CONSUMERS

In the Gloom in China’s Luxury Market, Is 520 Still Relevant?

by

Alexander Wei

|

Balenciaga 2024's 520 campaign
Credit: Courtesy

“Decoding Luxury Marketing Milestones in China 2024: 520” co-release by DLG and Re-Hub reveals that despite challenges, 520 remains crucial for luxury brands, showing increased consumer engagement and strategic adaptability amidst China’s evolving luxury market dynamics.

In January, Bain predicted that following a robust 12% rebound in 2023, China’s luxury market would maintain mid-single-digit growth in 2024. As projected, growth for most luxury brands in China, except for a few well-positioned ones, has stagnated.

Coming on the heels of Lunar New Year and Valentine’s Day, the 520 festival traditionally is one of the biggest revenue peaks in the year along with Chinese Valentine’s Day. Nowadays, it has become an omnichannel romantic festival and an important marketing occasion, for brands to launch 520 marketing campaigns and a significant e-commerce focus, including on marketplaces like Tmall.

Brands are cutting their marketing budgets due to a softer than expected revival in 2024. Tmall has extended the 618 shopping festival to start on 20th May. In the face of waning consumer confidence and an oversaturated marketing calendar, the relevance of 520 is being challenged.

In this context, DLG (Digital Luxury Group) and Re-Hub studied over 100 luxury and premium brands during the 2024’s 520 festival and released the latest edition of Decoding Luxury Marketing Milestones in China. This report examines whether this festival is still relevant in China’s current luxury market.

The answer is that 520 remains important. Among our sample, Tmall revenue during this year’s 520 increased by 0.2% year-on-year. Additionally, user-generated content (UGC) related to sampled brands grew by 36.5%, indicating high consumer activity. The only declining metric was engagement with brand-generated content, suggesting a decrease in the buzz or volume of brand campaigns compared to the previous year.

Overall performance of sampled brands during 2024’s 520
Credit: Decoding Luxury Marketing Milestones in China 2024: 520, DLG (Digital Luxury Group) and Re-Hub

Category Performance

China’s major marketing milestones can be divided into two categories. The first includes shopping events such as 618 and Singles’ Day led by online marketplaces, where brands leverage discounts and promotions to stand out. The second includes local celebrations like Lunar New Year, 520, and Qixi Festival Chinese Valentine’s Day (Qixi), which test international brands’ localisation ability to attract consumers through resonant storytelling and new product launches.

These five key milestones shape the marketing calendar for brands in China, regardless of category — fashion, footwear, watches & jewellery — with total revenue on Tmall during these periods accounting for over 53% of the annual total.

Total revenue on Tmall during five major milestones accounts for over 53% of the annual total for every category.
Credit: Decoding Luxury Marketing Milestones in China 2024: 520, DLG (Digital Luxury Group) and Re-Hub

The significance of different milestones varies across segments. Fashion and footwear brands, which have seasonal sales, can more easily stimulate purchases through discounting. For example, footwear brands’ sales during 618 and Singles’ Day contributed around 30% of their annual Tmall revenue. Such festivals are less relevant for watch and jewellery brands, which typically do not offer discounts.

Shopping events like Singles’ Day cater more to self-purchase, while other festivals focus on gifting, particularly romantic ones like 520 and Qixi Festival. Watch and jewellery brands prioritise these occasions. Last year, Qixi accounted for 13.9% of their annual Tmall revenue, and this year’s 520 reached 9.9%.

While all these milestones are crucial, brands need to identify the most relevant ones based on their marketing goals and positioning to achieve the best return on investment, rather than using a one-size-fits-all approach.

Ever-evolving Festival Perception

Another challenge for 520 is that China has several Valentine’s Days, including the local Qixi Festival and Western Valentine’s Day. Why do Chinese consumers still need 520? Moreover, the demand for romance in China is declining, as evidenced by decreasing marriage registrations and birth rates. Is ‘love’ still a universally relevant concept?

Some brands are adopting differentiated approaches for these romantic festivals: leveraging global assets for Valentine’s Day, creating local romantic-themed assets for Qixi, and discussing broader concepts of ‘love’ during 520, showcasing various types of intimate relationships. For example, Loewe collaborated with influencers on RED to promote the new Flamenco Purse bag, featuring couples, close friends, and mother-daughter pairs.

