What retail trends will be strong for luxury goods in China
in the coming years? Luxury brands will become more invested in e-commerce in
China across a wider range of channels, as we’ve seen a significant number of
brands, such as Gucci, Louis Vuitton and Chopard, launching new initiatives
this summer.
WeChat commerce in particular will be an area to watch as it
becomes more popular with luxury brands. The adoption rate [of this Chinese
social media app] is still low, but we saw an increase in the number of luxury
brands holding special WeChat sales for the Qixi Festival this year. Cartier
has been a leader among jewelry brands, with a full-time WeChat boutique and
unique promotions such as a free helicopter ride for the first 77 customers
ordering Qixi Festival gifts through WeChat this year.
Is e-commerce the most powerful tool today to reach the
luxury consumer in China? E-commerce is becoming increasingly important in mainland
China as the domestic luxury market rebounds. While most luxury purchases by
Chinese consumers still take place abroad, the return of growth in mainland China’s
luxury market is prompting brands to invest more in China e-commerce
initiatives.
L2 found that the portion of brands in the watches and
jewelry category with online shops in China increased from 22% in 2016 to 33%
in 2017. It is crucial for brands to take control of their online sales
presence in China, because they can bet there will certainly be gray-market
sellers out there offering their products online if they aren’t doing so
themselves.
Which jewelry brands are the most popular? Cartier was ranked second for digital performance in L2’s
“Digital IQ Index: Luxury China” report, which benchmarks brands’ digital
performance across four key dimensions that include indicators that can show a
brand’s popularity, such as social engagement or search volume. As the top
jewelry brand, Cartier had the second-most popular post [on social media site
Weibo] among all brands in the watches and jewelry category, and received
record WeChat sales through an omni-channel promotion featuring celebrity Lu
Han.
Bulgari rose to fourth overall in the ranking this year,
thanks in large part to its successful livestreaming promotion with celebrity
brand ambassador Kris Wu, which received 24.8 million views and caused the
brand’s daily Weibo Index to spike to 30 times its average. The brand’s Weibo
post about the campaign was the most popular out of those by all Index luxury
brands, including all fashion labels.
L2 has found that US jewelers vary widely in
digital competence. In this year’s report, Tiffany & Co. was in the “Gifted”
category, with strong engagement on Weibo thanks to its online promotions
featuring Chinese celebrity Xu Weizhou. Meanwhile, Harry Winston fell into the
“Challenged” category due to a lack of digital basics that could help the brand
reach Chinese consumers.
Article from the Rapaport Magazine - September 2017. To subscribe click here.