As COVID has come to an end, China's luxury market is approaching a tipping point. Pablo Mauron, Partner and Managing Director China of DLG (Digital Luxury Group) spoke at the Luxury Society Keynote 2023 about how brands should re-evaluate the potential of their current local digital ecosystem and how they can evolve their digital capabilities in response to market shifts.
“What we are looking at is something new in terms of context and environment; the environment is not the same under macroeconomic factors and what has happened in the past three years. We are not looking at the market in the same way, and we are not looking at how we invest digital in the same way,” he stated.
In this keynote speech, Mauron addressed three evergreen topics – e-commerce, customer retention, and Chinese travellers – and identified three new “obsessions” brands should pursue to leverage their current digital assets to drive the aforementioned businesses.
E-commerce has become a new growth engine for brands in China. However, for luxury, the vast majority of customers and revenue will continue to come from offline channels, with e-commerce playing a larger role in the early stages of the consumer journey. As a result, Mauron believes that brands need to shift their focus on e-commerce platforms away from pure GMV growth and towards brand building. Furthermore, as the Chinese luxury consumer base becomes more saturated, brands must activate existing private domains through communication channels such as WeCom, rather than focusing on recruiting new customers through media buying.
Nowadays, Chinese consumers are returning to Western markets to spend their money on luxury goods. He also stated that brands' local teams must be aware that the loss of local consumption is unavoidable, but they must also provide the right services on digital platforms to ensure that clients receive an experience comparable to that of China, rather than overlooking or even resisting the opportunity in travel retail.
Watch the video for his full session. A PDF version of his presentation is also available for download at the link below.