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JD's earnings 2020 Q4

JD’s Expanding Empire Offers Lessons on E-commerce

Look no further than JD.com to see the scope and staying power of online shopping — and why luxury brands need to make the shift.

On March 11, China’s leading e-commerce company posted a 31 percent jump in fourth quarter revenue, as consumers continued to buy online even after the country had largely returned to normal. Revenue for the three months totaled $34.4 billion, beating Wall Street expectations, while the full year of 2020 rang in at $114.3 billion. 

“JD saw accelerated revenue and user growth during the fourth quarter driven by our long-term operating philosophy and customer-centric value proposition despite the ongoing market challenges,” said CEO Richard Liu in a statement.

Over the year, annual active customer accounts surged 30 percent to 471.9 million. This comes as JD.com expanded its luxury brand offerings to win over Tier 1 and 2 buyers, with Hermès Group’s shoe brand John Lobb, fashion label JW Anderson, and the Italian luxury lifestyle brand Stefano Ricci, among others launching flagship stores on the site. Additionally, JD.com partnered with Prada and Miu Miu to integrate inventories and bring a wider selection to its online customers, including exclusive items from physical stores. 

Overall, this retail segment made up the biggest chunk of JD.com’s total revenue, pulling in $31.9 billion.

On the other end of the price spectrum, JD also strengthened its presence in lower-tier cities through its shopping platform Jingxi, which was launched in 2019 to stave off rivals Alibaba and Pinduoduo. As price-sensitive consumers in Tier 3-6 cities tend to act on social prompts from friends and make impulse purchases, the app incorporates livestreaming, group-buying deals, and product trial services to facilitate their e-tail journey.

Beyond acquiring new users, JD also focused on diversifying its business to drive long-term growth. The fourth quarter saw several wins for the company, including the IPO of JD Health on December 8 — no doubt riding the COVID-induced online healthcare boom — and the submission of JD Logistics’ listing application to the Hong Kong Stock. 

These efforts not only build a strong momentum going into 2021, but also stress the tech giant’s bet that the e-commerce trend is here to stay.

Loewe Content Commerce A Show In The News

Loewe Turns a Content-Commerce Page With “A Show in the News”

Perhaps more than any other luxury brand, over the past year Madrid-based, LVMH-owned Loewe — led by its prolific creative director, Jonathan Anderson — has recast the Covid-19 pandemic as an opportunity to re-evaluate the traditional relationship between brand and consumer. While peers have largely rushed into a “new normal” that is very much like the old normal — with the likes of Louis Vuitton holding physical runway shows last summer — Loewe has sought to build a more timely and intimate connection with customers and media alike by turning to livestreamed events as well as “shows” designed to be explored and enjoyed by those kept at home by extended lockdowns.

First employed last July through the company’s “Show in a Box,” a collaboration with the Paris-based design agency M/M that debuted the Spring/Summer 2021 men’s collection, Loewe next used the “at-home runway” concept in its “Show on the Wall” in October, which included such items as full-sized posters of the women’s collection, sheet music for Thomas Tallis’s 1570 choral work Spem in alium, a roll of wallpaper created by artist Anthea Hamilton, and glue, scissors, and a paintbrush with which to hang said wallpaper.

Loewe “Show-on-the-Wall” (October 2020)

Loewe “Show-on-the-Wall” (October 2020)

Most recently, with Loewe unable to hold its planned Autumn/Winter 2021 women’s runway show in Paris, the brand released “A Show in the News,” a clear distillation of the content-commerce concept contained in a small metal box emblazoned with the brand name and the date of its release, March 5, 2021.

Presented in the form of a full-size, 64-page newspaper boldly headlined, “The Loewe Show Has Been Cancelled,” “A Show in the News” debuted the new collection (modeled by Danish model Freja Beha Erichsen and photographed by frequent Loewe collaborator Fumiko Imano), with an excerpt from the newest Danielle Steel novel “The Affair,” and outlined creative director Anderson’s many inspirations for Fall/Winter 2021. (Noting, in one passage, how “fashion is about a moment in time, inherently connected to a daily newspaper, which serves as a record of the ‘now.’”)

The newspaper was complemented by inserts promoting the collection in “real” publications like France’s Le Figaro and Le Monde, Spain’s El Mundo, The New York Times, The Times of London, and Japan’s Asahi Shimbun. In addition, the box included a Loewe-branded bone folder, with which readers were invited to assemble an included excerpt of “The Affair,” as well as a leather mat mounted with a limited-edition woodblock print inspired by a passage from Steel’s novel.

Despite lacking the typical path-to-purchase embedded in most successful examples of content-commerce (the collection will not be released until this coming August, after all), “A Show in the News” is nevertheless a flawlessly executed example of the format, and one that will play as well in China as it will in Europe or North America. Unlike the virtual content-commerce that has become a staple of the luxury business in the past year (which has seen most brands simply roll out livestreams with links to buy via e-commerce), Loewe’s latest “show” merges the two- and three-dimensional.

LP_FW21WS_Newspaper2_3000x2250.jpg

Recipients of the box are invited to peruse the newspaper and explore the new collection while interacting with the brand via tactile objects that nod to the brand’s deep roots in leather goods. As was the case with the “Show on the Wall,” “A Show in the News” attracted headlines and interest in China, powered by a select few influencers who received the box and showed it off on platforms like Xiaohongshu.

This post originally appeared on Content Commerce Insider, our sister publication on branded entertainment.

H&M Simone Rocha Collab China Crash Site

Fairytale Ending for Simone Rocha’s H&M Collab

What Happened: Irish designer Simone Rocha’s long-awaited collaboration with H&M simultaneously crashed the Chinese version of the fast-fashion retailer’s website, WeChat mini-program, and app. The collection, featuring womenswear, menswear, and childrenswear, was released at midnight on March 11, when, for two hours, frustrated fans were unable to purchase A-line coats, tulle dresses, or ribbon & pearl-embellished accessories.

Pieces from the Simone Rocha x H&M collection. Photo: Courtesy of H&M

Before the release, a livestream on Tmall’s Hey Live platform promoted the campaign in China, as augmented reality pop-up books containing QR codes were being mailed all around the world to enable influencers to enter a Simone Rocha x H&M portal.

The Jing Take: H&M’s high-profile design collaborations always do well, and many sell out, which adds to their appeal. This time, it hit the sweet spot by tapping Rocha’s whimsical, feminine designs and fairytale aesthetic, which are so beloved by Gen-Z consumers.

Recommended ReadingH&M Has Just Done What?By Gemma A. Williams
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A vast number of fashion KOLs who align with this girly brand promoted the collection in the run-up to the release, from actress Song Zuer (@宋祖儿lareina, 15 million fans) to @SunnieLovesFashion (four million devotees). Minibazaar devoted a digital cover page to actress Mao Xiaotong (@毛晓彤, 19 million followers) who wore a piece, while @Real阿兰 (six million fans) also graced the pages of the digital magazine wearing choice pieces.

This strategy worked beyond belief, crashing the site (for which H&M apologized) and generating over 8.67M views and 11,000 discussions on Weibo. But for some dismayed and fiercely loyal fans, it worked a little too well, and the thought of not being able to buy an item sent them into freefall. Some even threatened to sue H&M. Disgruntled fan @好爱宅的kitty君 asked: “Is it just for KOLs and celebrities? We don’t deserve it?” Unfortunately, it seems not everyone can be a Disney Princess.

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.

Hermès Blush Asia Exclusive

Hermès Courts Asia With Exclusive Blush Shade

What Happened: Following the launch of its lipstick-focused beauty line last year, the French fashion house is back with a new range of blushes. The upcoming collection, named Rose Hermès, promises eight Silk Blush shades that draw inspiration from the iconic Hermès silk scarves. Most excitingly, the Maison is paying particular attention to Asia this time by offering the exclusive shade Rose Poivré, which it describes as “a pink of a Persian night enveloped in spices, vibrant yet discreet, soft, and elegant.” These blushes, along with two brushes, a blush case, and three lip enhancers, are set to release on April 15.

Silky Blush in Rose Poivré, available exclusively in Asia. Photo: Courtesy

The Jing Take: Considering Asia’s pivotal role in Hermès’ post-pandemic recovery, continuing to court these consumers is a smart move. In the fourth quarter, the Birkin bag maker beat expectations, with sales rising 16 percent from the year prior, driven by 47 percent growth in Asia. And these figures don’t even reflect the nice boost the brand got after its Guangzhou store reopened in April, amassing $2.7 million in sales in one day.

As Hermès noted in its earnings report, “the reduction in tourist flows was offset by the loyalty of local customers.” To foster this loyalty in China, the brand expanded its physical footprint, from doubling the size of its Harbour City location to repositioning its Dalian store to live inside the dynamic Times Square Shopping Center. Hermès also recently partnered with Exor to take Shang Xia, the Chinese luxury company it co-founded, to new heights. The move reaffirmed the brand’s commitment to the local market as well as its ambitions to boost Chinese fashion worldwide.

Recommended ReadingAre Chinese Netizens Ready for Hermès Beauty?By Wenzhuo Wu
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With its iconic products already loved as both status symbols and financial investments, Hermès now stands to gain from China’s beauty boom. According to Goldman Sachs, Mainland China’s beauty market was estimated to reach $65.75 billion by 2019 and grow 12 percent to over $150 billion by 2025. Because beauty products are easier entry points into the luxury world — compared to, say, a five-figure Kelly bag — Hermès’ makeup venture could help bring in new customers from China’s rising middle class. But with several strong C-beauty competitors and other global brands like Aesop eyeing the market after China’s animal testing requirements were dropped, Hermès will have a lot of ground to make up.

