End of April 2021, The Luxury track participants capped an enriching 5-day virtual trip to China that left many in awe of the skill and prowess of the movers and shakers in the luxury industry’s most valuable market. The cohort was fortunate to meet top executives, many of them were ESSEC alumni, at a range of companies including Ykone, LVMH Fashion Group, Cartier, Chanel, Tory Burch, Estee Lauder, L’Oreal Luxe, Moncler and Roger Vivier. The speakers from these companies brought a wealth of knowledge providing insights into a dynamic, fast-paced and ever evolving market.
The topics covered
during the week started with an introduction to the Chinese market, digital
ecosystem and e-commerce players before moving on to market strategies, trends
and predictions. We were also fortunate to learn first-hand what brands are
doing to build and retain brand value and engage consumers.
Below is a short
recap of some of the key takeaways of the trip:
The
Importance of Consumer Engagement & Gen Z
There’s no
question that Chinese consumers love luxury products but with so many options
available to them topnotch consumer engagement and quality service across
touchpoints can be the key differentiation for a brand to retain clients. Many
a speaker stressed the value they place on providing their clients with quality
service throughout the consumer journey. A key touchpoint is online presence. To engage consumers luxury brands need to ensure
their presence on the popular social apps unique to the Chinese market.
The average Chinese
luxury consumer is 28 years old and spends three to five hours a week
researching luxury products online. One of the tasks’ brands face is appealing
to the young Gen Z consumer group. Brands leverage a number of tactics from
exclusive collaborations to content creation with key opinion leaders or KOLs
(the Chinese term for influencers) for the different social platforms popular
with Gen Z. The strategy is to meet the consumer where they are and foster
brand loyalty at an early age as a skillful investment to help ensure the
longevity of the business.
The Digital
Landscape of China
To do business in China it’s imperative to understand the digital
ecosystem that permeates the everyday lives of Chinese people from super apps
to e-commerce platforms. The recent Hootsuite and WeAreSocial Q1 2021 report
shared that China has a population of 1.4 billion of which 930.8 million are
active social media users, an impressive 64.6% penetration. The average Chinese
internet user has 7 social media accounts.
The established players in this ecosystem are Baidu, Alibaba and
Tencent. Baidu is a popular search engine akin to a Chinese version of Google.
Alibaba is an e-commerce giant that owns the popular platforms T-mall and
Taobao. Tencent is the creator of the super app WeChat. It is the most popular
app in China with 1.2 billion monthly active users. Additionally, many experts cited
the game changing company Bytedance, developer of the apps Douyin and its
international counterpart TikTok.
It is
eye-opening to understand the role of the different social apps like WeChat,
Weibo, Douyin and Little Red Book. Together these companies provide platforms
for Chinese consumers to connect on social media, follow celebrities and
influencers, shop, pay bills, chat with friends, create social media content
and look for product reviews. Luxury brands use these same apps to connect with
consumers. Brands use the apps to
livestream, launch mini-programs, video channels, work with celebrities and KOLs.
The cohort was privilege to hear
firsthand from both leading agencies and brands on the how they leverage these
apps to engage with consumers including some fascinating videos and case
studies that really brought to life the work brands do and the results it
generates.
Nestled in this
ecosystem are e-commerce platforms of Alibaba and JD that have fueled an
e-commerce revolution with effects that ripple beyond China and into the
surrounding region. Alibaba is credited with popularizing the shopping festival
known as 11.11, a single day shopping event that generates more sales than the
USA does for Black Friday and Cyber Monday combined. It’s a testament to the
spending power of the Chinese consumer.
The week was a
thoroughly engaging and enriching experience and it’s not over yet with more
China focused conferences scheduled for early June. We’re looking forward to
it.
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