talent for brands operating within the country. “We’re not trying to pretend that China’s this golden place, we’re trying to say, ‘Yeah it’s a great opportunity to trade here, but don’t think the market is as big as you think it is,’ Johnston said. “Your category might only be a few million people. It’s not going to be as enormous s the 1.3 billion, which everyone seems to have this figure in their mind. This series is about that reality check.”

Source link

Tactics of Selling to Millennials and Gen Z in China

When it comes to selling luxury in China, most brands do not focus enough on creating an actual luxury experience. And in part, this is why most brands are not as successful as they could be in China. In my brand audits, there is one recurring theme. Most western companies replicate their winning playbooks from other regions in the Chinese market with too few adjustments. This includes both organization setup and go-to-market. And then they are surprised that it does not work.

Often the underperformance is detected too late. When a brand launches in China, initially sales will grow as distribution expands. Even if a brand is behind target, global leadership teams are typically blinded by growth rates that are beyond what they are used from other markets. Hence, they swallow the local profit losses, focus on growth, and celebrate the local teams until the growth slows. By then, their total global growth has been dependent on the growth rates in China, so they can’t afford the slowdown. More money is pumped into China, losses compound, and panic starts. Results get worse and worse, and local teams are demotivated as the pressure on them mounts. Yesterday’s superstars are the faces of underperformance today. What are causes, and how can this be prevented?

Insufficient consumer centricity

What I typically observe as an organizational model for China is a replication of the pipeline model most companies use outside of China. It generally is product and function focused. The pipeline starts with products and inventory, moves on to activation, advertising and promotion support, and brand building. This linear approach is inefficient in China as expenses grow linearly (often even exponential) with sales growth. Operations become financially unsustainable as the Chinese sales grow.

But there is an additional issue: The pipeline model typically has service and experience creation within certain functions, often in marketing. This creates silos and prevents the brands from delivering excellence in consumer experiences. I often see here the western pipeline model failing miserably in China. The result: underperformance in revenue, market share, and significant losses. After-the-fact intervention then becomes incredibly expensive, as the plane has to be repaired while it’s already in the air, as I like to put it.

In China, selling to millennials and generation Z means selling to digital natives who will interact with the brand mainly digitally. They expect excellence in every touch point and a branded luxury experience both online — even beyond the website as they will interact with the brand on WeChat, etc. more than on the brand’s website.

The experience cannot be delegated to one department, with all other departments focusing on pipeline and inventory selling. Companies need to build a radically different organizational model for China (I even recommend it beyond China), a model that puts customers into the center of all thinking in the most rigorous fashion. Hence, the organization should be built around customer experience creation with a clear playbook on how to create perfect customer journeys.

With digitally native consumers in the center, a sound, transparent, and usable CRM becomes key for success. It needs to collect data online and offline. Thus, all functions must be consumer-oriented to cater to consumer-driven activities. At the scale of China, customer journeys need to be triggered in an automated way using AI, machine learning, and software systems that make sense of the collected data. In most brand audits, I see companies collecting data but not using it sufficiently. The experience breaks down.

Insufficient go-to-market

Apart from insufficiently organizational workflows, we typically find an insufficient go-to-market model in our audits. In China (and beyond), luxury consumers expect to be addressed in a highly individual fashion. This requires specific consumer journeys that are perceived as highly relevant and personalized. In short, brands need to create a perceived authenticity of brand interactions. And those interactions require sophisticated data analytics, as most will happen digitally. A one-size-fits-all approach that is based on the opinions of marketers does not work with young Chinese luxury consumers, but it is what most brands do today.

The relevance of the content is critical; such is KOL selection and consumer activation. To derive relevance, we are using social listening into specified consumer groups and SEO (search engine optimization) as well as keyword identification. Traditional retail is still essential to sell to Chinese millennials, but the consumer journey has to be seamlessly integrated with the online journey.

You are only as good as your last experience

I recently went to the Shanghai flagship store of one of the top three luxury fashion and leather goods brands in the world. The store received a lot of fame due to its outstanding decoration, making it an experience place that many brands envy. However, my personal experience was underwhelming. When I came into the store, the service was relatively indifferent. I was not treated as a client but felt that I had to “qualify” as a new client, despite having bought several items at other brand stores around the world. The customer journey had a clear breakdown and was unpleasant. Hence, the millions invested in the store were worthless because the customer journey was not perfect. In luxury, everything less than perfect is not acceptable.

