Selling luxury products in China is very different from selling goods in Europe or America. As a luxury brand you need to have a strong presence in the digital sphere. Luxury brands have to sell their products either on marketplaces or on their own online stores. Actually with the growing economy, the middle class keeps growing.
The shift of luxury brand’s strategy
The most important target is people in their 30’s. They represent the biggest buyers of high-end goods. According to the figures provided by Chinese consulting firm CBN Data, Chinese accounted for 46 % of retail sales of luxury. This market seems to have a positive future because the Chinese government decided to adopt a more relaxed policy regarding imported goods bought online for personal use. Therefore, luxury brands tend to adapt and propose the same prices than in other countries instead of putting higher prices.
Big cities in China are obvious interesting market because people earn a lot of money. However small cities , which are also known as third cities are becoming more and more attractive for companies because the market provides even more opportunities. Moreover, these places are in progress and development which means that people will know in the future an evolution in their living standard. Because there are less commercial complex , it is easier for them to have access thanks to apps , website and especially e-commerce platforms.
The leading fields are premium brand Cosmetics. We can take the example of Esthée lauder. According to data from the companies the online sales in fiscal 2017 doubles and they are one more time the top prestige beauty company on Tmall for Singles.
Main players in this market
Alibaba and JD.com are important e-commerce actors and they really get involved in this market by working with luxury brand because they know what is at stake. For example, Alibaba decided to dedicate a special place for luxury goods called Luxury Pavillon. One can find products from brands such as Burberry, Hugo Boss and La mer. In addition, they introduced a new section called Tmallspace that sell products available in a limited quantity. For instance, Lowes, a brand owned by the French group LVMH began to sell a special edition handbag on Tmall space sold at 15 900 $.
E-commerce big players relies on big data to fight counterfeit goods mentioned on platforms. Other brands chose to collaborate with China’s biggest retailer JD.com Inc. The case of Armani can serve as an example. Indeed , the Italian brand started to sell items online. The French brand Yves St Laurent also decided to build a partnership with Farfetch and JD.com. According to Mc Kinsey & Company, China will be responsible for generating a rising share of worldwide spending in the luxury sector. The emerging middle class feeds the global consumption of luxury goods in China.
Wechat represents a powerful tool for selling
Using social media is unavoidable in China to be visible. If the promotion purpose seems obvious, don’t forget the fact that this is also a selling platform. Therefore, many important brands such as Longchamp, Burberry Group sell clothes and handbag on the platform. Givenchy and Dior currently tested to realize flash sales on the platform. Actually costumers are very receptive.
Tecent is taking a great advantage of the Chinese digital sphere which is very developed. Last year, Tencent facilitated the way to launch multimedia advertising and the creation of shops on WeChat. The purpose was to make more attractive the platform for luxury brands.The commerce on We chat is also facilitated by the means of payment such as We chat pay and Alipay launched in 2009. Alibaba tried to have luxury brands online since many years ago. They joined Mei.com which received an investment of 100$ million in 2015.
While promoting a luxury brands you need to have a strong image which can be carried by famous people. It can be a singer, an actor or actress but also less famous people that still have a significant influence. The person that carries your values should be the perfect symbol for your brand. In China, KOL are people who have behind them huge communities. Consequently, they can improve your lead generation. You can either pay them to advertise their product or you can offer them your product and then they will promote it for you.
Design a good website
Because you cannot fully control the purchasing experience online it is important to design a good website. It has to be attractive and in accordance with your identity. You need very beautiful pictures and qualitative content . Indeed , the link that you will put on we chat or other platform for advertising purpose will led to your website.
Selling luxury brand product online require a very broad knowledge about the Chinese market but also the digital sphere. GMA can help you thanks to its expertise.
Very interesting article, I will consider some of these info to launch my brand!