What Happened: To be part of the online WeChat group called “Shanghai Debutante,” all you have to do is pay the 500RMB entry fee, which is about $75. This gives you access to be part of a growing group of people who split the cost of a fancy hotel, restaurant, or handbag with other members. Then, as a group, you go and take pictures of each other to add to your social media. A recent article on the group when virtual on Chinese social media, with the author going undercover to scope out their buying behavior. For example, in one group, a few young girls split the cost of renting a pair of Gucci pantyhose and shared custody, while another version of the “Shanghai Debutante” group doesn’t even require a physical presence. A group organizer would simply post fancy lifestyle shots of food, wine, or travel in the group chat for other members to repost them on their own social media channels.
Jing Take: People purchase luxury products and services for various reasons — the design, craftsmanship, and the social recognition that come with the label. However, in order to purchase high-ticket items, options such as group buying and deferred payment are gaining popularity among price-sensitive consumers. Whether it’s Buy Now, Pay Later or purchase in large quantities at reduced prices, or even the “Shanghai Debutante” approach of splitting the cost, the Chinese luxury market is witnessing a host of more diversified payment options to inspire consumption.
According to a report by 58 Finance in June 2020, Alipay Huabei, JD Baitiao, and Suning Renyifu have the highest penetration — around 79 percent — of China’s installment payments with consumers in the first half of 2020. Moreover, several domestic players like Meituan and Dianping have jumped on this trend a decade ago, emulating the US-based online marketing company Groupon. Alibaba had also created a group buying platform called Juhuasuan in 2010. With all these extended payment options, it’s becoming increasingly harder for the younger generations of Chinese consumers to defer their dreams and enjoyments like their parents’ generation once did. They want it all and they want it now. Given this, self-organized collective buying schemes like “Shanghai Debutante” might just be the start of a new, and possibly profitable, business model.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.