Peter Chen, Director & Luxury Lead at Tencent Smart Retail, and Shirley Xue, a columnist for FTChinese.com, discussed how brands should develop their DTC business in the WeChat ecosystem.
EVENTS
[Video] Luxury Society Keynote Shanghai 2021: Marketplaces and Mini Programs
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Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.
PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.
In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”
The Fondation Cartier pour l’Art Contemparain building in Paris
Peter Chen, Director & Luxury Lead at Tencent Smart Retail, and Shirley Xue, a columnist for FTChinese.com, discussed how brands should develop their DTC business in the WeChat ecosystem.
Few could have predicted a decade ago that WeChat, Chinese tech giant Tencent's instant messenger similar to Messenger and WhatsApp, would become a content hub, e-commerce channel, and membership space all in one for luxury brands in the Chinese market. According to a recent Tencent and BCG study, luxury sales on WeChat are expected to reach 30 billion RMB (approximately $4.7 billion) in 2021. In contrast, Farfetch's GMV for the full year 2020 was approximately $3.2 billion.
A diverse range of luxury brands have jumped on the Mini Program bandwagon in order to establish an e-commerce presence on WeChat. Given the platform's nature, brands see WeChat as a critical online DTC channel in addition to the brand.com. Peter Chen, Director & Luxury Lead at Tencent Smart Retail, explained how brands can leverage Tencent's ecosystem to tap into the potential of their digital business in a fireside chat with Shirley Xue, a columnist for the Chinese edition of the Financial Times, at this year’s Luxury Society Keynote.
WeChat has become a testing ground for global brands build up and grow their private domain offering in China. But given the diversity of the WeChat ecosystem, brands need to make changes to their organisational structure before embarking on such an endeavor, said Chen. “The private domain business is an important project for chief executives,” he said, “because it requires a holistic top-down perspective from a brand to its business in the WeChat ecosystem, as well as collaboration between different departments – which is now one of the key challenges facing the luxury industry.”
Unlike traditional online marketplaces, WeChat’s architecture includes various digital assets such as the Official Account, Mini Programs, and WeCom, and can be viewed as a digital “second-floor” for brands, according to Chen. It serves as an online touchpoint for them to continue the conversation with consumers that they interacted with in offline stores, or get in touch with customers from cities where they do not have an offline presence in. This omnichannel experience is what distinguishes WeChat from other digital platforms.
Chen also highlighted traffic acquisition as a challenge for brands running a DTC business on WeChat. “Brands are still concerned about where new traffic will come from and how to reach new consumers, while cultivating existing clients.” In addition to optimising current private domain tactics, brands can also explore more scenarios where public and private traffic intersect – such as WeChat Channels (a video feed on WeChat).
Also discussed in the fireside chat are practices that brands can consider on WeChat, as well as the future direction of Tencent's luxury business. Watch the full interview in the video below:
Editor, Luxury Society
Before joining Luxury Society, Alexander was a business journalist covering M&A, finance, technology and marketing strategy at Women’s Wear Daily. He contributed articles to Financial Times, T: The New York Times Style Magazine, WSJ. Magazine and other media regularly as well. Alexander is also Research Director at DLG China.
