The digital gold mine in China Key opinion leaders and designers are playing a more important role
China’s economic slowdown and stock market slump have not deterred Chinese consumers from going on luxury shopping sprees, especially via emerging digital platforms, according to findings released at a luxury forum which took place on Dec 8 in Shanghai.
Held as a part of Luxury Society’s Digital Keynote series, the event also touched on topics including digital innovation and opportunities for luxury brands related to retail, mobile, video, social, advertising, branded content and big data.
The forum revealed that e-commerce transactions in China recently hit $2 trillion, more than 10 percent of total retail revenues, while 55 percent of Chinese Internet users make their payments using their mobile devices. Fashion brands in China know this all too well, seeing how more than 60 percent of their transactions are made using the Tmall mobile application.
According to audit, tax and advisory firm KPMG, up to 50 percent of China’s domestic luxury consumption will be via online sources from early as 2020, while Chinese consumers will account for as much as 35 percent of global luxury sales during that time.
Pablo Mauron, general manager of the Digital Luxury Group’s China office, said that an increasing number of luxury brands have been looking to establish a presence on third party e-commerce sites, seeing how consumers here predominantly use such platforms. He added that brands have created specific marketing strategies in China that emphasize a lot more on content creation and storytelling, saying that Chinese consumers tend to be more concerned about such information on social media platforms such as the messaging app WeChat.
“WeChat empowers the user like no other social network. Every company, without question, is trying to use WeChat to do business in China’s growing retail landscape,” said Mauron. “However, it is a difficult path to take. It’s very hard to pay for the exposure, and it’s difficult for users to engage with brand promoters.”
To learn more about luxury trends, Chinese netizens, especially WeChat users, tend to rely more on information disseminated by key opinion leaders such as fashion bloggers and designers. According to the preview of China Luxury Trends 2015, which was jointly issued by the Digital Luxury Group and Baidu Inc, such personalities are growing in influence as they now account for about 500,000 monthly web searches among Chinese netizens.
“Consumers are becoming more sophisticated and it’s not as easy as before. I think they are much more skeptical of promotional messages, and are more inclined to believe shared personal experiences and suggestions by professionals,” said Michelle Ye, a blogger and stylist.