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.

Paris Fashion Week Jing Daily Score 2021

Paris Fashion Week Embraces Chinese Talents

Next up, it’s Paris’ turn, as the Jing Daily Fashion Week Score, which evaluates how a brand’s collection resonates with Chinese audiences, focuses on the last stop before Shanghai on the Autumn 2021 fashion week calendar.

Paris Fashion Week featured a flurry of inventive content, the highlight of which was an ambitious Weibo livesteam from Hermès that connected Shanghai to top fashion cities like New York and Paris. Events like these have been firmly placing China into the stratosphere of fashion capitals with those global counterparts. In fact, Dior confirmed the country’s presence when its one-hour livestream starring Chinese ambassador Angelababy drove over 12 million views after its release on Weibo.

Meanwhile, China’s new importance on the fashion schedule is also forcing brands away from runway shows with models of the same shape and color. So how did they do in Paris?

The Jing Daily Fashion Week Score is based on the following parameters:

  • Model representation: evaluates representation of Chinese models on the runway.

  • Digital impact: evaluates Chinese netizen reception and engagement on leading social media platforms, including Weibo, WeChat, and Little Red Book.

  • KOL & celebrity visibility: considers the star power associated with strategic KOL and celebrity partnerships.

  • Special brand efforts: considers special programs or efforts on a brand’s part to speak to the Chinese audience. Company or brand contributions toward the on-going virus crisis are also considered.

  • Design context: a qualitative assessment of how the brand’s collection will speak to the Chinese audience based on current trends and preferences.

  • Brand history: considers existing history in China, including overall presence, social reach, number of stores, earning trends, and missteps.

DIOR

This season, Maria Grazia Chiuri explored feminism through the lens of fairy tales, reinterpreting classic female characters like Cinderella, Little Red Riding Hood, and Sleeping Beauty. Disturbing Beauty was filmed in the Hall of Mirrors at Versailles and went live on WeChat Channel, Weibo, Douyin, Little Red Book, Bilibili, Tencent Video, and Xiaomi Video. The one-hour livestream featured brand ambassador Angelababy, singer Liu Yuxin, the fashion KOLs Mr. Bags and Becky Li, and editors like Cosmopolitan China’s Liu Yuewei and Harper’s Bazaar China’s Wei Tian. The combined following of 130 million drove 12.7 million views for the digital show in one day on Weibo. In addition to the livestream session, the brand posted two short-videos, “Dior Talk,” featuring Q&As with Angelababy and Liu Yuxin, respectively, which elevated the show’s social engagement.

LOUIS VUITTON 

Creative Director Nicholas Ghesquière presented at the Louvre in Paris together with the brand’s capsule collection, realized in collaboration with Italian Home Decor studio Fornasetti. The looks reinterpreted ancient greek sculptures — the Winged Victory of Samothrace, the Venus de Milo, and Discobolus, to name a few — in a modern way, accompanied by techno music in the background.

For Fall 2021, Louis Vuitton fully leaned on social media engagement by inviting Brand Ambassadors Liu Yifei, Dilraba Dilmurat, Zhong Chuxi, and Fu Qing — owning a combined of 159 Million followers on Weibo — to announce the show’s trailer. The campaign drove massive traffic to the brand’s Weibo announcement post, exceeding a million viewers from the beginning and reaching 12.6 Million by the end of it.

CHANEL

The legendary Left Bank nightclub Chez Castel was the setting for Chanel’s presentation. Distinct from the previous show spectacles at the Grand Palais, this season had a distinctly more intimate ambiance. To maximize the engagement of the digital show, the French house invited 14 celebrities, including brand ambassadors and partners worldwide, to capture the moments while waiting for the premiere. Among the featured faces were Chinese singer Victoria Song, supermodel Liu Wen, and Korean idols Jennie and G-Dragon, which all amassed substantial traffic for the campaign.

HERMÈS

Hermès’ creative director, Nadège Vanhée-Cybulski, chose to present Fall 2021 as a cross-continental triptych across three cities: New York, Paris, and Shanghai. It kicked off with a dance performance at the Armory in Manhattan, then was staged at the Garde Republicaine in Paris, and closed with Gu Jiani’s choreography in Shanghai.

The triptych was livestreamed on Weibo, gaining almost 6 million viewers. A collection preview in Shanghai had impressions totaling 50 million. At the center of all the attention was its iconic bag, the Birkin, reinvented as a 3-in-1: a standard bag, a tote, and a clutch.

MIU MIU 

Miu Miu’s show brought the audience to the snowy Italian Dolomites. The models, decked out in oversized ski suits paired with ski boots, were adventuring the summits and pursuing unknown destinations.

Miu Miu’s pre-show announcement was amplified by the Miu Miu Girl Yang Chaoyue, who shared the Weibo livestream invitation with her followers. The celebrity’s post was reposted over 235,000 times, driving over six million views to the show. This time, the brand relied less on media outlets and more on KOLs, successfully reaching a broader audience and more targeted consumers (Yang Chaoyue is widely recognized among netizens as perfectly matching Miu Miu’s brand DNA.)

MASHA MA

A regular on the Paris schedule, MASHA MA used this season to address the in-between state of gender fluidity, mostly conveyed through color: neutral tones, featuring a combination of lime, moss green, and foggy white, projecting the image of a modern woman. New, skin-friendly textile combinations pushed expectations, as well, mixing mohair and alpaca wool with rare fabrics and Asian motifs to produce a bespoke pattern which echoed her “rebirth” metaphor.

The show received media attention in China from fashion outlets such as Cosmopolitan China, Dazed China, Harper’s Bazaar China, which allowed it to reach a broader audience beyond the designer’s social following.

DRIES VAN NOTEN

For Dries Van Noten’s Paris outing, dancers took the place of models. The physicality of their movements contrasted with our stationary selves, locked down amid the pandemic; everything was alive with movement and dazzled, even the sequins on dresses that sparkled in the light.

The choice to put the collection on dancers’ bodies has received wide recognition among media circles and fashion experts, reaching a sensational 84 million impressions on Weibo. As usual, Dries Van Noten did not promote the new collection with any KOLs, thus driving remarkably less traffic to its Weibo account.

GIVENCHY

Matthew Williams’ combination of utilitarian and luxury was hardcore in Givenchy’s outing. Faux fur, Harness bras, and tantalizing avant-garde heels added an experiential twist to the streetwear wardrobe and hinted at the tensions between extravagance and frugality.

Social engagement in China was lower than with other brands, even though the house announced its two ambassadors, Fan Chengcheng and Ouyang Nana, days before the show. Givenchy failed to leverage celebrity power to reach its Chinese audience and communicate the creative director’s design language with them.

UMA WANG 

Uma Wang called this season’s collection A Subconscious Museum. In a three-minute video, the designer invites the viewer into her dream — a blurred, unidentifiable place full of references from the past. The collection’s looks are dominated by layers of relaxed chemises and gigantic, wide-leg pants wrapped in granny-style oversized coats. The crumpled garments and exaggerated proportions (Wang signatures) evoke the nostalgic feeling of a child wearing their parent’s clothes.

As an established designer, Wang has fans at home and abroad. Her designs, which blend Chinese aesthetics and Western ideals, are stocked globally and backed up by 232,000 followers on Weibo. The release of the Fall 2021 season was announced on Fédération de la Haute Couture et de la Mode and other major media accounts. Although the brand did not use any KOLs, the show generated impressive, organic content and received positive reactions from netizens.

THOM BROWNE

While most brands went for relaxed, comfortable silhouettes or pandemic homewear in light of the lockdown, Thom Browne took an alternative approach. His monochrome looks were overwhelmingly constrained silhouettes or complex patterns — but then again, the designer has never been driven by commercial success. This creative world fascinates the press and consumers alike. His signatures, which are often his bestsellers, were all there as monogrammed classic pieces: the 4-bar shirt, the stitch stripe armband cardigan, and the university stripe grosgrain armband shirt.

To drive pre-show engagement, the brand leveraged fashion bloggers @空蛹出蝶 (2M) @Anny__Fan (5M) @月之海 (1M) @龚林轩 (594k) posting invitations to watch the show. After the show, the brand achieved a total of 127 million impressions from additional influential media platforms, illustrating its industry recognition and relevance with a digital generation.

LANVIN 

The French house, now owned by Chinese conglomerate Fosun International, presented a music film to go with the Gwen Stefani song Rich Girl, featuring a real cameo by the rapper Eve. In the film, models enjoy a post-shopping spree amidst the glamorous backdrop of the Shangri-La Hotel.

With Bruno Sialelli at the helm, the brand rolled out an offline screening event in Shanghai, inviting fashion KOLs such as @Cristine Sun, @Chloe, and @Sarah Xu. However, the event failed to connect and largely went under the radar of netizens and was absent of big names with broader social followings.

