Leveraging Chinese Social Media in the Luxury Market 2014

www.digitaljungle.com.cn  

AGENDA

luxury marketing

changing attitudes

luxury shopping & social media

chinese social media

challenges

overseas purchase

social media strategy

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LUXURY MARKETING TO CHINESE

The luxury market in China is huge and growing fast. In 2015, China will account for one-third of the global market (estimated at around $175 billion) for luxury goods

Source: http://www.industryweek.com/global-economy/china-claim-one-third-luxury-market

CHINA’S WEALTHY

There are now a total of 1.05 million millionaires, up 3% from the previous year. Millionaire Profile  Their average age is 38, with more than half aged between 31 and 45. 70% are male. 43% have Masters degrees or above, or EMBAs. On average they own 3 cars and 4 watches. On average, millionaires leave China 2.8 times a year, and are away from home on business for 7.5 days per month. Their average annual holiday remains stable at 20 days. In their leisure time they like travelling, reading, and drinking good teas; their favorite forms of exercise are swimming and golf. They get most of their information from the Internet.

LUXURY SHOPPING & SOCIAL MEDIA

The Chinese luxury market is booming. Many international brands are expanding their investment in China and opening a lot of new stores, not only in tier one cities like Beijing and Shanghai but also in lower tier cities as well. The luxury category is broad and includes leather goods (bags), shoes, fine jewelry, watches, RTW (Ready-to-wear or prêt-à-porter) and accessories (sunglasses, belts and so on). Additionally, cars, hotels, cosmetics and service level products can be included and one thing holds true. Social media is a natural fit given the Chinese target audience is all digitally connected and is actively engaging with social media. With China having representation of almost every Global luxury brand, it is not unexpected that most are turning to social media to create a brand awareness and try to engage with Chinese consumers. The simple fact is that many brands will fail to gain traction in such a crowded marketplace where consumers are becoming increasingly skeptical and loyalty with a particular brand is transient at best.

SHIFTS IN CHINESE ATTITUDES TOWARDS LUXURY

•  New Money •  Low customer sophistication •  T1 is all that matters •  Straightforward customer journey •  Focus on status •  Big names rule the game •  Western dividend •  Wives + Business men drive the market •  Building a retail footprint

•  “New old money” + Growing Money •  Customer sophistication on the rise •  T2 + the new Eldorado •  Complex customer journey •  Focus on differentiation •  Niche brands now matter •  Localization is key •  Arty youth + Power women set the tone •  Building a retail experience

OVERSEAS LUXURY PURCHASE

As ever larger numbers of Chinese consumers travel overseas, they recognize that certain luxury products are significantly cheaper abroad. For example, a Prada bag is 12,600 RMB in Beijing but it only 795 EUR (7,398.75 RMB) in Europe. With the new tax policy, the price difference between the Chinese mainland and abroad makes International purchase an attractive prospect. Australia & New Zealand are becoming increasingly popular shopping destinations for Chinese consumers given Duty free shopping (DFS) and tax (GST) refund programs.

SOCIAL CHALLENGES FOR LUXURY BRANDS

The pace at which negative sentiment/stories travel within Chinese social networks has taken many by surprise in the past and now many brands have taken to 24/7 social listening and monitoring. A few more proactive brands have even created crisis protocols with preapproved content and landing pages so that a rapid response can be made given a particular brand crisis.

Brand Crisis Management  

Social Media Management  Simplify establishing an account on a Chinese social media platform is not adequate. Creating effective fan acquisition and content programs are critical to ensure people visiting your page or engaging with your content receive a consistent brand story. Additionally, having appropriate key opinion leaders (KOL’s) work in partnership with your social program will create a bridge to their fans and lead to wider reach.

Go beyond sales, build relationships

For luxury brands looking to engage with Chinese consumers, social media offers one of the best and most effective medium in reaching a broad audience. That said, many luxury brands have failed in developing their social brand, fan acquisition strategies and content programs.

CHINESE SOCIAL MEDIA  

Kaixin

Sina Weibo

Tencent Weibo

Youku/Tudou

WeChat/weixin

Meilishuo/Mogujie

JiePang

Douban

Early star, now dying. Not worth incorporating in a social media program.  

Significant reach across all of China and important platform for any social media program.  

Strong audience in T2 cities  

Critical platform for video storage.  

Rising star, good for O2O & targeted fan engagement  

Under utilised with good potential  

Good platform for O2O campaigns. Location based check-ins  

An SNS website for blogging

STRATEGY 1: LISTEN

Brand Research: Louis Vuitton leads the luxury market’s online discussion in China. Chanel commands high buzz volume and positive sentiment. Category Overview: ‘Leather Goods’ (Bags) - the most discussed luxury category in China. Influencer Overview: The top 20% of netizens contributed 80% of the content in luxury category. There are 4 types of luxury influencers shaping the conversation: Shopaholic, Style Guru, Fashionist and Brand Fan.

Many brands already incorporate social listening and monitoring into their social media programs. If you have not got an active listening program then you are missing significant inputs to your strategy.  

STRATEGY 2: KNOW & UNDERSTAND China’s has a unique cultural context. For example, ‘shai’ 晒 (showing off) is very popular in Chinese luxury & fashion BBS communities, accounting for an average of 90% of the

comments about luxury brands.

Globally speaking, China is positioned as ‘in the show’ stage of luxury consumption, going

through different stages of shai. Product Shai, True Man Show and Lifestyle Shai. Overseas purchase and purchasing agents (i.e. Daigou 代购) are also hot topics.

Live broadcasting from fashion shows is a new way for Chinese netizens to keep in touch with

the latest fashion trends. Now ‘runway broadcasting’ is popular via microblog, incorporating pictures, videos and real-time interaction.

Chinese luxury consumers are categorised in four groups: Aspirational Buyer, Quality Pursuer, Status Seeker and Trend-Setter.

STRATEGY 3: PARTICIPATE

The microblog (weibo) offers brands a platform that is not only for listening but also for

actively participating in the online conversation. Think beyond single platform. There are numerous engagement strategies that brands can employ to participate in the conversation, including leveraging celebrities’ massive social reach to spread the brand culture. Brands should track social media accounts carefully to ensure they create content that resonates with netizens and is appropriate for the brand’s voice. Central to microblog engagement and any Chinese social media participation is a tone of

voice befitting your brand culture. So, luxury brands must find the luxury voice in social media.

ABOUT DIGITAL JUNGLE

we are a specialist, digital marketing Agency that works with Western organizations to market to a Chinese audience; living in China or abroad.

BEIJING SHANGHAI AUCKLAND SYDNEY

www.digitaljungle.com.cn