5 things to look out for in the China luxury market in 2019

Michelle Ye, one of the first Chinese key opinion leaders, who has her finger on the pulse of the ever changing mainland market, shot to fame in 2010 by sharing her views about life in a blog, which attracted one million views in just 10 months. Photo: The Luxury Conversation

China’s unique and continually evolving market creates exciting opportunities.

Rather than try any crystal-ball predictions, here’s my summary of what this year can show us about the next, and what to look out for.

People in China asked about people in China

D&G – and the backlash over its promotional videos labelled racist and sexist, and anger over subsequent abusive comments by its co-founder Stefano Gabbana – should finally serve as the wake-up call for any brand “not listening” to their people who are in China.

As many of those we’ve interviewed have tried to clarify, your people in China need to have vastly more input into what you do in China.

How can any decision be made – not only in terms of marketing and communications, but any business sense – by those who do not understand a country?

It’s like asking your staff in Beijing to make the strategy for Brazil. Why would anyone do that?

Sustainability to mean something

As has been said, green is the new gold for affluent Chinese consumers.

It’s true that more businesses got involved with general Earth goodness in 2018, but telling your customers that you don’t use plastic or that you rent out bicycles for getting around town is going to get boring pretty soon (already).

If you assume that your customers want to be excited, want to engage, want the wow factor throughout your offer, then why not apply this same level of expectation to your eco-friendly efforts? “We don’t use plastic sometimes” doesn’t scream passion for the planet – and there is still an open path to victory for the brand that takes customers’ “green experience” up a few notches.

KOLs KPIs – not just ROI, FYI

Chinese blogger and KOL, The Sporty Bitch (above), has gained a huge following thanks to her forthright views about the reality of gym life and staying healthy while living a busy urban life.

Perhaps the most obvious rising expectation that brands could have of key opinion leaders (KOLs) is in direct return in investment (ROI).

Yet this is unlikely to become a blanket requirement that all brands have – some are satisfied with the branding, the image, the long-term hoarding-effect of a celebrity KOL.

Among the first Chinese KOLs was Michelle Ye.

She shot to fame in 2010 by sharing her perspective on life to her fans in a blog, which reached one million views in just 10 months.

She later launched her own highly successful fashion brand in 2015.

A more realistic expectation from brands will be that KOLs use not only their channels, but their creativity. A real KOL has her or his finger on the pulse, or whatever appendage on whichever body-part you find most metaphorically pleasing.

The brand-KOL collaborations that work best and are KPIs (key performance indicators) are those that are involved, cooperative and, sorry to say a buzzword, but with genuine synergy.

Amplifying apps (with synergy)

Smart brands, such as Singapore Airlines and Shangri-La Hotels and Resorts, are teaming up with key apps, such as online travel platform Fliggy, to help them connect with customers.

Just one more buzzword is needed – digital ecosystem – to talk about the reality of Chinese apps.

We now see smart brands using WeChat well – and very smart ones, such as Singapore Airlines (and recently Shangri-La Hotels and Resorts) teaming up with key apps such as the online travel platform Fliggy, to help them better connect with customers.

Chinese customers do not browse the internet for your .cn, they live in a mobile world of apps. Exploring and teaming up with these apps is the way to not only broaden exposure but engender trust with your Chinese audience – a crucial point for an overseas brand, even today.

In the next year we’ll see more strategic partnerships, and probably new players coming in to ever further expand the diversity of available platforms and ways to reach the target customer.

Personalisation realised

Asian consumers increasingly want to personalise all areas of their lives – whether it is taking selfies to remember foreign holidays of buying exclusive, limited-edition luxury products.

“A personal experience” is usually referenced as a key part of the luxury experience. Yet, in reality, this is often missing, or just means “good service”.

Real personalisation, be it engraved names, ability to choose and tailor from an enormous range of options, highly limited editions and so on, are all tools to implement in building the luxury finish.

With Chinese consumers, there is an added opportunity to “personalise” something specifically to special Chinese requirements: customers of MAIA Active the Chinese athleisure fashion brand responded very positively to the idea that their figures differ from “Western ones” and need differently (specially) designed clothing.

 Other brands should learn from this opportunity and, judging it carefully, personalise and specialise.

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This article was originally written by Nick Withycombe for  The Luxury Conversation .

What can the D&G scandal and other events this year, in the mainland’s ever changing market, tell us about the next 12 months, asks Nick Withycombe