CHLOÉ

Gabriela Hearst’s debut show for Chloé was highly anticipated, and she didn’t hesitate to put sustainability in the spotlight, which set the tone for Fall 2021. Her inspiration, fabrics, techniques, and silhouettes all contributed to her vision for the house, not straying far from its bohemian DNA. However, the show’s reception with local viewers was divided. Some had high expectations for the designer’s first presentation with the house, but a few netizens denounced it as “normal without newness” while bemoaning a lack of IT bags. The show’s engagement was much lower than the brand’s other product-oriented campaigns, which featured celebrity endorsements.

SHIATZY CHEN

The Taiwanese luxury fashion brand’s latest Fall collection embodied the designer Wang Chen Tsai-Hsia’s power-dressing approach, which was popular in the 1970s. Chinese craftsmanship could be seen in its structured silhouettes, embroidered with traditional ink-brush strokes that resembled graffiti. Despite a look back at the brand’s heritage via social, from pre-show teasers to a digital presentation on social channels, the show failed to win over fans. It received many negative reactions from KOLs and netizens, particularly about its blurry brand position. “Neither younger nor mature consumers will pay for the designs,” said @Xu Qiujin about the collection.

RICK OWENS 

Rick Owens’ Gethsemane was presented open-air at the Lido Beach in Venice; all models wore masks and walked for empty seats. Of course, the bespoke leather masks perfectly complemented the collection, evoking a mysterious atmosphere.

Rick Owens’ Weibo account stopped posting in 2019, yet the brand still has 192,000 followers. Still, this show secured nearly 30,000,000 impressions thanks to media and other fashion accounts. However, Owens’ conceptual approach to fashion is for the few. Most of the netizens mocked his avant-garde aesthetic, commenting, it “looks like Star Wars to me.” Yet, this only makes the Rick Owens community feel even more elite.

Reported by Wenzhuo Wu, Lisa Nan, and Gemma A. Williams.

China's services sector millennial shopping

Where Luxury Stands In China’s Consumption-Based Economy

Key Takeaways:

  • The growing importance of the service sector in China’s economy has influenced its GDP, with the service industry’s share of the national economy increasing to 54 percent of the GDP in 2020 and providing 60 percent of its total economic growth.

  • The COVID-19 pandemic has precipitated the repatriation of wealth, with various Western countries imposing strict lockdowns and enforcing travel restrictions, forcing the Chinese to change their shopping habits.

  • But unfortunately, the actual driving forces of luxury consumption in China are debt-ridden Gen-Z and millennial shoppers (the debt-to-income ratio of China’s post-90s generation climbed to 1,850 percent in 2018).

China quickly went from an agrarian society to a manufacturing superpower — and more recently, to a technological powerhouse. The country’s economic rise has given a serious boost to Beijing’s bold efforts to create a mature service sector.

Government reports highlight the growing importance of the service sector in China’s economy, which has influenced its GDP. In 2020, the service industry’s share of the national economy increased to 54 percent of the GDP, providing 60 percent of the nation’s total economic growth, according to China Briefing.

Given these changes, let’s see how Beijing’s desire to create a sophisticated, consumption-driven economy could impact global luxury brands.

China’s fleeting trade surplus

As a manufacturing superpower, China ran an “export-led” growth model, in which the country ran gigantic trade surpluses, saving colossal amounts of money parked in sovereign bonds or reinvested in overseas infrastructure projects like The Belt and Road Initiative. As such, those funds were not spent inside China, and the impact on the country’s domestic economy was limited.

The shift towards consumption and services-driven growth model indicates that the government wants to focus on domestic, “high-quality development.” Naturally, Beijing is making “innovation as a national core strategy.” And it is prioritizing investments in key technologies and the digital economy.

It goes without saying that the new growth model is fairer, as it puts the Chinese citizen at its core. Additionally, it empowers domestic consumers, helping them to evolve and embrace more mature behaviors and beliefs. That generates confidence in the market and fuels consumer spending.

From a luxury perspective, brands should glorify this move because they gain access to a giant middle class that is becoming increasingly Westernized in its consumer behavior. The bottom line? Beijing’s policies have turned a nation of savers into big spenders that aren’t afraid to take on household debt to secure their luxury purchases.

The repatriation of Chinese luxury goods spending

The COVID-19 pandemic has precipitated the repatriation of wealth. And with various Western countries imposing strict lockdowns and enforcing travel restrictions, the prodigal Chinese consumer has been forced to change his shopping habits. Instead of booking lavish travels to international destinations, those consumers have turned their attention towards the domestic market, supporting local brands and multinationals that had a strong footprint in China.

As such, duty-free sales and service revenue in Hainan skyrocketed in 2020. Bain & Company reports that by the end of October 2020, sales in Hainan were increasing at a rate of 98 percent. Luxury brands also reported record sales at their China flagships. According to Reuters, Prada announced that the group’s China sales jumped 60 percent in June and 66 percent in July. Meanwhile, the French luxury group LVMH stated that sales at Louis Vuitton and Dior stores in China more than doubled during some weeks.

Smart luxury brands generated interest and delivered profitable growth by focusing on the domestic market. And now, analysts predict that this positive trend will continue in the future.

As consumers continue to boost luxury consumption in China, Bain estimates China will become the world’s largest luxury market by 2025. All in all, China’s transition to a consumption-driven growth model is helping luxury brands increase profitability and generate high returns.

The challenge ahead

Yet luxury brands shouldn’t underestimate the effects of income and wealth inequality. Nikkei Asia highlights the perils of mounting household debt and determines that, “although it may look like consumption is becoming a stronger driver of the economy, the wealthy are playing a disproportionate role.”

Indeed, the actual driving forces of luxury consumption are millennial and Gen-Z shoppers who are unafraid of debt. A 2018 HSBC survey shows that the debt-to-income ratio of China’s post-90s generation climbed to 1,850 percent. At the same time, additional dark clouds are slowly appearing on the horizon for the Chinese economy. The previous year marked a decline in personal consumption despite strong measures to boost domestic retail sales.

Ning Jizhe, the commissioner of the National Bureau of Statistics, said that consumption accounted for 54.3 percent of GDP in 2020. “That’s lower than 57.8 percent of GDP that was initially reported for 2019,” says CNBC.

All things considered, the luxury industry should celebrate China’s shift toward domestic, consumption-driven growth. But in these uncertain times, brands should move cautiously and keep their crisis management plans nearby.

International Women's Day Chinese Brands

5 Homegrown Brands That Represented International Women’s Day In China

In China, International Women’s Day on March 8 was much more than another shopping festival. As Chinese women show greater awareness for female empowerment, they have also pushed luxury brands to uphold these important values. Given this, many discerning local players have stopped using the phrase “Goddess’ Day,” which distorted the meaning of the celebration, and returned to the holiday’s original intent of commemorating women’s rights and achievements.

Slogans, such as the lingerie brand Ubra’s “Bras are a weapon that allows women to easily lie-down-win (tangying) in the workplace,” that favor the male gaze can no longer survive in today’s social media-driven environment. Agile brands are now alert, transparent, and eager to broaden conversations to drive social change. And according to netizens’ reactions, it’s working. Consumers were drawn to campaigns that pointed out issues neglected by mainstream culture and were happy join these brands on their journeys. 

This year, more female-related discourses were spotlighted by brands, from gender bias to female entrepreneurship. Here, Jing Daily reviews five International Women’s Day campaigns that went viral on social media and built allyship with local female shoppers.

Perfect Diary

Perfect Diary collaborated with the new media production house Xinshixiang and China Daily to launch an eight minute video titled “Outstanding Chinese Girls.” Female celebrities like Yamy Guo, Olympic volleyball champion Hui Ruoqi, comedian Papi Jiang, and stand-up comedian Yang Li were invited to discuss their personal journeys through major life events. The video documented how each broke through various social constraints and tackled challenges with confidence, encouraging audiences to ignore external influences and make decisions for themselves. In addition, Perfect Diary announced that it would become the official partner of the Chinese gymnastics team, as well as launch the “L09 Red” lipstick, which represents the firmness, softness, and confidence of Chinese females. 

Tmall Super Brand Day

Tmall Super Brand Day, one of Tmall’s many marketing tools, kicked off this year’s International Women’s Day with the theme of “We are WOMEN.” (“Wo Men” is the Chinese pronunciation of “we.”) The campaign selected 26 brands with initials from A to Z to create “26 Lines of Poems for Women.” Each aphorism is not only in line with the brand’s image, but also conveys various female values. Meanwhile, Tmall Super Brand Day initiated the “Relay Poems to Women” on Weibo, inviting Li Yinhe, Jiang Fangzhou, and Bonnie Bo to post manifestos expressing women’s freedom and equality. The two minute campaign video has received over 21.3 million views on Weibo. Also, the campaign used the phrase “International Women’s Day” instead of “Goddess’ Day,” which has been frequently adopted by brands and retailers to enchant female consumers and increase sales. This nuance — focusing more on values than consumerism — received positive comments from netizens.

JD.com

JD.com rolled out “Her Festival” to create a dialogue with female consumers, launching a short-video that advocated “to love her with heart.” The first half of the video explores the multiple identities of being a woman when growing up — the struggles of being a student, the fear of not being recognized when entering the workplace, the joyful expectation of waiting to see your lover once again, and the strength it takes to handle pregnancy. The second half brings out the “them” behind “her,” with various examples of women being encouraged by their girlfriends at school, guided by their coworkers after entering the workplace, supported by their partners in relationships, and being taken care of by other mothers after giving birth. In addition, JD Fashion teamed up with Harper Bazaar China to feature five female entrepreneurs, including the founders of Maria Dalger, Yangzi Life, Neiwai, 73hours, and Hefang.