Loewe’s 520 campaign of 2024
Credit: Courtesy

Novelty Launch

Consumer expectations for festivals are evolving. Previously, brands would launch limited-edition series exclusively for these milestones, requiring not only star products but also a deep understanding of local culture to stand out.

Nowadays, brands view these festivals as opportunities to introduce new products, regardless of their relation to the festival.

Among the top five best-selling products during this 520, none were specifically crafted for the festival. Brands like Montblanc and Rimowa introduced new colours for their signature lines, such as the Iced Sea timepiece and Essential luggage. Saint Laurent topped the rankings with its Pochon model from the new Jamie 4.3 collection.

Montblanc Iced Sea Automatic Date Bronze
Credit: Courtesy

Is Discounting Necessary for 520?

With a weak economy and possible arbitrage through overseas purchases, some brands maintain momentum during these shopping occasions through discounting. This year, seven of the top ten brands with the highest year-on-year Tmall revenue growth during 520 offered discounts. For instance, over 80% of products from Weekend MaxMara, MaxMara, and Icicle were discounted.

Discounting on e-commerce platforms does not necessarily increase operational costs. For example, Tmall provides 88VIP vouchers during 618 and Singles’ Day for its members, with the discount cost borne by the platform. However, for the luxury industry, brands should remain vigilant about discounting as it can be detrimental to brand equity and reduce the appeal of full-price products.

Brands like Prada and MiuMiu achieved 237.2% and 195.9% increases in Tmall revenue during this 520 without offering any discounts. Non-price promotions on Tmall, such as interest-free instalments and gifts with purchase (GWP), provide these brands with alternative ways to stimulate transactions. Interest-free instalments have become an important promotional tool for luxury brands—the top ten brands with the fastest-growing Tmall revenue all use this tactical lever.

In a crowded Q2, 520 is followed closely by 618 and mid-year sales for some brands. Two consecutive months of promotions will undoubtedly impact brand perception. Brands like Cartier, for example, prioritise gifting occasions like 520 over 618, offering additional GWP and customisation services. Designing tiered promotional strategies to address different events is crucial for avoiding cross-cannibalisation.

Please download the full report at the link below for complete access to brand performance and additional insights on this year’s 520.

Decoding Luxury Marketing Milestones in China 2024: 520


Alexander Wei
Alexander Wei

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.

CONSUMERS

In the Gloom in China’s Luxury Market, Is 520 Still Relevant?

by

Alexander Wei

|

Balenciaga 2024's 520 campaign
Credit : Courtesy

“Decoding Luxury Marketing Milestones in China 2024: 520” co-release by DLG and Re-Hub reveals that despite challenges, 520 remains crucial for luxury brands, showing increased consumer engagement and strategic adaptability amidst China’s evolving luxury market dynamics.

In January, Bain predicted that following a robust 12% rebound in 2023, China’s luxury market would maintain mid-single-digit growth in 2024. As projected, growth for most luxury brands in China, except for a few well-positioned ones, has stagnated.

Coming on the heels of Lunar New Year and Valentine’s Day, the 520 festival traditionally is one of the biggest revenue peaks in the year along with Chinese Valentine’s Day. Nowadays, it has become an omnichannel romantic festival and an important marketing occasion, for brands to launch 520 marketing campaigns and a significant e-commerce focus, including on marketplaces like Tmall.

Brands are cutting their marketing budgets due to a softer than expected revival in 2024. Tmall has extended the 618 shopping festival to start on 20th May. In the face of waning consumer confidence and an oversaturated marketing calendar, the relevance of 520 is being challenged.

In this context, DLG (Digital Luxury Group) and Re-Hub studied over 100 luxury and premium brands during the 2024’s 520 festival and released the latest edition of Decoding Luxury Marketing Milestones in China. This report examines whether this festival is still relevant in China’s current luxury market.

The answer is that 520 remains important. Among our sample, Tmall revenue during this year’s 520 increased by 0.2% year-on-year. Additionally, user-generated content (UGC) related to sampled brands grew by 36.5%, indicating high consumer activity. The only declining metric was engagement with brand-generated content, suggesting a decrease in the buzz or volume of brand campaigns compared to the previous year.

Overall performance of sampled brands during 2024’s 520
Credit: Decoding Luxury Marketing Milestones in China 2024: 520, DLG (Digital Luxury Group) and Re-Hub

Category Performance

China’s major marketing milestones can be divided into two categories. The first includes shopping events such as 618 and Singles’ Day led by online marketplaces, where brands leverage discounts and promotions to stand out. The second includes local celebrations like Lunar New Year, 520, and Qixi Festival Chinese Valentine’s Day (Qixi), which test international brands’ localisation ability to attract consumers through resonant storytelling and new product launches.

