5 Chinese New Year Resolutions for Luxury Brands on WeChat

In January this year, thousands of developers gathered at WeChat's Annual Conference in Guangzhou, anxiously waiting for Allen Zhang (张小龙 ), the creator of WeChat, to disclose the new features coming to the most used app in China. We spoke with four strategiests who help brands with WeChat about what the new announcements will mean for luxury brands in the Year of Dog. 1. Create Better, More Original Content One of the biggest announcements from the conference is that WeChat is going to launch a separate app for Official Accounts, typically used by brands, which will allow readers to access content more easily and for operators to better manage their content. However, Zhang pointed out, there will be no Facebook-style newsfeed for subscription accounts. This is because the WeChat team truly believes in creating a decentralized system so that users can decide which content they want to view. “This puts pressure back on brands to create consistent, great content,” said Preeti Kumar, Head of Digital Strategy at 31Ten. Though WeChat said they will continue to refine the search feature, it’s not clear how the search algorithm in WeChat works. Brands can't game the system, so they need to create quality content that readers will seek out and share. While brands should be getting their content right before it is published, WeChat now allows for corrections of up to five Chinese characters on Official Accounts, enough to fix typos, if not factual errors. Kumar sees this as a small but important step in enabling brands to enhance the quality of their content. Jenny Chen, the Marketing Manager of WalktheChat, believes the introduction of WeChat-native stores that run as Mini Programs within the app will be less important to sales than quality content. “Content and marketing campaigns will remain the key driver for e-commerce sales for luxury brands,” she said. 2. Ensure My Mini Program Strategy is Omnichannel There has been an explosion in WeChat mini-programs since the capability was established last year. Look at the data: there are now 580,000 mini programs, with a combined 170 million daily active users. Offline is the key playground, and it is where luxury brands can build an emotional connection with their consumers. In the Year of the Dog, “WeChat Mini Programs will be part of an overall omnichannel approach that has evolved for luxury brands,” said Jeff Fish, CEO of TMG Worldwide, a New York-based agency that helps global brands connect with customers on WeChat. He gave the example of QR codes included in retail spaces to seamlessly incorporate digital content. Meanwhile, Kumar emphasized Mini Programs should be used for more than just sales. “It could also be used for enhancing the overall user experience by providing exclusive access, convenience, and customization possibilities.” She gave the example of Longchamp’s Mini Program that allows consumers to customize their tote bags, and Tesla’s Mini Program that provides drivers with information about charging stations. Stepping back, Chen saw not just luxury retailers including more digital content in stores, but also tech companies leading bricks and mortar retail. “Both Alibaba and Tencent are focused on acquiring big retail stores and retail brands in 2018. We can expect both companies to restructure retail organizations and aggregate the data from both retail shops and e-commerce stores.” 3. Take Advantage of Better Ad Data Advertisers have complained how little data WeChat Ads provides, making it harder for them to target specific audiences. Fish from TMG said, “This is getting better every day. The team at Tencent has devoted significant resources to producing better targeting and more visibility into actionable intelligence.” However, their progress may be slow compares to their Western counterparts. “I would not expect WeChat ads to become as sophisticated as Facebook or Google this year,” said Chen. “Brands could consider other advertising platforms such as Toutiao, which have a lot of active users in second, third and fourth tier cities, making them an effective way for big luxury brands to expand their reach. And Toutiao is less strict on the requirements on overseas entities running ads.” 4. Ensure My Website's Store Accepts WeChat Payments Seventy percent of customers mentioned brands' own websites as their preferred online shopping destination because of the guaranteed authenticity and exclusivity, according to a China luxury consumer survey conducted by Bain in 2017. All four experts agreed the integration of official websites and mobile payment should be a major focus this year. “WeChat payments will be more systematically set-up on brands’ .com websites, giving a convenient and fast experience to Chinese consumers,” said Alexis Bonhomme, the Co-founder and General Manager of Curiosity China. “We have been assisting luxury brands in hospitality and hard goods sectors to integrate WeChat pay into their websites since last year,” added Kumar, “and the demand is only growing.” “Chinese customers are not used to inputting credit card information on websites, unless it’s JD.com or Taobao," Chen said. “And it's not just WeChat pay. Brands should also integrate Alipay to give the customer more China-Friendly options.” 5. Explore WeChat as a Customer Relationship Management Tool Bonhomme thinks WeChat could become a fully integrated Customer Relationship Management (CRM) tool in the Year of the Dog, connecting with brands' global CRM systems. Chen questioned if that is realistic this year. “Integration with global CRM will remain a a question since users behave so differently on WeChat,” she said. “Companies might as well establish a local team to carry out their China social media strategy.” “Our focus has been on integrating [CRM service] Salesforce for brands, and treating WeChat as the main channel for China, but just one of many channels globally,” added Fish. He gave the example of a luxury brand whose sales associates invite customers to join a rewards program, have them scan a QR code to follow the brand's official WeChat account, then track then add the customer to Salesforce for managing personalized communication. Using WeChat as a CRM tool can help "clients feel like members of an extended family,” Kumar added.

5 Chinese New Year Resolutions for Luxury Brands on WeChat

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Published February 18, 2018

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5 Chinese New Year Resolutions for Luxury Brands on WeChat