In China, Luxury Must Bridge Digital and Physical Like Never Before

    Today, virtually every digital holdout in the luxury industry has dropped any suspicion towards e-commerce and digital marketing.
    Louis Vuitton's recent S/S 2022 women's show in Shanghai racked up nearly a billion hashtag discussions on Weibo. Image: Courtesy of Louis Vuitton
      Published   in Finance

    Key Takeaways:#

    • In-person events must adapt to the demands of younger Chinese consumers, who increasingly demand immersive and engaging content from luxury brands.
    • Recent events held in Beijing and Shanghai offer successful on-and-offline marketing blueprints for the year ahead.
    • Today, it is critical for luxury brands to effectively incorporate both on- and offline touchpoints at physical events.

    Over the course of the nearly two-year-long COVID pandemic, virtually any digital holdouts in the luxury industry have cast aside suspicion towards e-commerce and digital marketing, particularly in China. Today, Tmall Luxury Pavilion — the Chinese e-commerce giant’s luxury-centric portal — claims to host official storefronts for more than 200 brands, among them illustrious names like Hermès, Cartier, Saint Laurent, and Gucci that, just a few years ago, looked unlikely ever to embrace mass e-commerce.

    Meanwhile, despite an ongoing crackdown on celebrities and the hyper-influential “fan economy,” luxury brands continue to sign largely Gen Z brand ambassadors who boast legions of digitally native fans who constantly interact with brands (and fellow fans) on domestic platforms like Douyin, Bilibili, and WeChat. Yet an interesting phenomenon has emerged in China over the course of the COVID pandemic, by which offline events and physical retail have become arguably more important for luxury brands, both as a consumer touchpoint and a sales driver.

    In-person events restarted in China relatively early on. In August 2020, Louis Vuitton was among the first luxury brands to hold a large-scale event, in its case an outdoor runway show that bridged the gap between online and offline via a heavily publicized livestream and full-court social media press. Soon after, Prada held an exclusive site-specific event at its Prada Rong Zhai space in Shanghai in collaboration with filmmaker Jia Zhangke, which saw around 2,000 VIPs pass through the venue over the course of two days of exhibitions, talks, and parties.

    Since then, in-person events have fully returned as a key marketing vehicle in mainland China. For brands, this comes down to two highly practical reasons: a worsening COVID situation in key markets like Europe and the fact that Chinese shoppers — largely unable to take international shopping trips this year — are spending significantly more at domestic luxury boutiques in spite of Xi Jinping's intensifying "common prosperity" push. Over the course of 2021, brands have increasingly sought to experiment with offline events in China, branching beyond simple catwalk shows and incorporating trends like immersive theater. In the case of Valentino’s fashion-and-theater collaboration with Sleep No More Shanghai in September, almost 70 percent of invited clients made pre-event purchases.

    Art'N Dior bridged luxury branding and tech via a collaboration with Huawei. Image: Dior
    Art'N Dior bridged luxury branding and tech via a collaboration with Huawei. Image: Dior

    More recently, we have seen a spate of offline luxury events that indicate an evolution of physical and digital marketing approaches in China, among them Louis Vuitton’s Spring/Summer 2022 womenswear show and Dior’s "Art'N Dior" exhibition, both held in Shanghai.

    With the recent Shanghai installment of its Women's Spring-Summer 2022 Fashion Show, Louis Vuitton showed that it remains one of the best in class in terms of on- and offline marketing in China, balancing the traditional premium it places on lavish, exclusive events with the democratizing effects of livestreaming and social platforms. Coming on the heels of the collection’s premiere during Paris Fashion Week, the Shanghai show — festooned with dozens of ornate chandeliers — succeeded by ensuring it offered something unique for local audiences, in its case 19 products designed especially for the China market.

    The strategy worked. According to Louis Vuitton, the livestream of the event was viewed a total of 158 million times on Weibo, WeChat, Tencent Video, Douyin, Kuaishou, and OTT. Days later, Chinese-language media noted that the video of the Shanghai show ultimately racked up more than 100 million views, while the Weibo hashtags #LV春夏22女子秀# (Louis Vuitton S/S 2022 Womenswear Show) and #LV大秀# (Louis Vuitton big show) were used nearly one billion times in total.

    Taking the fashion-and-art route, Dior’s sprawling “Art'N Dior” exhibition, which launched this month at the West Bund Art Center in Shanghai, made sure to include a strong digital component to accompany its collaborations with domestic artists like Wang Yuyang, Li Songsong, and Zhang Heng. For the event, Dior also collaborated with Chinese tech giant Huawei to create the virtual reality film "My Cherry Blossom Land,” giving attendees a more immersive interactive experience. Like Louis Vuitton, Dior also opened the experience up to at-home audiences, making the film available to view on the Huawei Video app, Huawei VR Video app, and Huawei VR headsets. Despite a minor online controversy about photos by Beijing native photographer Chen Man exhibited at the event, to date the campaign hashtag #ART’NDIOR has garnered over 600 million views thanks to extensive celebrity endorsements.

    Last year, the key for luxury brands in China was to successfully (and safely) hold offline events they couldn’t hold elsewhere. But as 2022 approaches, audiences in China are accustomed to attending luxury events in real life, vicariously through livestreams, or — as in the case of “Art'N Dior” — VR. This means brands now need to rethink what event success really means. Does it mean pre-event sales, in the vein of Valentino x Sleep No More Shanghai, long-tail video views in the vein of Louis Vuitton's S/S 2022 women’s show, or envelope-pushing tech like Dior’s Huawei collaboration?

    The answer will depend on the brand, its willingness to experiment and invest, and potential applications on the global level. Although China may be the fastest-moving luxury market, it’s only a matter of time until other key markets catch up and consumers have very similar demands from the brands they follow.

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