Proya

The Chinese cosmetic brand launched their campaign “Gender does not set boundaries; prejudice does,” in collaboration with China Women’s News, publishing a full copy of the campaign on the bottom page of the March 3 edition that spotlighted gender equality. Meanwhile, the accompanying campaign video, which starred female rapper Yu Zhen, showcased various gender biases and stereotypes in today’s society. The storytelling challenged the stereotypical definitions of femininity and masculinity, as well as urged audiences to be themselves rather than conform to social constructions of gender. The video has sparked extensive conversations on social channels, garnering over 2.7 million views on Weibo in one day. In addition, Proya teamed up with illustrators to launch a “Dual Anti Essence Art Gift Box,” which contains skincare products and a special-edition T-shirt.

HomeFacialPro 

The popular Chinese skincare label HomeFacialPro collaborated with the photographer Leslie Zhang for their International Women’s Day campaign, casting four KOLs — fashion influencers Iris and Ximeng Dasao, Standbyher foundation founder Stacey Liang, and stand-up comedian Yang Li — to share their understanding of “Real” and inspire female audiences to be brave enough to embrace themselves and pursue their dreams. The brand also teamed up with lifestyle label Neiwai to drop a limited edition gift box, which was stuffed with newly launched products from both brands.    

Aesop Gets Green Light to Open in China. Who’s Next?

What Happened: During its Q4 and Full Fiscal Year 2020 report, the beauty conglomerate Natura & Co., reported that its two cruelty-free brands, Aesop and The Body Shop, will enter China’s vast beauty market. The news comes following the long-awaited announcement from Chinese authorities to end animal testing requirements for imported beauty products. Roberto Marques, Chairman of Natura & Co., revealed that the two brands are in the process of registering their products in the mainland and that Aesop is expected to open its first store in Shanghai in the fourth quarter of 2021, while The Body Shop’s first store is planned for 2022.

Recommended ReadingAre Cruelty-Free Cosmetics Brands Ready For China?By Gemma A. Williams
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The Jing Take: Following increased competition post-COVID-19, it’s no surprise Natura & Co took an accelerated path into China. Aesop and The Body Shop already have impressive sales through cross border e-commerce platform Tmall. The former has generated over $24.3 million sales since joining in 2018, helped by over 20,000 bits of user generated content (UGC) on Little Red Book. Meanwhile, the latter has nearly 8,000 UGC, with one product, the Ginger Shampoo, topping the favorite list for preventing hair loss. 

Also, the two brands have already established a great reputation and a steady base of followers in China. And their official entry in the market is expected to further boost sales, as well as meet little competition from current market players. However, as more and more crueltyfree brands enter the Chinese market — and try to take advantage of the many profitable opportunities that comes with it — their entrance will undoubtedly spike a rise in the crueltyfree beauty trend in the Chinese beauty market, which both Aesop and The Body Shop are hoping to take advantage of. 

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.

Esports Luxury Fashion Collaborations Adidas

4 Ways Luxury x Esports Will Win Over China’s Gen Zers

Key Takeaways:

  • Luxury brands must win over the country’s younger consumers, as millennials now represent more than 70 percent of Tmall’s luxury fashion and lifestyle market. Meanwhile, Gen Z has become the fastest-growing group in China.

  • China has the largest global esports audience — 162.6 million viewers in 2020. And surprisingly, 45 percent of fans in China are older (25-34), and 39 percent of them are women.

  • Luxury brand marketers must not only invest time playing and watching esports, but they should also talk to young fans of the pastime to gain an intuitive feel for this new cultural phenomenon.

The race is on for luxury brands to win over esports enthusiasts. Luxury marketers have only recently taken esports seriously in what has become the world’s largest esports market: China. Yet, the game-changer in China’s market, while seemingly simple, is often overlooked. Luxury brands must win over the country’s younger consumers, as millennials now represent more than 70 percent of Tmall’s luxury fashion and lifestyle market. Meanwhile, Gen Z has become the fastest-growing group in China.

But here is where the often-misunderstood world of esports gets interesting. Esports growth has gained unprecedented momentum in China. According to the Newzoo Global Esports Market Report 2020, China enjoyed the largest esports audience — 162.6 million in 2020. Meanwhile, Nielsen data shows that esports isn’t exclusively for kids or adrenalin-fueled males, as 45 percent of esports fans in China are 25-34 years old, and 39 percent are female.

However, a defining feature of esports is its level of emotional engagement. According to McKinsey & Co., Chinese fans are more likely to play and watch esports, follow a favorite player, or follow an esports team than their US peers. This intense engagement rate is redefining the future of entertainment, with Nielsen reporting that Chinese esports fans spend more time engaging with esports than traditional sports.

The takeaway is that esports provides a platform where luxury brands can engage with a “hard to reach” demographic. But that raises the question: How can brands leverage this opportunity to provide a luxury brand experience?

  1. Inspire

Esports can provide a fantasy world in which designers can push their creative boundaries. As part of the Louis Vuitton & League of Legends (LoL) partnership, creative director Nicolas Ghesquière created in-game prestige skins (outfits) by designing a real capsule collection. It may be a coincidence or just savvy marketing, but LoL happens to be the second most followed title in China.

Louis Vuitton’s capsule collection with League of Legends featured prestige skins for characters Qiyana and Senna as well as ready-to-wear and accessories inspired by the game. Photo: Courtesy of Louis Vuitton

  1. Influence

Esports teams, players, and KOLs all enjoy strong followings in China, and luxury brands can tap into their influence to provide positive associations. For example, male beauty brands have used esports to achieve greater credibility. Lab Series, the high-end male skincare line from Estée Lauder, has sponsored China’s IG Digital Gaming League and collaborated with LoL’s Invictus Gaming team.

  1. Impact

Streetwear and luxury brand collaborations can instill exclusivity and desirability. Likewise, luxury and esports collaborations can emulate this “coolness” and provide a sense of culture and community. Exclusive collections with the most popular mobile game in China, such as MAC x Honor of Kings (in which products correspond to the game’s characters), sold out instantly. Luxury brands can also draw inspiration from Adidas, which partnered with an individual player, Tyler ‘Ninja’ Blevins, to launch a collection. That collaboration might only be the beginning of brands working with star players.

Following the success of its first collaboration with Honor of Kings in 2019, MAC Cosmetics teamed up with the mobile game once again to launch lipsticks and eyeshadow palettes based on five male characters. Photo: Courtesy of MAC

  1. Integrate

Luxury brands can also integrate esports into their customer journeys, using synergy to boost the brand experience. Burberry signed a partnership with Tencent Games to integrate its products into the online mobile game Honor of Kings in China. And the opening of Burberry’s social retail store in Shenzhen provides an ideal platform for merging the worlds of play and retail space.

Ultimately, any luxury brand marketer should invest time playing and watching esports. But they also should talk to the young people who engage in esports. An intuitive feeling for this new cultural phenomenon will help navigate an effective esports strategy. And soon enough, luxury brands will need to ask themselves if they are ready to be winners or losers in the fast-moving world of esports. For luxury brands, it’s time to put on their game faces.

Glyn Atwal is an associate professor at Burgundy School of Business (France). He is co-author of Luxury Brands in China and India (Palgrave Macmillan).

Exor Louboutin China Expansion

Exor Eyes China Expansion Via Louboutin

What Happened: Exor, the holding company of Italy’s billionaire Agnelli family, announced on March 8 that it is taking a 24-percent stake in Christian Louboutin for the price of $640 million, creating a $2.73 billion value for the red-soled shoemaker. The transaction is expected to close in the second quarter of 2021, with Exor appointing two of the seven board members.

Over the years, Louboutin has refused offers to buy the company, even from the likes of LVMH, but stated on Monday that Exor’s “longer-term focus and a strong entrepreneurial culture” makes it the “ideal partner.” Together, the two aim to “accelerate the next phase of the company’s development,” while Exor noted significant growth potential in China for the French brand.

The Jing Take: Considering the number of consolidations within the industry — from LVMH’s landmark acquisition of Tiffany & Co. to Jil Sander’s purchase by Maison Margiela’s parent OTB just days ago — this Louboutin deal shouldn’t come as a surprise. Exor, currently the largest shareholder in Ferrari, has already shown an increasing appetite for luxury expansion, as it took a majority stake in Chinese luxury lifestyle label Shang Xia last December.

Recommended ReadingAdidas Is Selling Reebok. Will Chinese Buyers Swoop In?By Jennifer Zhuang
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In particular, this latest partnership signals growing investor interest in the footwear category, coming on the heels of Birkenstock’s sale to the private equity firm L Catterton earlier this month. However, not all footwear types are faring well during the pandemic. Luca Solca, an analyst at Sanford C. Bernstein, told Bloomberg that “[formal footwear brands] are impacted by a secular casualization trend, of which sneakers are the epitome in the category, and they are difficult to expand into other product categories.” Although Louboutin is best known for its heels, Exor seems to be banking on the brand’s history of “exclusive collaborations” and forays into fancy sneakers to buck against this trend.

Louboutin appointed Karry Wang (79 million Weibo followers) as its first China ambassador in January 2021.