These five key milestones shape the marketing calendar for brands in China, regardless of category — fashion, footwear, watches & jewellery — with total revenue on Tmall during these periods accounting for over 53% of the annual total.

Total revenue on Tmall during five major milestones accounts for over 53% of the annual total for every category.
Credit: Decoding Luxury Marketing Milestones in China 2024: 520, DLG (Digital Luxury Group) and Re-Hub

The significance of different milestones varies across segments. Fashion and footwear brands, which have seasonal sales, can more easily stimulate purchases through discounting. For example, footwear brands’ sales during 618 and Singles’ Day contributed around 30% of their annual Tmall revenue. Such festivals are less relevant for watch and jewellery brands, which typically do not offer discounts.

Shopping events like Singles’ Day cater more to self-purchase, while other festivals focus on gifting, particularly romantic ones like 520 and Qixi Festival. Watch and jewellery brands prioritise these occasions. Last year, Qixi accounted for 13.9% of their annual Tmall revenue, and this year’s 520 reached 9.9%.

While all these milestones are crucial, brands need to identify the most relevant ones based on their marketing goals and positioning to achieve the best return on investment, rather than using a one-size-fits-all approach.

Ever-evolving Festival Perception

Another challenge for 520 is that China has several Valentine’s Days, including the local Qixi Festival and Western Valentine’s Day. Why do Chinese consumers still need 520? Moreover, the demand for romance in China is declining, as evidenced by decreasing marriage registrations and birth rates. Is ‘love’ still a universally relevant concept?

Some brands are adopting differentiated approaches for these romantic festivals: leveraging global assets for Valentine’s Day, creating local romantic-themed assets for Qixi, and discussing broader concepts of ‘love’ during 520, showcasing various types of intimate relationships. For example, Loewe collaborated with influencers on RED to promote the new Flamenco Purse bag, featuring couples, close friends, and mother-daughter pairs.

Loewe’s 520 campaign of 2024
Credit: Courtesy

Novelty Launch

Consumer expectations for festivals are evolving. Previously, brands would launch limited-edition series exclusively for these milestones, requiring not only star products but also a deep understanding of local culture to stand out.

Nowadays, brands view these festivals as opportunities to introduce new products, regardless of their relation to the festival.

Among the top five best-selling products during this 520, none were specifically crafted for the festival. Brands like Montblanc and Rimowa introduced new colours for their signature lines, such as the Iced Sea timepiece and Essential luggage. Saint Laurent topped the rankings with its Pochon model from the new Jamie 4.3 collection.

Montblanc Iced Sea Automatic Date Bronze
Credit: Courtesy

Is Discounting Necessary for 520?

With a weak economy and possible arbitrage through overseas purchases, some brands maintain momentum during these shopping occasions through discounting. This year, seven of the top ten brands with the highest year-on-year Tmall revenue growth during 520 offered discounts. For instance, over 80% of products from Weekend MaxMara, MaxMara, and Icicle were discounted.

Discounting on e-commerce platforms does not necessarily increase operational costs. For example, Tmall provides 88VIP vouchers during 618 and Singles’ Day for its members, with the discount cost borne by the platform. However, for the luxury industry, brands should remain vigilant about discounting as it can be detrimental to brand equity and reduce the appeal of full-price products.

Brands like Prada and MiuMiu achieved 237.2% and 195.9% increases in Tmall revenue during this 520 without offering any discounts. Non-price promotions on Tmall, such as interest-free instalments and gifts with purchase (GWP), provide these brands with alternative ways to stimulate transactions. Interest-free instalments have become an important promotional tool for luxury brands—the top ten brands with the fastest-growing Tmall revenue all use this tactical lever.

In a crowded Q2, 520 is followed closely by 618 and mid-year sales for some brands. Two consecutive months of promotions will undoubtedly impact brand perception. Brands like Cartier, for example, prioritise gifting occasions like 520 over 618, offering additional GWP and customisation services. Designing tiered promotional strategies to address different events is crucial for avoiding cross-cannibalisation.

Please download the full report at the link below for complete access to brand performance and additional insights on this year’s 520.

Decoding Luxury Marketing Milestones in China 2024: 520


Alexander Wei
Alexander Wei

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.

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