This is one of the most important lessons to sell to Chinese millennials. The experience can’t have any breakdowns. If the last experience is unpleasant and not personalized, as it was in my case, consumers will be disappointed and turn away. The previous experience is all that matters. And will define how consumers will see the brand in the future, whether the experience is digital or physical.

To master the challenge, companies need to think differently in China. They need a fluently integrated online and offline system that puts the customer in the center of all thinking. They need to become masters of experience creation, building the entire organization around it. Many companies claim customer centricity, but few master it. And only those who are excellent will be successful over time. The last experience is all that matters.


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

Source link

Strategies to Attract Beauty Luxury Consumers

The success of the beauty sector plays a crucial role in the survival of the luxury market. Commonly, cosmetics and fragrances are the first luxury investments made by young consumers; thus, through beauty acquisitions, premium brands can subtly influence customer loyalty. According to Zion Market Research, the global beauty market is projected to reach an estimated $863 billion by 2024 and China is set to become the biggest global market for cosmetics, thus driving consumer trends.

As the steady growth of the beauty market continues, established beauty players will have to fight off competition from traditional legacy brands to indie labels to emerging digital retailers. Relying on practical solutions, and formulas from the past, will no longer work for reaching target audiences. Given this, beauty brands need to change their strategies.

Not too long ago, media campaigns for luxury cosmetics and fragrances used to present sumptuous images with attractive people (Charlize Theron for J’Adore Dior or Keira Knightley for Coco Mademoiselle) enjoying an ostentatious lifestyle. But millennials and Gen Z changed the industry, pushing for a new set of values. They demanded honesty and authenticity instead of an aspirational lifestyle that is no longer considered the apex of success.

Considering these shifts in the consumer market, beauty companies have had to reinvent themselves. And in today’s beauty industry, achieving market success is not possible without the optimization of resources, balancing product and shopper knowledge, and the personalization and digitalization of goods. And as the Chinese beauty industry is in the midst of a period of metamorphosis, global beauty brands that want to keep up with the changes, and more importantly, get ahead of the competition should consider the following strategies:

1. Promote cross-segment collaborations with the wellness industry.

According to the Global Wellness Institute (GWI), the wellness industry is a $4.2 trillion market. The pursuit of a healthier lifestyle boosted the wellness economy, bringing changes in dietary preferences, workout routines, beauty procedures, and cosmetic surgery. Consumers expect crossover collaborations between various wellness segments. Fitness, beauty, and healthy diet habits won’t remain separated. We can already see this shift as gyms partner with diet gurus, top salons offer post-workout massages, beauty brands collaborate with bodybuilding influencers, and fitness centers offer relaxation therapy and beauty treatments.

2. Embrace healthy aging instead of timeless beauty.

Natural beauty routines and organic, safe products are becoming the norm. As beauty becomes more of a health issue, conventional brands need to embrace the evolving natural trend if they intend to keep their market share. Affluent consumers favor bio cosmetics, being aware of the dangers of certain ingredients such as paraben, sulfates, petroleum distillates, propylene glycol, and triclosan. This consumer disruption has pushed Sephora to launch Clean, a beauty category free of unwanted ingredients (50 brands have already signed on), making it easier for beauty lovers to search for products free from dangerous ingredients. According to Stéphane Rinderknech, CEO of L’Oréal China, L’Oréal understands the “Efficacy Orientation,” Rinderknech told Jing Daily. “Chinese consumers are eager for superior quality, safety, and efficacy.” And according to Rinderknech, this trend incites consumers to demand “transparency in science and formula.”

Beauty buyers expect transparency, as they no longer believe fake marketing campaigns that promise timeless beauty. But this doesn’t imply that consumers don’t want beautiful, youthful skin. The success of the Korean skin-care routine and the focus on preventive care, and the boom in anti-pollution cosmetics in China reveals a change in the beauty industry.

The surge in clean beauty products contributes to the sustainability movement. Empowered consumers demand full disclosure, challenging the status quo of traditional beauty brands that refuse to follow ethical and sustainable practices. “Value-based consumers are emerging, and their consumption decisions are influenced by brands’ social responsibilities, and standpoint on social issues,” said Rinderknech. And “beauty inside and out” is a characteristic of this new Chinese consumer.

3. Redefine the beauty industry by adopting an inclusive mantra.

Diversity is trending in the beauty industry and Fenty Beauty’s boom is the perfect example in this direction. Rihanna’s 40 Shades of Foundation was an instant success and brands such as Dior, CoverGirl, Maybelline, and MAC followed suit. But diversity includes even genderless products and the emerging men’s beauty category. Because of social media and the Instagram hype, makeup for men is on the rise. Urban metrosexuals like David Beckham and Brad Pitt are world famous, but they aren’t the only ones investing in grooming and cosmetics for men.