Beyond diversifying Exor’s portfolio, the deal is also expected to grow Louboutin’s China presence and e-commerce capabilities. It helps that the shoemaker has already hit the ground running in China. The fashion house recently selected its first China ambassador, the TFBoy’s Karry Wang, in January to front its pop culture-inspired Super Loubi capsule collection (a clear appeal to China’s young consumers). Now, backed by Exor cash, Louboutin is well-positioned to “become one of the world’s preeminent luxury players.” But if it wants to win China, it will first have to go up against heavy hitters like LVMH and Kering, which already boast massive footprints in the market.

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.

Art NFT Fewocious

Is the NFT Hype Made for Luxury?

Around March 2020, the 18-year-old artist known as Fewocious learned about non-fungible tokens (NFTs) when he was offered $90 to sell one of his digital pieces as an NFT. Fast forward to last Saturday, when Fewocious’s NFT art brought in $3.1 million in seven minutes via his collaboration with the virtual sneaker brand RTFKT Studios that was sold on NFT marketplace Nifty Gateway.

Each virtual edition of the Fewocious x RTFKT drop came with a physical pair of shoes. “I had never seen a shoe drop on Nifty, not on the scale that we did it,” the artist told Content Commerce Insider. “I’ve seen smaller ones, but I don’t know if any have ever come with physicals like this.”

Fewocious x RTFKT

Merging the worlds of sneakerheads and crypto art collectors was evidently a match made in hype heaven, and it’s a combination that luxury brands should have on their radar.

Typically taking the form of crypto art, digital collectibles, or gaming features, the once-niche digital asset class known as NFTs has skyrocketed into the global mainstream over the past few weeks. NFTs utilize the values of authentication, thanks to blockchain, and scarcity — each NFT bears a unique digital signature and, unlike cryptocurrencies such as Bitcoin, cannot be traded with each other. For their creators, NFTs allow for both up-front monetization and traceable royalties when the tokens are resold.

“NFTS are the future,” said Fewocious. “When I started last year, it wasn’t as big as it is now. It was like my little community. Now I’m like, guys we made it, the world knows about our space. Every week, I get more surprised about how much bigger and bigger it’s getting.”

The duo behind Yonk, Niels and Vikki, jumped into the NFT game in October 2020. “Who doesn’t want to make a little extra money on the side?” they told CCI. “It’s an exciting community and technology to be a part of considering it’s constantly growing and adapting.”

According to Decrypt, the NFT market was valued at approximately $100 million last summer. Now, barely more than two months into 2021, it’s already worth $250 million.

And it continues to blow up. Auction house Christie’s is currently in the process of auctioning its first entirely-digital artwork, made by well-known creator Mike Winkelmann (aka Beeple), who sold one NFT for $6.6 million in December 2020. This week the musician Grimes dropped an NFT art and music collaboration on a day’s notice that brought in nearly $6 million, selling an ethereal short video illustration set with music named “Death of the Old” to the highest bidder for $389,000.

Asian crypto art marketplace BCA is organizing the world’s first physical exhibition of crypto art in March 2021 at the UCCA Center for Contemporary Art in Beijing, with funding from the Kusama Network and Chinese Bitcoin mining company Bitmain. The exhibition will feature works by Winkelmann and other blockchain artists and will showcase China’s instrumental role in helping NFTs achieve broader recognition as fine art.

And where there is art, luxury will follow. The ever-expanding cultural capital surrounding NFTs, and the combination of scarcity and authenticity appear tailor-made for luxury brands to seize upon.

“Royalties are the wow factor,” Fewocious said. “When you buy shoes, like Jordans, people buy them for like $300 then go on StockX and sell them for like $3,000, or even like $20,000, but Nike gets nothing in the form of royalties.” If Nike sold its most sought-after sneakers with NFTs, the company would receive a percentage on all future resales, an opportunity for passive income that brands may find difficult to resist.

Recalling a recent conversation on Clubhouse, Fewocious considered the possibilities for brands entering the NFT space and the implications for artists. “Someone said, Well what if a big company like Foot Locker bought an NFT, then started printing as many as they want? They could have the art in their line. It’s opening up a whole new door!” he said, hinting at the future of brand collaborations.

In addition to buying NFTs to integrate art into their collections, luxury brands could also utilize the exclusivity model of NFTs by dropping digital fashion or art with a physical component, following the model of the Fewocious x RTFKT collaboration.

“NFTs and interest in digital artwork is completely to the luxury fashion industry’s advantage,” said digital designer Nicole Zisman. “Unlike the high-street and fast-fashion sectors, the major change would be in the medium of ownership of luxury fashion that customers are interested in, not whether the interest in ownership is there in the first place.”

Interestingly, back in 2019 Nike released a series of “crypto-kicks” with an NFT as a way to combat counterfeits, but it drew limited attention as the serious NFT hype had not yet taken off.

Now, Fewocious says, “I’m sure Nike is wondering how it can do what we’re doing, on a bigger scale.”

And if brands don’t take advantage themselves, others will find a way. Trevor Andrew, who created the Gucci Ghost in 2016, is on Nifty Gateway, where his unofficial Gucci-printed NFTs start at $2,500.

This post originally appeared on Content Commerce Insider, our sister publication on branded entertainment.

LVMH Europe

Why No Other Luxury Company Compares To LVMH

Key Takeaways:

  • According to data analyzed by Finaria, the French luxury house LVMH reached a staggering $319.4 billion (264.6 billion euros) as of February 26, 2021, surpassing Nestlé, the Swiss food giant, to become Europe’s most valuable company.

  • Added luxury value is a component resulting from psychological effects that make our brains attribute positive aspects (such as higher attractiveness, more expertise, a better life, and more self-esteem) to a person who buys or showcases a luxury item or brand.

  • Brands with powerful stories that create desire via ALV can add significant premiums due to the rare value they produce.

Most people are astonished by the size and dynamics of the luxury market. Intuitively, they assume luxury is a niche business — even people who work for luxury brands. But what many underestimate is a luxury brand’s enormous value creation potential.

This year marks a historic moment for the luxury industry. All brands are hoping for better performances than last year and a speedy recovery for the European and North American luxury markets. Both regions fared poorly during the pandemic, with some categories losing 50 percent or more of their market in these areas that many of the world’s most admired luxury brands call home.

With the pandemic still raging across the first quarter of 2021, and most key European markets in strict lockdowns, the news that LVMH just became Europe’s most valuable company might be surprising. According to data analyzed by Finaria, the French luxury house reached a staggering $319.4 billion (264.6 billion euros) as of February 26, 2021, surpassing Nestlé, the Swiss food giant.

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What’s driving this all-time-high valuation is how the luxury group used 2020 better than other luxury houses and put itself in the pole position for when the markets come back. In short, their strategy execution is a masterpiece of extreme value creation from which other brands can learn.

What many brands don’t fully understand is that people don’t buy luxury for the product itself but for the brand’s exclusive value. I have described this phenomenon, called Added Luxury Value (ALV), several times before in my Future of Luxury column.

Added luxury value is fascinating yet at the same time tricky. It is a value that results from psychological effects that make our brains attribute positive aspects (such as higher attractiveness, more expertise, a better life, and more self-esteem) to a person who buys or showcases a luxury item or brand. In other words, a luxury handbag or luxury watch makes you perceived as smarter, more attractive, and more fun to be with, according to my research.

It is an automatic, archaic response in our brains that we cannot deny. Studies in Europe, China, Japan, and North America confirmed that the ALV effect is universal — regardless of how much we like luxury and independent of age or other factors. Even the product is mostly irrelevant, as this desire is driven primarily by one’s perceived story about the brand.

Hence, brands with powerful stories that create desire via ALV can add significant premiums due to the rare value they produce. If your brand creates high perceived consumer value, you can price for it and achieve profitability far beyond other categories. If brands cannot develop powerful stories, offer consistent experiences, or price their products correctly, ALV either does not develop or collapses completely. And once it’s gone, it rarely returns. That’s why many brands in the luxury sector decline quickly or never take off at all. Managing ALV is a core task in luxury, and few brands spend the proper time on it.

Unsurprisingly, LVMH is a master of storytelling and brand experience creation. Bernard Arnault famously described luxury as the ability to create desire. The greater the lust, the higher the value creation. In turn, more customers flock to the brands with the highest value creation and are willing to pay prices that correspond to that value.

So how is that value achieved? With a combination of the best managers in luxury and uniquely talented creatives like Dior’s Kim Jones and Louis Vuitton’s Virgil Abloh. A good example is the acquisition of Rimowa. Before LVMH controlled the luggage brand, it was without a clear profile or quality brand storytelling, overemphasized heritage, and mistakenly sold their products wholesale (impacting the brand experience significantly). Meanwhile, the brand displayed almost a complete lack of innovation.

Alexandre Arnault cleaned up the brand’s distribution, got rid of wholesalers and promotions, significantly increased prices, and made the brand a disruptive force. Because of Rimowa’s efforts, carry-ons became as desirable as handbags for the first time in history, with seasonal collections that created the urge among wealthy travelers to showcase their newest and latest Rimowa carry-ons. The Off-White x Rimowa transparent trolley quickly became an instant hit. Then, during the pandemic, Rimowa pivoted to backpacks and more practical items that people could use every day. As a result, Rimowa became the perfect example of how a lagging brand can transform into a creative luxury powerhouse with a compelling brand story.

Off-White x Rimowa transparent luggage collection. Photo: Courtesy of Rimowa

During the pandemic, LVMH acquired the famed jeweler Tiffany’s. I expect the company to give the brand a complete transformation similar to Rimowa’s, which will breathe new life and significant growth into the iconic American brand with massive appeal in Asia. With an injection of creativity and experience creation, as well as more coherent pricing and assortment strategies, Tiffany will have enormous growth potential, as I’ve stated before in several columns.

Recommended ReadingHow Tiffany Could Become The Next Luxury Mega-brandBy Erwan Rambourg
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Unlike many other luxury houses, LVMH has refrained from lowering prices or from promoting during the pandemic — a strategy that I suggest to be the best practice for luxury brands. In fact, brands like Dior introduced price increases, reflecting the extreme value its brand creates.

Another of LVMH’s strong characteristics is that it isn’t afraid of making tough decisions. One such decision was putting Fenty — the glamorous fashion house it created together with pop singer Rihanna — on hold. Rumors about Fenty’s disappointing results and the high cost of establishing a new brand had led LVMH to shift its focus to more promising and scalable brands for the time being.

In 2020, key LVMH brands like Dior continued to expand digitally by experimenting with newer platforms like Tiktok, while other luxury brands were reluctant and slow to adapt. As such, the Dior x Air Jordan limited edition created one of the highest digital demands ever, with over 5 million people trying to buy the shoes over the website, which boosted resale prices of the limited edition to between $10,000 and $20,000, depending on the platform. That initiative shows the power of ALV.

Dior x Air Jordan limited edition sneakers. Photo: Courtesy of Nike

The ability to consistently manage a complex brand portfolio with the primary focus of creating desire and ALV — and translating that extreme value into higher and higher prices — explains LVMH’s success story and has driven its market valuation to unprecedented heights. The company’s brands have been among the best managed during the pandemic, connecting strongly with their customer groups while always innovating.

LVMH provides a lesson for other luxury brands: If you focus on the excellent execution of a strong brand story, avoid the urge to promote, and digitally engage with your customer base in tough times, then you will be rewarded in customer desire, larger revenues, high profitability, and ultimately, top market capitalization. The current surge behind LVMH reflects that investors believe the company is well-positioned to lead, even in a pandemic. Do people have that kind of faith in your brand?

Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the professor of luxury strategy and extreme value creation at Pepperdine University in Malibu, California. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a global keynote speaker, and holds luxury masterclasses in Europe, the USA, and Asia. Follow @drlanger

JD Duty-Free Store Hainan

How One Brand Tapped Into China’s Booming Duty-Free Market

Key Takeaways:

  • In 2017, the duty-free and travel retail market was valued at $74.9 billion, and estimated to reach $153.7 billion by 2025.

  • In a year, COVID-19 wreaked unprecedented havoc in the industry, killing duty-free and travel retail.

  • Offshore duty-free sales on Hainan island rose to $3.82 billion over 2020.

After years of bullish expansion, the duty-free and travel retail market has been brought to a standstill by the COVID-19 pandemic. In 2017, the market was valued at $74.9 billion and was estimated to reach $153.7 billion by 2025. According to the Duty Free World Council, $36.2 billion was spent on duty-free and travel retail that year in the Asia-Pacific region.

But the pandemic sank retailers, forced airport stores to close down, postponed cruise activity, and hindered sales growth. In just one year, COVID-19 wreaked unprecedented havoc in the industry, effectively killing duty-free and travel retail.

The silver lining for the industry has been China: a resilient market that benefited enormously from the relaxation of duty-free limits, the repatriation of wealth, and the country’s luxury appetite. Not long ago, the prodigal Chinese shopper satisfied his luxury cravings while traveling internationally. But with tight safety measures and cross-border restrictions in place, he turned his attention to China’s duty-free shopping paradise: Hainan island.

Offshore duty-free sales on Hainan island rose to $3.82 billion (25 billion RMB) for the year up to December 14 of 2020, according to official figures released by Invest Hainan to The Moodie Davitt Report. Since the adoption of the new offshore duty-free shopping policy on July 1 of that year, average daily sales have surpassed $18.3 million (120 million RMB), Hainan IEDB reported.

Through bold moves, some retailers and e-commerce players managed to thrive in this new reality. Those retailers built better brand engagement and attracted new shoppers by identifying consumer needs and capitalizing on demand shifts. The Chinese e-commerce platform JD.com is one example of a company making all the right moves on Hainan.

Right before the New Year’s holiday, JD Worldwide opened a duty-free store in partnership with Hainan Tourism and Investment Development Co. in Sanya, Hainan province. According to JD’s corporate blog and data from Haikou’s Customs, sales from three of its newly opened duty-free shopping centers (including Sanya Hailv) reached 540 million yuan from January 1-3, a year-on-year increase of 195 percent.

“JD has leveraged its expertise in e-commerce, marketing, and supply chain to create a store that is unlike traditional duty-free stores,” says the press release. “Whereas most duty-free shops focus on fashion, luxury, cosmetics, and even alcohol and cigarettes, JD has gone in an entirely different direction, equipping the store with consumer electronics and small appliances, such as hair dryers, speakers, and coffee machines.”

JD’s duty-free store in Sanya focuses on electronics and digital products from brands like Dyson and De’Longhi. Photo: JD’s Corporate Blog

As you can see, JD increased business profitability and sales revenues through a well-defined product diversification strategy that brought the right product to the right customer at the right time.

Take, for example, the company’s expansion into health supplements. JD understood that Hainan is the equivalent of Florida — a vacation hotspot for seniors and aging boomers. Therefore, instead of releasing new luxury products, JD came up with a personalized offer made up of health supplements and health-related products.

Providing consumers with a larger spectrum of products is a strategic move. But this is only one part of JD’s plan. The Chinese e-commerce company also digitized the retail experience by integrating JD’s cloud & AI technology while launching a cross-border experience store.

JD’s cutting-edge retail technology and its digitalization capabilities took the retail experience to a new level. By introducing “smart shelves” — electronic price tags that ensure real-time price changes and smart marketing technologies — the company built a more interactive and personalized experience.

Luxury brands and Western retailers that want to take advantage of the booming duty-free industry in China should follow in JD’s footsteps by building positive brand experiences, increasing product diversity, satisfying consumer desires for safety, and prioritizing convenience.

One company, the luxury beauty brand Helena Rubinstein, has already taken a page from JD’s playbook by collaborating with the China Duty Free Group to launch its very first online-to-offline premium luxury travel event in Sanya.

On December 21 and 23, luxury experiences at the Helena Rubinstein villa were livestreamed by two renowned beauty influencers, Teacher Xu and Kakakaoo. The livestreaming session attracted more than 25 million viewers, according to Duty Free & Travel Retailing Magazine.

Pinduoduo Users Surpass Taobao

Is Pinduoduo Ready To Compete With China’s Biggest Players?

What Happened: During the first two days of the Chinese Lunar Year, Pinduoduo’s daily active users (DAU) surpassed Taobao’s for the first time in the company’s six-year history. Over February 12 and 13, Pinduoduo had 259 million DAUs, dwarfing Taobao’s 237 million. This landmark was even more notable given that the former did not cooperate with CCTV’s Spring Festival Program this year.

US-listed Pinduoduo is the third-largest e-commerce player behind Alibaba Group and JD.com. Pinduoduo’s market value now stands at over $190 billion, and its founder, Huang Zheng, is now worth $30.6 billion, ranking him seventh on the China Forbes list of the country’s richest citizens.

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The Jing Take: It took Alibaba 14 years and JD.com 19 years to exceed $150 billion GMV, but Pinduoduo reached this ambitious milestone in only four-and-a-half years. And now, it has also surpassed Taobao in daily active users. However, the company still faces many hurdles to the way to besting either of its competitors. This milestone may have been a victory, but, looking closer, it is reflective of the company’s investment in promotional activities. Since February of 2020, Pinduoduo has invested $463 million in red envelope activities (digital monetary gifts given away during holidays) aimed at the Spring Festival. But due to the high cost of these promotions, the shopping platform has yet to make a profit.

Pinduoduo also faces increasing competition from China’s other sophisticated e-commerce platforms. Alibaba’s Tmall and the Luxury Pavilion, as well as JD.com, have successfully tapped into the luxury market. Wanlimu is also a rising star in the app world, using Pinduoduo’s subsidies strategy to sell products from brands like Celine. But in the meantime, Pinduoduo has stuck to offering its goods to lower-tier cities, particularly rural areas, where prices are the main attraction for users as the platform relies heavily on bottomless discounts and subsidies. And before it can even think of moving into luxury, Pinduoduo must first address its counterfeiting issue (called “Pinjiajia” or fake-fake among some users). But for now, that seems far into the future.

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.

Neiwai No Body is Nobody Campaign

Lingerie Brand Neiwai Takes Bold Stance On Body Diversity

The Social Edition is our weekly series which deep dives into luxury initiatives in China’s social media landscape. Every week, we highlight brand campaigns distributed on Chinese digital platforms — WeChat, Weibo, Tmall, Douyin, and beyond.

Our coverage spotlights global luxury brands, global beauty brands, and local Chinese brands. The latter gives insight into some of China’s most successful campaigns, which often come from local players, and are outside of the beauty and fashion space.

In this week’s roundup, we look at three campaigns, including Neiwai’s latest installment of its NO BODY IS NOBODY project, L’Oréal’s first-ever virtual idol, and JNBYHOME’s debut pet collection.

Neiwai’s Brave Stance On Body Diversity Pays Off In China

BRAND NEIWAI 
CATEGORY Lifestyle
PLATFORMS Weibo, WeChat, Tmall 
MEDIUM Short-film, Image, Podcast

OVERVIEW 
Chinese lifestyle brand Neiwai launched the second installment of its NO BODY IS NOBODY project on March 1. The initiative debuted in February 2020 with a series of documentaries exploring female body diversity, sparking extensive conversations on the topic on social channels. This year, the brand broadens the context to female power. In addition to telling stories about eight women with various body types in short videos and photographs, the campaign features in-depth content production in the form of a podcast about feminist discourse, bringing together more female consumers with shared values.

NETIZEN REACTION
Neiwai’s approach breaks away from the male gaze and leans into women’s perspectives, resonating greatly with female Chinese consumers. In turn, netizens showed their love for the brand’s appreciation and celebration of female power and inclusivity: The campaign hashtag #NoBodyIsNobody has received over 7.48 million views, and the teaser video has garnered 61,600 views on Weibo within one day.

VERDICT
Neiwai has developed a consistent narrative that celebrates women’s empowerment, strengthening its brand awareness in the local market. Unlike other brands that collaborate with celebrities or fashion/entertainment KOLs, Neiwai features normal women — without ideal looks or body shapes — in its campaign, making the brand more relatable to broader consumers. Moreover, the podcast episodes, which star female KOLs with professional backgrounds, generate in-depth conversations on career, family, and self-exploration that help build loyal brand communities.

L’Oréal Creates Virtual Idol To Connect With Chinese Female Beauty Shoppers

BRAND L’Oréal Group 
CATEGORY Beauty
PLATFORMS WeChat
MEDIUM Image

OVERVIEW 
On March 1, the L’Oréal Group announced its first-ever virtual idol named Mr. Ou (欧爷), along with his personal female assistant. Mr. Ou’s persona is set to be a 24-year-old Chinese-French eco-minded entrepreneur involved in the beauty industry. Ou plays multiple roles under various social columns: he serves as the news minister and brings users the latest beauty trends in “Mr. Ou Know-How”; he is an ingredient expert uncovering the secrets in cosmetics in “Mr. Ou Talks Ingredients”; he introduces celebrities and KOLs to users in “Mr. Ou Face to Face”; and he also delivers sustainability initiatives in “Mr. Ou for Public Welfare.”

NETIZEN REACTION
The appearance and personality of the character alludes to “Mr. Love: Queen’s Choice,” a Chinese female-oriented mobile game that allows players to text, chat, and call the male leads. This type of perfect-looking young male caters to many Chinese female consumers’ aesthetic preferences. However, there is criticism on the art design of the virtual idol: “the characters are roughly designed and painted.”

VERDICT
The animation of creating Mr. Ou aligns with East Asian consumers’ preference for two-dimensional virtual characters. Influenced by Japanese ACG (anime, comic and games), Chinese consumers show higher interest in animated characters as compared to digital avatars. Moreover, the technical requirements and financial investment of creating a 2D character are much less involved than developing a digital avatar that looks more human. Thus, the L’Oréal Group’s foray into virtual idols is a promising start in China’s market, especially highlighting the character’s social capability and sustainability mindset.

JNBY Sets Its Sights On China’s Booming Pet Economy

BRAND JNBYHOME  
CATEGORY Lifestyle
PLATFORMS Weibo, WeChat, Tmall 
MEDIUM Image, Mini Program

OVERVIEW 
JNBYHOME, a sub-brand of the Chinese fashion house JNBY, has collaborated with the pet product designer brand Pidan to launch JNBYHOME’s first pet collection. The debut features pet dining sets, pet apparel, toys, pet nests, and more, creating a one-stop pet destination. In addition to pet products, the collection includes pet-friendly loungewear meant to improve relations between consumers and their puppies and kittens.

NETIZEN REACTION
The WeChat post announcing the partnership between JNBYHOME and Pidan has received over 8,400 views within two days, and pet enthusiasts showed high expectations for the collection by spontaneously sharing photos of their pets. The functional and well-designed featured products resonated with young Chinese consumers, many of whom are willing to invest a lot of money in their pets.

VERDICT
This collaboration is not the first between these two brands. Their first launch was a limited-edition box that includes matching loungewear, an eye mask, and a kitten’s bow tie. This latest edition further tapped into China’s pet consumption market, which is predicted to grow at an average annual rate of 18.2 percent over the next five years and account for more than one-eighth of the global market by 2024, according to Euromonitor. Moreover, this consumption is mostly driven by single, urban customers with relatively high disposable income. Therefore, JNBY’s foray into the pet lifestyle arena will not only help it reach a broader audience with pets; it will also diversify the brand’s image among young consumers.

When Will Luxury Brands Take Resale In-House?

In the established luxury markets of North America, Europe, and Japan, resale has become a big business, one that is only becoming more important with younger consumers displaying a preference for archival pieces and sustainable consumption. According to the Boston Consulting Group, the global resale market is valued at as much as $40 billion, and is set to grow at a compound annual rate of 15 to 20% over the next half-decade.

Even in China, where consumers have traditionally been less receptive to used goods, the effective use of content-commerce strategies by domestic platforms such as Isheyipai, Ponhu, Feiyu, and Plum is fueling a surge of interest in secondhand luxury.

Yet globally, resale still represents a tiny share of the luxury market, accounting for an estimated 2% of revenue (in China, its share is larger, at and approximately 5% of the total luxury market). For major resale platforms (and investors), there’s a clear opportunity.

While VCs have been pouring cash into platforms like The RealReal, Depop, and Vestiaire Collective, luxury brands themselves have, until recently, remained resistant to the idea of endorsing secondhand luxury retail. But now that wariness looks to have evaporated, thanks at least in part to the coronavirus pandemic.

This month, Kering acquired a 5% stake in Vestiaire Collective (along with a board seat) in the platform’s €178 million ($214 million) fundraising round, while Kering-owned Gucci announced an official partnership with the U.S.-listed The RealReal in October 2020. Rival LVMH is also expected to outline broader plans for resale in 2021, with its group head of image, communications, and environment Antoine Arnault telling Vogue last fall, “We are currently studying the subject [of resale]. It is still a little early to fully answer this question. It’s an economy that exists, that’s growing in importance, so we’re looking at it carefully.”

The clear opportunity in resale — and the fear of missing out — was echoed by Kering digital chief Grégory Boutté, who said, “We recognize that this is a fundamental shift that’s happening in the way clients are relating and engaging with luxury fashion, so we don’t want to close our eyes and pretend it’s not happening.”

At this point, seeing more luxury groups and brands ink official partnerships with resale platforms is no real surprise, given how such deals can help control the spread of counterfeits and maintain brand image. But the trend also brings up the more interesting question of when brands will cut out the middleman by taking resale in-house, and what effect that will ultimately have on the platforms.

A Kering brand could well be among the first to take that step, potentially Gucci, whose CEO, Marco Bizzarri, told Vogue Business, that the brand was “looking into a large offering in its own stores.”

LVMH’s relative silence on the matter also speaks volumes. The group’s focus on sustainability, — reflected in the recent prioritization of upcycling by portfolio brands like Loewe and Louis Vuitton — hints at the possibility that the group could take archival or secondhand retail in-house through either a new platform or the evolution of its 24S e-commerce site.

Even as it lags behind Kering in the race to integrate resale into its broader offerings, LVMH has an opportunity to leapfrog into a stronger position in the “certified pre-owned” space simply by retaining full control for the time being and opting out of working with third parties. As the most valuable company in Europe, LVMH has many resources at its disposal, along with a broad consumer base that spans boomers to Gen Z, an enviable worldwide brick-and-mortar footprint, and at least moderate prowess in the digital space.

The next question is whether LVMH can put its many advantages to use. Will it enter into some sort of partnership with a platform like The RealReal or Vestiaire Collective or take a wait-and-see approach, perhaps learning from any mistakes Kering happens to make in the months ahead?

Second-hand luxury

Second-Hand Luxury — Don’t Have Second Thoughts

Key Takeaways:

  • Second-hand luxury sales should become incrementally relevant in a post-COVID-19 world in which buying with purpose and issues of circularity will take on a bigger role.

  • The trend is part of the third wave of change which will affect the luxury sector, after the COVID-19 shock and the economic consequences, with climate change and sustainability understandably bound to dominate luxury conversations.

  • Is this bound to remain a Western trend? How should brands ride the wave? Why are consumers really interested? Many questions will find answers in the years ahead but here are some thoughts.

Put your money where your mouth is

At the end of the last chapter of my book Future Luxe called “Disrupting Luxury: The Decade Ahead,” I write about the rise of rental and second-hand goods. While I find the first business model to be intricate and somewhat limited in potential, I believe the future of second-hand purchases in luxury is big and bright. It is indeed, in my mind, an attractive alternative to purchasing fast fashion brands while contributing to a circular economy that ultimately produces less waste.

In my first Luxe Decade column called the Third Wave, I had described how after the COVID-19 pandemic and the ensuing economic implications, the world would focus on a much graver, broader threat, that of climate change, as well as other environmental, social, and governance issues. These are issues that François-Henri Pinault, the chairman and CEO of Kering — and the kind writer of the foreword of my book — has had close to his heart for years. Indeed, Kering has been recognized for its focus on sustainability issues, is known for developing “EP&Ls” for its brands, and has a very active voice in their Chief Sustainability Officer, Marie-Claire Daveu. This week the Kering Group took a stake (and a board seat) in Vestiaire Collective, putting the focus once more on this up-and-coming segment of the luxury market and the attention is unlikely to wane any time soon.

