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The New Rules of Marketing

Unmissable insights at Walpole’s Festival of Luxury Marketing

In a world reeling from the economic impact of Covid-19, China is emerging as a lifeline for global luxury, leading the charge in ecommerce innovation and adoption. As brands turn their gaze towards the market that is bouncing back quickest in 2020, we elaborate on the current state of play and forecast future opportunities.

Amidst five days of compelling content, unmissable insights and thought-provoking discussions from world leading marketing professionals at Burberry, dunhill, Ballantine’s, Spring Studios and more, Thursday’s agenda from Walpole x TONG introduced a cross-cultural lens that profiled the world’s largest and most elusive consumer group. Without understanding what’s happening in the Chinese market, a brand is unable to be truly global. Both sessions ‘Social Commerce: China’s New Retail Norm’ and ‘Luxury 2030: Capitalising on the Chinese Decade’ surfaced key market shifts, consumer behaviours and insights on how brands can stay at the top of their game by shifting their current outlook:

1. China’s Gen Z have stark differences to Western Gen Z

Whilst there are commonalities between young people around the world, China’s Gen Z is unique - unashamedly uncompromising in their patience for brands that do not take them seriously. Whether it’s New Age Nationalism or simply the combined purchasing power of 170 million people, they are a discerning generation of consumers with a greater sense of identity than previous generations. However, they are also not a homogenous group, but rather individuals on the hunt for new and distinct pieces and a desire to be noticed for their self-expression. A marked rise in interest for native ‘Made in China’ brands with strong narratives and socially or environmentally conscious philosophies indicates that China’s Gen Z are sophisticated, complex and spoilt for choice; particularly as homegrown brands now stand as strong contenders against European luxury. As the space China’s Gen Z occupies is fast-moving and competitive (42% of luxury spend coming from buyers under the age of 30), socio-political awareness in China is truly a make or break for brands looking to tap into this lucrative market.

Aspinal of London ‘The Giles Deacon Collection’ featuring June 欣 by TONG.
Aspinal of London ‘The Giles Deacon Collection’ featuring June 欣 by TONG.

2. Luxury spending has a powerful effect on market recovery

Premium purchases in China are the driving force behind retail’s bounceback. High-end brands are returning to pre Covid-19 consumption levels faster than their mass-category counterparts. Without being able to leverage physical and in-store experiences for a period, brands were forced to innovate and compete through ecommerce and digital activations, elevating the customer buying experience in terms of engagement and technological possibilities. Burberry’s newly-launched flagship store in Shenzhen offers the ultimate hybrid experience, fusing in-store activations with progressive digital. Social media elevates the IRL journey, with technology providing a seamless integration that augments realities online and offline. A WeChat Mini Program allows customers to design their own avatar, pre-select clothes, unlock content in relation to product or experiences and input into the interactive window display - a recreation of the runway for Burberry’s AW20 show.

Burberry's Shenzhen flagship store and interactive WeChat shop
Burberry's Shenzhen flagship store and interactive WeChat shop

3. Live-streaming and shopping emerge as the new normal

87% of urban consumers in China are on social commerce platforms, soon to account for a fifth of all sales by 2021. The immense popularity of live-streaming on shopping platforms such as Tmall and newcomer Pinduoduo indicates a new consumer behaviour here for the foreseeable future. Behind Alibaba, Pinduoduo has gained 81 million users since March 2020 alone and is now worth more than Uber at $101 billion, a symbol of the monumental success of ecommerce channels today.

Social Commerce: China’s New Retail Norm, TONG, 2020.
Social Commerce: China’s New Retail Norm, TONG, 2020.

Approximately 15% of sales in China have been achieved through live-streaming. Influencers such as Viya, aka ‘The World’s Live Stream Queen’, and Jay Chou have millions of viewers tuning in to a single live stream, demonstrating this format as a viable tool for brand or product mass-exposure. One live-stream from Viya earlier this year saw 37 million people tuning in and subsequently converting engagement into millions of dollars in sales. Live-streaming has huge potential with the right ingredients to supercharge brand awareness and deliver on ROI especially when using KOLs.

Social Commerce: China’s New Retail Norm, TONG, 2020.
Social Commerce: China’s New Retail Norm, TONG, 2020.

China is experiencing the next paradigm shift in technology, innovation and adoption of digital during the most turbulent year of recent times. Its new generation of consumers demonstrate resilience, ability to adapt and an increasing influence inside and outside of its geographical boundaries. This means for brands looking in, the opportunity starts from within - embark on a journey of consumer understanding and most of all, shift the current outlook for ‘global’ as one with China at the forefront.

SOURCES

China Luxury Digital Playbook, Boston Consulting Group, 2019.

Social Commerce Is The New Norm in China, Mintel, 2019.

Meet Colin Huang, who just stepped down as CEO of $100 billion Pinduoduo and whose wealth exploded by $25 billion in 2020, Business Insider, 2020.

The World’s Livestream Queen Can Sell Anything, Bloomberg, 2020.

4 Million Viewers Just Watched A Tesla-Centric Livestream In China, CleanTechnica.com, 2020.

Chinese Livestreamer Sells Rockets, Global Times, 2020.

Burberry, 2020.

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