Digital Marketing For Luxury Brands In China

1. Traveling Chinese luxury consumers are underserved L2 wrote that luxury brands still digitally neglect overseas Chinese tourists who also have huge purchasing power. It is recommended that luxury brands add features such as geolocation and online reservation services on WeChat to cater to these tech-savvy travelers. They also are advised to provide the most popular payment method in China, mobile payment solutions that Chinese consumers are familiar with when they shop overseas. 2. Heightened e-commerce competition Today, less than 10 percent of the surveyed fashion brands have no China e-commerce presence, indicating that brands have taken their online competition to the next step. These brands, however, often are required to wisely choose the platform(s) for listing their products as the country is now flooded with a variety of digital marketplaces ranging from foreign entrants Farfetch, Yoox Net-a-Porter, and domestic giants Tmall and JD.com. L2 noted that even though different luxury brands have different preferences for platforms that they would like to work with, they are in general much more cautious about collaborating with local players. 3. Social e-commerce on WeChat In the last year, luxury brands made a major pivot towards WeChat, with an increasing number of them launching stores on the Weidian platform to explore the app’s closed, one-to-one ecosystem. Brands like IWC Schaffhausen and Cole Haan even sell only this platform. Coach also closed down its Tmall store to focus on WeChat sales. 4. Continued gray zone on Alibaba’s Tmall Even though Alibaba has pledged to solve the counterfeit issues on its third-party platform Tmall, L2 found it was still difficult for luxury brands to maintain their search visibility as too many non-branded sellers operate their businesses on Tmall. To counter this, some brands have devoted more resources to paid strategies in order to fight back against unauthorized merchants. 5. Lack of omnichannel experience Luxury brands have not yet optimized their omnichannel capabilities, despite it being expected by more Chinese consumers. Two winners that are leading the online to offline (O2O) strategy are Ermenegildo Zegna, which allows customers to check in-store product availability and make online reservations, and Officine Panerai, which offers in-store pickup. 6. Pricing strategy differs between pure luxury brands and accessible labels High-end luxury brands, led by Chanel and Louis Vuitton, have embraced price harmonization, narrowing the price gap between home and abroad in 2016. However, accessible labels such as Coach and Michael Kors continued to maintain much higher price in mainland China. 7. Brands’ visibility on Baidu As China’s number one search engine, Baidu SEO is still an important tool for brands seeking to understand consumers’ interests and market trends. L2’s research shows that it remained a challenge for luxury brands to achieve high organic visibility on Baidu in 2016 as traditional SEO strategies are somewhat ineffective. 8. Weibo’s turnaround vs. WeChat’s problem While WeChat has had trouble with monetization and its engagement rate dropped last year, Weibo has experienced a resurgence of the number of active users thanks to its video content. This has driven many luxury brands to re-build their relationship with the platform. 9. China’s video fever There is no denying the popularity of video-related content (live-streaming and short videos) and products among China’s online community. L2 noted that Miaopai has become the favorite video platform for luxury brands in China in 2016. 10. The magic of KOLs Chinese celebrities and online fashion bloggers have continued to help luxury brands reach out to a wider audience in 2016. Successful KOL and brand collaborations include Michael Kors and Yang Mi and Burberry and Kris Wu.