A newly-released luxury study from Bain & Company in collaboration with Fondazione Altagamma revealed that the global personal luxury market collapsed by over 23 per cent this year (at current exchange rates) due to COVID-19 – and is now valued at about €217 billion down from last year’s €281 billion. To date, Mainland China is the only region to have recorded growth in 2020. And as the market continues to regain momentum, Chinese consumers are expected to account for nearly half the total luxury market by 2025.
At the recent Luxury Society Keynote in Shanghai, Casey Hall, Asia Correspondent at The Business of Fashion and Pandora’s Senior Vice President & China General Manager, Jacques Roizen, weighed in on what can be done to engage and reactivate consumers in this fast developing market. International global brands looking to penetrate the Chinese market need to develop specific digital strategies as consumers in China are entirely different from ones in the West.
For instance, e-commerce platforms in the West might be very focused on the transactional element, but Chinese platforms tend to serve a wider range of purposes: “Tmall and [other] marketplaces are not just e-commerce platforms, they are also marketing platforms,” said Roizen. As such, brands need to enrich their content assets and strengthen the brand narrative on such platforms in order to cater to their audiences. “That’s what brands have been doing very well on their traditional .com, so it’s just a question of figuring out what portion of that content needs to be re-distributed on Tmall,” he added.
The discussion also included this year’s hot topic: Livestreaming. The two main models used in livestreaming today were explored – one for generating awareness on big platforms like Tmall, and the other specifically for targeting existing consumers on brand-owned channels like WeChat. According to Roizen, the latter can better showcase the brand and its products by reaching customers who are already familiar with the brand and have the appetite to purchase, resulting in a higher conversion rate and better returns on investment.
Other points of interest in the fireside chat include the differences when it comes to omnichannel strategies in the West and China, as well as the types of “digital entertainment” that sophisticated digital natives in China expect from their online experiences. Watch the full interview in the video below: