Handbag plays an important role in the luxury and fashion industry, not only in Europe but also in China. In China, handbags are usually even more important than clothes, shoes, or jewelry. Why? Because luxury handbags such as Louis Vuitton or Hermes are seen as symbols of social status. They maintain a positive “Mianzi 面子” thanks to the perceived value and social recognition. However, marketing in China is complex and sometimes risky. Among the strong competition existing between bag brands, a strong knowledge of the local market will make the difference.
Market Size and Revenue of Handbags in China
China is the Second Largest Handbag Market
According to Statista, China is the second large handbag market with 6.39 billion USD in revenue after America with 11.15 billion in revenue in 2022. It is also predicted that the Chinese handbag market value is going to increase in the following years with an average growth rate of 9%. Considering the current market share and future growth, the Chinese market is definitely the key market for handbag brands.
Handbag Distribution Channels Share in China
In China, handbag online distribution channels take a huge share of the total sales. Back in 2017, the online revenue of handbags in China took 44.9% of the total revenue thanks to the development of e-commerce and digital marketing tools. This ratio was boosted by the Covid since many offline boutiques are closed for security reasons and reached 75.3% in 2020.
How incredible, only less than a quarter of the handbag sales revenue in China was obtained from offline distribution channels. Although the impact of Covid is getting declined and more customers are looking forward to shopping offline, online sales of handbags still take 67.5% of the total sales in 2022.
The comparison with worldwide handbag sales is quite interesting. Globally, online sales only account for 31% of handbag sales. This is a significant difference between the Chinese market and the global market. Brands should pay more attention to this difference and make the right strategy for their business in China. Hence priority is given to e-commerce platforms such as Tmall and Xiaohongshu.
The Rise of the Second-hand Handbag Industry
Secondhand luxury is a sustainable concept that also allows customers to buy the handbags they like at a cheaper price. However, fake products are always the risk for second-hand luxury products especially when there are lots of small workshops that are making imitations of luxury handbags. Make sure your handbags have some unique features that can be used to identify your product to ensure the right of your customers. The secondhand luxury goods marketplace ZZER noticed a surge of 40% of their ZZER consigners in 2022. They expect to sell 5 million luxury items this year.
Market Trends and Key Factors
The “re-produced” Handbag Industry is Changing the Market
Reproduced vintage handbag is a new and niche industry in China. Small workshops will buy second-hand or even new bags of luxury brands and re-produce new bags with their design. They are mainly purchasing brands like Louis Vuitton or Hermes, which represent a status of luxury in China.
They buy handbags at a competitive price and dismantle them into leather. Big handbags are usually preferred because they can get larger leather from big handbags. In this case, their customers are receiving bags with real luxury brand leather and the design they like, sometimes even small goods like key rings.
This phenomenon is very interesting because it shows the confrontation between luxury brands and designer brands. Chinese consumers are in pursuit of new and interesting designs but also timeless lines of luxury brands. Brands like Louis Vuitton are still recognized as a symbol of luxury and high quality, but the younger generations (Gen Z and Millennials) are looking for a handbag to show their personality and uniqueness. Handbag brands are facing this new challenge.
Boutique Management Secures your Long-Term Reputation (Louis Vuitton case)
Recently, a boutique of Louis Vuitton in Guangzhou was reported to sell fake products to their customers and sell real products to the gray market to make extra money. Yes, it would be like purchasing a counterfeited Dior bag on Avenue Montaigne. While you leave the boutique with a fake Dior bag, a real Dior bag is sold on the gray market.
Although it was done by the sales adviser, it damaged the reputation of Louis Vuitton boutiques in China. Customers find it hard to trust if the products they are buying are real products or fake even when they are purchasing in an official boutique. When there are fake products everywhere in the market, the boutique management of a brand can be the final security of its reputation. This event generated 2 major changes:
- Chinese customers pay attention to the level of excellence of brands from their digital presence to their offline stores (if you hire malevolent local sales, it means you do not care about China)
- They already preferred to purchase online and discovered that the first time they purchased offline they purchased fake items (it destroyed the trust and interest in offline stores for handbags brands)
The Right Balance between Trends and Uniqueness
Customer in China shows diversity in their preference for handbags. On one side, they are following the trends, trying to keep pace with the latest fashion trends, and obsessed with those classic designs. On the other side, they want something unique and show their personality to stand out from 1.4 billion people.
