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China’s growing ecommerce market appears to be helping to increase international luxury brands’ conversions, with high-end names like Coach and Gucci having made important investments in digital sales and marketing during the COVID-19 pandemic.
Data from the Ministry of Commerce showed that China’s online retail sales went up by 8.6% in the first quarter of this year, illustrating the prominence of the ecommerce industry in China.
Digitalisation was the biggest factor
The market in China has become ever-more digitalised, which is why digitalisation became a key factor contributing to the success of these international luxury brands in the country.
According to Zhou Ting, Head of Research at Yaok Institute, international luxury brands in China focused heavily on online retail in 2022. With moves including establishing online storefronts and setting up flagship stores on ecommerce platforms, an omnichannel marketing strategy was utilised by 44% of luxury brands.
These brands aimed to improve their social media presence, especially on platforms like Douyin and WeChat. “Digital clienteling” was another important aspect of their omnichannel strategy, this term referring to creating connections with customers over such platforms for a personalised experience.
Live streaming appeals to the younger generation
American luxury brand, Coach, has said that it utilises more than 30 live streaming stations in its stores in China, as it seeks to appeal to Gen Z audiences. Live streaming has become a popular trend on Chinese social media platforms – influencers and live streamers sold over 34 million types of products on ecommerce platforms and garnered 360 billion views in just the first three months of this year.
Collaborations with powerhouse multimedia companies such as Tencent also seem to show potential for appealing to younger-generation shoppers, alongside the use of innovative technologies. For instance, Coach launched a digital art store in Beijing, showing a 3D animation video of its products.
Coach’s focus on the Chinese ecommerce market has seen success – its net sales in Greater China skyrocketed 48% from 2020 to 2022, amounting to $892 million.
Online marketing paves the way to the Chinese market
It’s no surprise that online marketing has a number of advantages that any brand can reap, but for luxury brands like Gucci which powered through the pandemic with their online marketing, they are still reaping the windfall today.
Gucci Beauty launched a WeChat mini-programme that allowed users to ‘try on’ different products by taking a selfie, essentially letting them see what the brand’s makeup could look like on their face. This helped users to match products to their skin tone, and more. Its parent company, Kering, saw an outstanding 83% growth in sales revenue in the Asia-Pacific region in 2020.
To summarise, the Chinese ecommerce market shows great growth potential for international luxury brands, with an expected 7% industry growth as a result of Chinese nationals’ spending on luxury goods. And the main driver behind this growth? Digital sales and online marketing.
As a luxury digital marketing agency, Skywire London can help your brand thrive as well. Get in touch to learn how we can help maximise your high-end brand’s potential this year – and beyond.
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