In China, Shenzhen has become the national metrosexual capital but because of rapid urbanization, increased purchasing power, and social norms (looking good is linked with professional success), the trend was exported to other metropolitan areas. According to Mintel, by 2020 the Chinese male facial skin market will reach $1.8 billion, and Rinderknech believes that “Chinese consumers are entering a new world of B-you-ty, a world of ultimate consumer centricity and personalization.” He identified “HE Beauty” as one of the 10 New Consumer Characteristics. According to Rinderknech, male consumers are “developing more advanced skincare or even make-up habits, with a growing trend in professionalism, segmentation, refinement.” The beauty sector is sensitive to consumer demands, thus the boom of gender-neutral brands like Fluide and the success of the androgynous-looking aesthetic in China shouldn’t surprise us.

4. Increase the use of social media and invest in digital marketing.

Beauty brands learned that social media facilitates effective dialogue with target consumers. Digital also increases brand engagement and overall sales, bringing the end consumer closer to the brand. Internet and social media have emerged as the main source of information for younger consumers; thus, apps, social media groups, digital networks, and online communities have become the go-to source for product reviews, beauty news, and skin-care routines.

5. Collaborate with KOLs and embrace the Wǎnghóng “网红 economy.

Stéphane Rinderknech told Jing Daily that “various beauty influencers are emerging from grass-roots to professions sharing skincare and make-up know-how on social media.” Rinderknech is right; China is pioneering influencer-marketing campaigns. In the age of overexposure, the beauty market is dependent on customer testimonials from vloggers and influencers. KOLs speak the consumer’s language and understand the need for genuine product reviews and no fuzz beauty tutorials. Influencers become brand ambassadors who increase the visibility, perceived value, and desirability of beauty brands.

6. Improve the in-store experience.

Consumers appreciate luxury brands because of the excellent customer service experience and personalized approach. However, for several heritage brands, there’s room for improvement. Some market leaders offer VIP services (treatment rooms and in-house salons), customization of beauty products (Skin Inc. is famous for customized skin care and Dior offers customizes fragrances), and concierge experiences (hair appointments and professional makeup services offered directly in the comfort of the customer’s home).

As customers get accustomed to superlative services, their expectations change. “[Chinese] Consumers are getting increasingly sophisticated with desires for more sub-categories and functions to meet their personalized demands,” Rinderknech says. Ultimately, a higher level of services means competitive positioning on the market and higher brand equity.

7. Don’t be afraid to go high-tech.

Until recently, the beauty industry wasn’t particularly renowned for technological advancements. But today, in innovative markets like China, augmented reality, 3D printing, smart beauty devices, and high-tech makeup, are revolutionizing the skin care market. “L’Oréal understands the “Physical Experience,” Rinderknech says. “Chinese consumers are aspiring for a more personalized experience at all touch points across offline and online channels.”

Evidently, personalization is also important for the brands that want to enable customer engagement and increase overall sales. Along these lines, the beauty industry is embracing high-tech and innovation. For the launch of the Mon Paris Couture perfume, in the pop-up store at Harbour City, in Hong Kong, YSL Beauté offered in-store bottle customization. Moreover, beauty retailer Sephora launched in selected stores 3D augmented reality mirrors, while Neutrogena designed Skin360, a skin scanner that offers personalized skin analysis. Kerastase partnered with Withings to deliver Hair Coach, a smart hairbrush that offers insight about hair quality. Kohler designed Verdera Voice Lighted Mirror with Amazon Alexa, a bathroom mirror that comes with stereo sound and voice command, and creates the perfect light for the morning makeup routine. And Olay conceived the Future You app and uses AI technology to offer personalized services as well.

Through Le Teint Particulier, Lancôme scans the customer’s skin and delivers customized foundations. And L’Oréal urges consumers to pay attention to sun exposure while offering for free their stretchable electronic skin patch, My UV Patch. This is a small device that measures sun exposure and offers personalized information through an app.

As top luxury cosmetic brands face increasing competition from direct-to-consumer brands and beauty startups, key functional requirements change. Along these lines, promoting cutting edge technologies, innovating the customer experience, and building meaningful engagement should be prioritized as a way forward.

Source link

Is WeChat’s New Social Commerce Feature a Game Changer

With the recent rise of social commerce apps like Little Red Book and Pinduoduo in China, social media and e-commerce platforms have now begun to converge at unprecedented rates.