Accidentally carrying the same handbag with another one on the same occasion would be an embarrassing thing in Chinese culture. It explains the development of designers’ brands with unique items. Chinese customers ask brands to show their diversity in their product lines and designs. They always need to find a balance between current trends and unique items.
How to Market your Handbag Brand in China
Step 1. Lead the Trend with Good use of Social Media
There are 2 things brands cannot ignore when they are doing business in China:
- Social Media
Chinese people are used to checking social media every minute for information or communication. Sometimes, they even talk on WeChat while they are in the same home but in different rooms. A mobile phone is a major tool in the daily life of Chinese people. They can read the news, order foods, book tickets, pay for anything, and interact on a daily basis. Even for brands, their reflex will always be to check brands on social media. Especially in the bags category, if you are not on Chinese social media, your brand does not exist.
WeChat, the daily communication social media also enables users to receive information from public accounts or brands. They can discover, browse, share, and even purchase on WeChat via the e-shop in the WeChat mini-programs. If you want to display your brand on WeChat, you will need to set up a WeChat official account first. Then, we can create a complete ecosystem of WeChat mini-programs from WeChat stores, to VIP programs, and real-time store location maps. Your official account and store on WeChat can not only keep your customers updated about your new products but also offers an easy way for them to buy your product directly within the app.
Xiaohongshu is the social media that is mostly used by females for sharing their thoughts and experiences about everything, including fashion and luxury. This social media started as a consumer review channel and ended as a lifestyle media such as Instagram or Pinterest. But the main difference is that for any brand, you can still see shopping notes and reviews. Make sure your brand and products are visible on Xiaohongshu with a positive image so that when someone wants to look for a handbag on Xiaohongshu, your brand and product will appear in front of her. You will need to have an expert in SEO on Little Red Book to use the right keywords, hashtags, and optimization tools.
Step 2. Secure your Online Reputation and your Visibility
The success of a bags brand in China is very sensitive to word-of-mouth. Some models were a success just because a celebrity has worn it or a local KOL talked about it. Hence, you cannot rely on your marketing only but need to work on your online reputation. For e-reputation in China, you have 3 solutions:
- PR – Get press releases in the most renowned magazines (Vogue China, ELLE China, GQ China)
- QA – Receive positive consumers reviews on blogs and forums (Zhihu, Baidu Zhidao, Sougou)
- KOL – Be mentioned by small and large influencers specializing in handbags (Mr Bags)
Step 3. Launch on E-Commerce in China
Since the majority of the handbag sales revenue is made online, mastering e-commerce in China is essential for brands that plan to grow their business on this market. The biggest e-commerce platforms in China include:
They have similar but different business modes and target audiences. Before starting on the market, it is recommended to review which platform would be the best for your brand. We recommend opening a Tmall store since the majority of handbag brands are performing on this one. Especially, all luxury brands such as Louis Vuitton and Celine have a Tmall store and Tmall Luxury Pavilion store. If you have a low price positioning you can look into Douyin and if you have a premium or high luxury price positioning you can look into Little Red Book or WeChat. Then, you will need to make proper strategies for different platforms that can make you win the whole e-commerce market.
These e-commerce platforms are different from what you usually use in Europe such as Amazon or E-bay. So, some brands might find it hard to adapt to those Chinese e-commerce platforms. Don’t worry, you can count on third-party agencies. Cooperating with Tmall partners (TP) can greatly save you time and launch your e-commerce store with the right operations and tools.
Step 4. Find the Right Partner for your Distribution (never easy in China)
Distribution is always an important sector in fashion business. You can try to combine distribution with e-commerce to drive higher sales. Building up your e-commerce and distribution network will help gain a stronger reputation (you are available online and offline) and enable local consumers to see and touch your products in real life.
In China, the handbag consumer’s journey is mainly O2O (online-to-offline and offline-to-online). They always combine digital tools and physical tools to discover your items, learn about your brand, discover reviews and purchase. If you already have a Tmall store, the backend data will help you identify the right provinces and cities to enter in retail stores.
About us: GMA, your best partner in digital marketing
Who are we?
GMA is the expert agency specialized in digital marketing in China. We were founded in 2012 with only 5 people. After 10 years of experience on the Chinese market, we are now 75 people working on a daily basis on the strategy, marketing, e-reputation and e-commerce of international brands. We know the difference in the China market, we see it, we study it, and we will help you overcome it!
How can we help you with your handbag brand in China?
Before starting anything, we always organize a discovery call. This is a free consultation. The objective is to discover more about your brand, your assortment, your best sellers, and your objectives for China. Depending on your demand and current situation, we will propose you a custom-made strategy. More than giving suggestions, GMA will work through the whole development process in China. We will provide 360° support for your brand to grow in China.
Professionals of Little Red Book, Tmall, PR, … And always ROI-focused
We are driven by a three letters word: ROI. No matter the initial investment, whether it is for a small independent brand or for luxury group, we fight for your Return on Investment. For this, digital marketing tools are our best weapon. Being the best professionals in terms of branding and e-commerce, we mastered all kinds of digital marketing skills that can help you start from 0 in the Chinese market.No matter if you just want to test the market or implement an ambitious strategy. GMA always has the solution for you.
With the launch of the Luxury Division, we are now more focused on the luxury and fashion industries. The division is directed by Anaïs Bournonville, previously worked for LVMH in Worldwide Operational Marketing. While she received a greater knowledge of all the local markets and travel retail markets, she decided to specialize in the Chinese market. The GMA luxury division is rooted deep in the luxury and fashion industry. Don’t hesitate to book a free meeting with her for a nice chat!
Case Studies from GMA
Monika Paulinyova created a luxury collection of handbags, each characterized by its unique design and high-quality workmanship. To expand their business in China, the handbag designer Monika contacted GMA to help the brand develop an effective social media marketing strategy. The objective was to target consumers who are looking for full functionality through touch-points like WeChat and Xiaohongshu. All with an eye towards building consumer awareness across traditional as well as new digital channels.
- +2K collects and shopping notes on Little Red Book
- +500 reactions on KOLs posts
- +1 distributor signed during our participation in a local trade fair
The history of the successful brand started with a shoe-making business out of a basement in the late 1920s. Filippo Della Valle, the elder son of Dorino Della Valle and a grandson of Filippo Della Valle, started to develop their business in the leather goods industry. He finally formed TOD’S, an elegant brand selling leather goods including handbags. They have numerous stores around the world, including large flagship stores in Europe, the US, China, Japan, Malaysia, Singapore, Hong Kong, Indonesia, and Australia. To gain more visibility in the Chinese market, TOD’S contacted GMA for marketing support, especially on the SEO ranking.
- Increased visibility on the Chinese market through Baidu SEO operations
- Confidential results
L/UNIFORM offers bags for all sorts of uses. Each bag is designed according to its intended use: a satchel to go to school or to work, a backpack to walk around in style, a large travel bag to go on an adventure, or a small one to go on an escapade. You can also find jewel cases, sports bags, eyeglass cases, bread bags, carry-on suitcases & toiletry bags. Leather and canvas are the two and only two materials used in their product. To expand their business in China, they looked for GMA’s help in social media marketing.
- +2K views per month on WeChat
- +7.6K followers on Weibo
- +1.3K reactions on Weibo
Be the Next to Win the Chinese Market
Any brand can succeed in China with the right assortment and the right partner. Do you want to boost your business in China? Do you want to be known by more Chinese customers? Do you want to be the next to win the Chinese market? GMA is ready to write your next chapter in China.