Takeaways From The Luxury Conversation’s Breakfast Briefing in London
Key immediate and long term actions luxury brands must take now
On April 22, The Luxury Conversation hosted a briefing on China’s luxury market at the Rosewood London. Over 40 executives joined the briefing to understand “Does China still matter in the luxury sector?” As China pursues a dynamic zero covid policy, and many key cities are experiencing strict lockdowns, what does that mean for the country’s luxury sector?
Luxury brands will likely see short-term impact yet long-term gains due to the effects of China’s current lockdown restrictions. Coupled with a strong economic foundation as evidenced in the quick recovery in the aftermath of the 2020’s lockdowns, China’s luxury market is fueled by strong demand amongst Millennials and Gen-Zers. According to a Tencent and BCG 2022 report, the post-90’s generation accounted for nearly half of China’s luxury purchases in 2021.
Wenwen Li Schumacher, International Marketing Manager at Harrods, and Queennie Yang, Brand Strategy Consultant and former Fashion Editorial Director at Large of T Magazine China joined Chloé Reuter and Vanessa Wu of Gusto Luxe for a panel discussion.
Here are immediate actions that the speakers highlighted for brands to implement now:
Show support with emotionally relatable content and activities.
Vannesa Wu, Gusto Luxe’s Europe Director, pointed out that “in China since the start of the current lockdown, we have seen the rising popularity of workout videos. For example, Liu Genghong, a Taiwanese-born singer’s daily workout videos attracted 53 million views on Douyin.” Brands such as Rituals and Allbirds gained public attention when they partnered with various talents to provide complimentary mediation and workout classes to their followers.
Provide a robust hybrid brand experience with social media and technology
In the past 2 years, one of the biggest differences in the audiences of international fashion shows has been the reduced or lack of presence of Chinese media and influencers. Ms. Yang said “many brands have quickly found a way to engage with an important group of audience. They have leveraged social media and their on-the-ground teams to deliver a brand experience that key Chinese media would otherwise miss out on.”
As the Chinese borders remain closed in the foreseeable future, it is imperative that brands continue to offer Chinese media and consumers the access to be part of a global dialogue via digital apparatuses.
Engage with overseas Chinese communities
Perhaps, one of the consumer segments that luxury brands have overlooked when thinking about expanding into China is overseas Chinese. Wealthy Chinese increasingly choose to live abroad and/or send their children to study abroad. The overseas Chinese are mainly active on Chinese social platforms. Chloé Reuter, Founding Partner & CEO, Gusto Luxe & Gusto Collective, highlighted that “these overseas Chinese communities present a ‘low hanging fruit’ for international brands in their outreach efforts to Chinese audiences.” Engaging with brand-conscious high-networth Chinese individuals living in major Western cities should serve as one of the natural first steps in a luxury brand’s expansion plan into China.
For the long-term gains, the panelists also spotlighted key strategies for luxury brands to bolster their engagement with Chinese consumers. Mrs Li Schumacher discussed the rewards of collaborating with Chinese cultural and creative talents as part of Harrods’ continued efforts to increase engagement with one of its most important markets. Despite the challenges posed by pandemic-driven border closure in the past 2 years, in October 2021,Harrods’ brought collections of emerging Chinese designers to its Knightsbridge flagship in partnership with Yu Prize and the Shanghai-based fashion showcasing platform Labelhood.
The speakers also suggested that luxury brands need to include the following actions as they draw up their long-term China strategies. Ms Reuter outlined key details in a recent article.
- strengthening user journey from content to commerce,
- elevating brand experience by tapping into innovation and technology,
- dialing up on sustainability commitment,
- responding to the Common Prosperity initiative with localized CSR programs,
- develop a China-ready program to welcome Chinese travellers upon their return
The Luxury Conversation is a platform curated by Gusto Luxe for luxury professionals to connect, share and discuss Asia’s luxury industry and its rapidly evolving affluent consumers.
We curate and highlight topical issues that are impacting the industry and weighing on the minds of our community. From consumer attitudes and trends, to the factors influencing and shaping the market, The Luxury Conversation unpacks the questions of the moment – from China’s luxury consumers and Asia’s economic growth, to the rise of NFTs and the new technologies disrupting the marketplace.
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