WeChat, the uncontested top social media messaging app that was developed by China’s tech giant Tencent Holdings, is no exception. In April, the platform quietly launched a new feature called “Good Product Circle” (好物圈), which looks like an effort to strengthen its social commerce capabilities for its over one billion daily active users.

Good Product Circle is an extension of WeChat’s “Shopping List” feature, which came out last September. The “Shopping List” feature was originally created to allow users to centrally manage orders and shopping carts that they have scattered amongst different WeChat Mini Program stores. The April update to “Good Product Circle” saw WeChat introduce a new interactive module that allows users to recommend products, access friends’ recommendation lists, and socialize on the interface.

social commerce

How Good Product Circle works. Photo: courtesy of Kantar

According to the consultancy Kantar Group, Good Product Circle lets users share different e-commerce Mini Program stores with friends, making the process of “grass planting [creating a demand] + shopping” — which is the core of the social commerce trend in China — much easier and more seamless. Users can share products from different platforms and interact with friends within Good Product Circle. They can also directly access merchants to purchase products recommended by friends.

Tapping into the power of friend and acquaintance recommendations gives Good Product Circle a huge amount of potential to grow into something more substantial during a time when Chinese consumers are now starting to feel fatigued by influencer marketing and advertising. Kantar said the acquaintance recommendation system on Good Product Circle can eliminate fake ads and enhance the credibility of the recommended products, thereby, gaining users’ trust.

However, the biggest drawback of Good Product Circle is that it’s difficult to find. “The portal is too hidden, and every entry is so troublesome. Plus, no notification is given,” a user named Hua commented.

social commerce

Opportunities that Good Product Circle bring to brands and merchants. Photo: courtesy of Kantar

In addition, brands and merchants are required to change their promotion strategy — from a brand-centric approach to a product-driven one — in order to best utilize Good Product Circle. The ability to create best-seller products with good word-of-mouth and place product-centric promotions to drive more users to proactively share products in their Good Product Circle will be the key.

Overall, the development of WeChat’s Good Product Circle will offer luxury brands and retailers in China another social commerce channel. Currently, brands typically collaborate with Chinese influencers to drive social commerce sales on WeChat, but Good Product Circle, built upon real consumers, is a fresh new possibility that lets normal people become influencers.

Source link

Trade War Victim Tiffany Strengthened Presence in China

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

1. Trade war victim Tiffany strengthened its business presence in China on the back of decreasing Chinese tourists to the United States – Jiemian

The American jewelry brand Tiffany & Co is betting on a warmer bond with China to offset the recent downhills caused by the escalation of the U.S.-China trade war.

Last week, the company admitted it has felt the chill of the trade war, with CEO Alessandro Bogliolo singling out the massive decrease of tourism spending from China as a key reason to lower the company’s full-year outlook. The same week, Tiffany & Co. opened a new boutique store in Beijing with posh a grand opening ceremony. The new location offers Chinese consumers a fresh retail experience and top-notch service. Philippe Galtié, vice president of Tiffany & Co., also told Jiemian that the brand would launch its first-ever e-commerce platform in China, on August 8, the Chinese Valentine’s Day.

trade war

Amid the escalation of the trade war, Gucci and Patek Phillippe announced to raise retail prices, starting from June 1. Photo: Shutterstock

2. Gucci and Patek Phillippe raised retail prices in Greater China since June – Beijing Business News

As the current trade disputes between the United States and China continue to ratchet up and spread to sectors including education, tourism, and retail, high-profile luxury brands Gucci and Patek Phillippe have started to drive up their retail prices since June 1.

According to Chinese newspaper Beijing Business News, Italian luxury brand Gucci conducted a round of global retail price increases, including the Chinese market. The pricing change was a strategic move to consolidate Gucci’s luxury positioning in the industry, the brand said. At the same time, the prestigious Swiss watch brand Patek Phillippe increased their retail prices in Hong Kong from June 1.

Miu Miu

Prada, Miu Miu, and Car Shoe will launch on JD.com on June 18. Photo: Shutterstock

3. Prada to debut on JD.com during the “618” mid-year shopping festival – Winsang

The Italian luxury powerhouse Prada Group has lately ramped up its expansion in China. Following a debut on the Chinese luxury e-tailer Secoo last week, the company teamed up with another e-commerce firm, JD.com, this week.

Prada, Miu Miu, and Car Shoe, the three major luxury brands in the Prada Group, are setting up an official presence on JD.com and will unveil the 2019 autumn/winter collection during the upcoming mid-year shopping festival on June 18 (618). The “618” shopping festival was originally coined by JD.com as a competitor to Alibaba’s Singles’ Day event.

Source link