In the “Chinese Whispers” column, we share the biggest news stories about the luxury industry in China that haven’t yet made it into the English language.
In this week’s edition, we discuss:
- The new e-commerce feature of WeChat’s Moments Ads,
- Chanel’s new Shanghai pop-up store, and
- Chinese tech firms’ support for emerging fashion designers.
On April 12, China’s top social media platform began allowing users to purchase products or visit online stores by clicking on ads in their Moments feeds. Placing ads in WeChat Moments, a feed of images and text similar to Facebook, have long been perceived as one of the most effective ways for brands to engage with Chinese consumers. Chinese fashion media outlet No Fashion views the move as a threat to e-commerce giant Alibaba’s core business.
Starting as a closed ecosystem that was known for being ads-averse, WeChat has become much friendlier towards brands and retailers. Earlier this year, the app quietly launched a new feature named brand zone, which allows brands to share their official WeChat accounts, boutique stores, and other customized content with users who don’t subscribe to their content. Earlier, WeChat also lowered the threshold for brands to place ads. WeChat is beyond popular, perceived by many Chinese as necessary, so Tencent's efforts to cash in on their app are unlikely to lose them users in the short term.
Riding on the fever of pop-up retailing in China, French luxury powerhouse Chanel opened a game center in the trendy department store Shanghai K-11 on April 14. The Coco Chanel-themed game center has all kinds of games, including a crane machine and a racing game. The pop-up arcade will last until April 23, with only customers who have made appointments allowed to visit.
As Chinese consumers increasingly look to get unique experiences and a means of self-expression from their shopping activities, many brands have embraced retail pop-ups as a way of experimenting with new kinds of commerce. Research shows that the compound annual growth rate of pop-up retailing has been over 100 percent since 2015 and that by 2020 there will be over 3,000 pop-up stores open at any one time in China.
An increasing number of tech companies in China have started to work with local fashion designers in recent years to co-design fashion products and collections. However, their goal is not selling these designs for profit but raising public awareness of their own brands. According to Jin Yudong, VP of Visa Greater China Region, fashion is something tech brands can use to ignite the passion of millennial consumers.
The intermingling of the fashion and technology sectors is growing day by day. For fashion and luxury brands, technology also serves as a powerful marketing tool. Technologies such as augmented reality and virtual reality have been widely adopted by retail brands to create brand new customer experiences.