How Loewe gets China right

As luxury’s flop era continues, Loewe is beating the odds. The Spanish leather goods and ready-to-wear brand is bucking the industry’s downturn with sales for the 2023 financial year surging by 30% YoY to 810.8 million euros ($873,3 million), according to owner LVMH. The conglomerate’s Q3 results, posted last month, show that Loewe was one of few subsidiaries that has managed to maintain “solid momentum” this year. The maison, which was crowned the world’s hottest brand by Lyst in July, before being overtaken by Miu Miu last month, has achieved impressive growth across Asia in recent years. LVMH is yet to disclose specific figures regarding its most recent growth spurt, but, in 2021, Loewe’s Asian market sales surged 55% YoY to 141.1 million euros ($151.9 million), contributing to its overall sales of 456.2 million euros ($491.3 million). “Loewe truly has a unique position,” says Lucrezia Seu, founder of Shanghai-based consultancy Plush.Consulting. “It has a distinctive design aesthetic powered by good quality craftmanship, versus resorting to logo overexposure, and sits mostly at a strategic price point compared to competitors.” Social presence Social media has helped drive Loewe’s local impact in China. In Q2 of this year, the brand shot up to sixth place in ReHub’s Compass Index, a benchmark that looks at how brands rank among competitors and charts marketing impact across key social media channels in the mainland. The index cites Loewe’s “Crafted World” exhibition in Shanghai, hosted in March, as a key online engagement catalyst. A Loewe employee, who requested anonymity because he is not authorized to speak to the media, attributes success to Xiaohongshu as a highly impactful channel. Loewe has 177,000 followers on the app, where it regularly posts tailored content designed to pull in the country’s chronically-online Gen Z. Likewise on Douyin (TikTok’s Chinese counterpart), where it hones in on domestic interests, such as its Chinese ambassadors Yang Mi and Wang Yibo, to maintain a local focus. Beyond marketing efforts, the brand is harnessing Chinese applications to help streamline the purchasing process for locals. According to the insider, Loewe’s recent partnership with WeChat enables client advisors to “utilize the app as a working tool in China.” Celebrity influence Loewe owes much of its Asia presence to its glittering roster of brand ambassadors. While competitors have trailed in recognizing the impact of the region’s VIPs, the brand was proactive in snapping up big names to boost its cachet. Loewe first made inroads into Asia’s celebrity sphere by naming the members of K-pop group Nmixx as global ambassadors in September 2022, alongside Chinese actress Tang Wei. K-pop star Taeyong (Lee Tae-yong) was appointed in June last year, closely followed by Chinese actress Yang Mi in September the same year. More recently, in June, Chinese multi-hyphenate Wang Yibo joined up as the latest global brand spokesperson, a move that greatly strengthened the brand’s foothold in the market. The Loewe employee says that bringing in buzzy homegrown stars has been an effective conduit for introducing newer generations to the brand. Olfactory preferences The brand is also investing in understanding China’s scent preferences to tailor its domestic fragrance offerings. “Our Chinese clientele gravitates toward fresh, citrusy, and lighter scents,” the insider says. “This contrasts with the stronger, warmer, and deeper notes preferred in markets like the Middle East and Europe.” Loewe’s latest 2024 launch highlights its focus on China: the Prado fragrance, inspired by Madrid’s Museo del Prado, combines chamomile, clary sage, cassis, and lychee notes. Moreover, items from its Textura range, a new line of scented candles featuring three floral-inspired scents of mimosa, tuberose, and dendrochilum orchid, arrive in their own artisanal ceramic and granite pots. Its “Tomato Leaves” candle has also been a hit. The product was a Tmall bestseller during this year’s Double 11 (Singles’ Day) sales bonanza, with over 10,000 units sold. Since the launch of Loewe Perfumes in 2016 with the debut of its scent 001, also known as “The Morning After” (事后清晨), the fragrance has remained a top seller on Tmall. Responding to sustained demand, Loewe opened its first dedicated fragrance boutique at Nanjing’s Deji Plaza in 2022, marking a major milestone in its China strategy. That same year, Loewe collaborated with ambassador Leo Wu to introduce a cucumber-scented candle, reinforcing local preferences for clean, refreshing aromas. Strong ties High-profile collaborations, like last year’s Studio Ghibli collection, have boosted Loewe’s visibility, while niche activations continue to strengthen ties with its Chinese audience. These efforts have also resulted in a more “consistent and evident presence in the [China] market,” says Plush.Consulting’s Seu, referring to the Crafted World exhibition as a case in point. “It was a wonderful activation as it provided a deeper look into the brand’s history, heritage and most importantly their core focus on craftmanship,” she says. “It was also free of charge, so it not only attracted fans, but the general public.” For this year’s Mid-Autumn Festival (September 17), Loewe flexed its cultural nous by launching its own mooncake collection. The holiday gift set, reserved for VIPs, featured China’s traditional spinning top talisman (tuo luo), alongside a basket made using a classic bamboo-weaving technique. Over the past five years, Loewe has been immersing itself in the practice of Chinese craftsmanship “to promote the brand’s perspective of slow fashion, art, tradition, and respect of the Chinese culture,” says the brand insider. A key element of this playbook involves paying tribute to local festivities, such as Chinese New Year. In January, the brand unveiled a special collection alongside master jade carvers Cheng Lei, Qiu Qijing, and Yin Xiaojin featuring five hand-carved jade pendants. The capsule was sold exclusively at Loewe Casa flagship stores in Shanghai, Beijing, and Chengdu. On occasion, these exclusive offerings are also made available in selected cities such as Paris, Barcelona, and London, “where Chinese consumers are important business drivers,” says the employee. An international presence in popular locales for Chinese shoppers, especially in the US, has further boosted appeal. “There’s a collateral key factor in Loewe’s China expansion and its US expansion,” says the insider. “Many Chinese customers have families in the US or are often visiting the main cities. The brand’s presence in the North American market is key for new Chinese clients, who see Loewe as a ‘must buy’ brand when they travel to the West. Consequently, it makes Loewe a priority option when they come to buy from Western luxury brands in China.” Challenges ahead Loewe may still reign as one of luxury’s buzziest brands, but future success isn’t guaranteed. In October, rumors began swirling over creative director Jonathan Anderson’s exit after industry insider Miss Tweed posted a tip-off on Instagram. Though unconfirmed, speculation is already mounting about Loewe's future trajectory. Under Anderson’s purview or not, what can Loewe do to sustain its China hot streak? Seu thinks it’s a matter of “if it ain’t broke, don’t fix it." “[The brand] should continue honoring and respecting their customers, like avoiding sudden price hikes,” Seu adds. “It should also maintain a level of cultural involvement, by continuing to pay homage to local artistry and artisans.”

How Loewe gets China right

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Published November 08, 2024

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How Loewe gets China right