This could become a global phenomenon

In 2011, e-commerce entrepreneur Julie Wainwright founded The RealReal. The company, listed as of June 2019, employs experts to authenticate second-hand luxury products that are sold on consignment. It is the US poster child for the principle of “re-commerce” of luxury. Rebag is a New York–based website that launched in 2014 as a platform to buy and sell designer handbags. And in a somewhat extreme take on second-hand, there was a burgeoning market pre-COVID-19 for used makeup among millennial consumers in Japan. 

Many other companies started up on the principle of second-hand ownership, taking a sort of vintage approach to luxury. Vestiaire Collective is 12 years old and has 11 million members, who buy and sell authenticated luxury fashion items. Similar companies include Material World, thredUP, Poshmark, and Depop. In hard luxury, Watchfinder & Co. was founded in 2002 as an online second-hand watch retailer and was purchased by the Richemont group in 2018. 

Most of these concepts are Western or Japanese but for now a very limited proportion of sales are made to Chinese consumers. This could change in the years ahead for three reasons. First, Chinese luxury consumers are mostly first-time purchasers of luxury items, so they often would prefer the latest and greatest products that will enable them to shine in society. As they evolve to becoming repeat purchasers, buying something from previous collections will likely be okay. Secondly, many American and some European consumers are quite value conscious. That will come in China eventually as well. Third, because many consumers in Asia are first-time purchasers, environmental or circularity issues are not the main priority in a first purchase as it is more about fitting in but that, again, is just a question of time. Are consumers buying second-hand because it’s cheap or because it feeds into circularity and makes them feel responsible or look good? I believe it is a bit of both, but it’s hard to tell if only asking those consumers as they will likely focus on the latter.

Where to and with who?

In a recent fascinating study, BCG assessed that second hand-sales of apparel, footwear, and accessories accounted for USD30bn to USD40bn in sales and should grow on average 15 percent to 20 percent per annum over the next five years. To paraphrase what Federico Marchetti, the visionary former CEO of the Yoox Net-a-Porter Group, said recently at a conference: the future twenty years ago was online sales, the future today is sustainability. Besides, I believe that second-hand sales are a very powerful means to recruit consumers who may otherwise not have been shopping at your brand and who may eventually trade up to purchase the latest collections at full-price. 

Who should manage second-hand for a brand? Here, it’s a bit like for online sales. There is a pragmatic, “Italian” way to run second-hand, which is to find trusted partners, which Kering seems to have adopted. And there is a dogmatic, “French” way to run luxury, which is to control everything you can from production to distribution (think Louis Vuitton or Hermès) and that could imply that eventually you deal with second-hand sales yourself. I don’t know if one is better than the other, I just think the trend is nascent and promising.   

Erwan Rambourg has been a top-ranked analyst covering the luxury and sporting goods sectors. After eight years as a Marketing Manager in the luxury industry, notably for LVMH and Richemont, he is now a Managing Director and Global Head of Consumer & Retail equity research. He is also the author of Future Luxe: What’s Ahead for the Business of Luxury (2020) and The Bling Dynasty: Why the Reign of Chinese Luxury Shoppers Has Only Just Begun (2014). 

Yu Prize Designer China Finalists

16 Emerging Designer Names to Know

The 16 finalists of the Yu Prize 2021 have been announced. The line-up includes an epoch-defining list of Chinese names, including London Fashion Week brands Dan Shan and Susan Fang, alongside Milan’s Shuting Qiu and Shanghai’s Shushu/Tong. 

Roughly five years ago, the concept of an independent designer was unknown in China. Now, young trailblazing talents, often educated abroad, are working to transform China’s design reputation both locally and around the world. And while Chinese names have been appearing on international prize lists recently, (Chen Peng, for the Woolmark Prize), or growing their brands with international collaborations (such as nominee 8ON8), this line-up shines a light on lesser-known and up-and-coming domestic names — Oude Waag, Donsee10, Shie Lyu, At-One-Ment, Yueqi Qi, GARÇON BY GÇOGCN, Redemptive, Windowsen, and ZI II CI IEN are now all having a moment on the international stage too.   

Recommended ReadingAre Chinese Designers The Future Of Luxury Collabs?By Gemma A. Williams
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The Yu Prize is the brainchild of entrepreneur and investor Wendy Yu, founder of Yu Holdings. Yu, who recently launched her own C-Beauty line, Yumee, has put together an illustrious list of who’s who of industry professionals as part of her jury, including Diane Von Furstenberg and pioneers of the local industry like entrepreneur Edison Chen and Judy Liu, managing director of Farfetch China

The winner will be announced at Shanghai Fashion Week in April 2021. Sponsorship includes a substantial cash reward (roughly £150,000), 12 months of mentoring from international experts and business incubation at Yu Holdings, plus a retail opportunity at Harrods. And in a race this close to call, all bets are off. 

Dolce Gabanna Diet Prada Lawsuit

Dolce & Gabbana Can’t Get A Break, Nor Do They Deserve One

What Happened: The Internet is after Dolce & Gabbana again, as Diet Prada has filed a defense for freedom of speech on March 1. The move is in response to the Italian luxury brand suing the popular Instagram account for defamation in 2019 after its founders, Tony Liu and Lindsey Schuyler, posted about its controversial #DGLovesChina campaign. The campaign caused outrage worldwide not only for its patronizing take on Chinese culture, but also for the subsequent DMs written by co-founder Stefano Gabbana responding to critics, which the industry watchdog circulated in full.  

The Jing Take: As Dolce & Gabbana tries to remedy its image in China, its shady past continues to haunt it. The lawsuit, which the brand surely thought was a smart move, has proved to backfire almost two years later and continues to paint the brand as aggressive. Moreover, the case itself is questionable, with the defense disputing D&G’s right to sue Diet Prada in its home country Italy. As Fashion Law Institute’s founder Susan Scafidi explained to Fashionista: “Arguably the lawsuit should have been filed in the U.S., where Tony and Lindsey reside, or in China, where Dolce & Gabbana had to cancel its show, but instead the plaintiffs engaged in forum shopping and perhaps hope for home court advantage as well.”

Legal drama aside, D&G is right about one thing: Diet Prada’s exposure had massive repercussions on its business. Although revenue for the Italian fashion house was actually up five percent to $1.54 billion in 2019 despite being iced out of China, it certainly paid for its mistakes in other ways. Shortly after the screenshots were posted, D&G was forced to cancel its runway show in Shanghai as local celebrities and models refused to attend. Meanwhile, Tmall, JD.com, Vipshop, Secoo and others banned its products from their platforms. The brand was then forced to lay low for two years, only rearing its head for a Qixi-themed pop-up in Chengdu last year. 

But even more recent news proves that D&G has yet to live down its 2018 faux pas. For example, the announcement on March 1 of its AW21 fashion show provoked outcry on Weibo, with netizens commenting: “Chinese people remember,” “Boycott,” and “Get out of China.” Additionally, local news outlet Jiemian reported on March 4 that the luxury company was relinquishing its strategic store location within IFS Chengdu, a high-end shopping hub, and moving to a less conspicuous spot, pointing to its shrinking China footprint. 

While luxury brands operating in China have had their share of controversy — from Prada cutting ties with ambassador Zheng Shuang after her surrogacy scandal to Coach, Givenchy, and Versace getting grief over misrepresenting the country’s geography — none have faced this degree of blowback. But as D&G’s case shows, the old adage “any publicity is good publicity” doesn’t apply when the gaffe is so heinous. With Chinese consumers showing spiking nationalism and an increasing affinity for local brands (see the “Guochao” trend), Western luxury cannot bank on the short-term memories of consumers to survive being canceled. Especially when social media’s got the receipts.

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.

Swarovski rebrand 2021 China

Swarovski’s Brand Refresh: China-Facing or China-Inspired?

Recently, Austrian crystal giant Swarovski teased its total brand makeover via short video, offering a sneak peek at its first major overhaul in more than three decades. Spearheaded by Agency General Idea (which has previously worked with Loro Piana, Moncler, and Louis Vuitton), the brand refresh reflects the influence of Giovanna Engelbert, who was appointed as Swavorski’s first-ever creative director last year. General Idea founder Ian Schatzberg told Marketing Brew that the new look was “born out of Giovanna as a designer, her vision, and her world. It’s a creative director-led brand now, and we worked in partnership with her.”

The “Wonderlab” short film stars model Adwoa Aboah, Gwendoline Christie (of “Game of Thrones” fame), and Isla Johnson from Netflix’s recent hit, “The Queen’s Gambit” (playing chess with crystal pieces, naturally). The broader rebrand, set to be fully unveiled on March 19, revolves around a colorful revamp of the traditional Swarovski packaging and a new swan logo.

 

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Based on the brand collateral that has been released so far, it looks like Swarovski’s new look is China-facing, if not China-inspired. Last year the Chinese market offered a rare bright spot for luxury and premium fashion, and 2021 is expected to remain challenging for the industry as a whole, meaning that the competition to stand out among China’s increasingly important millennial and Gen Z consumers will take on even more urgency.

Swarovski “Wonderlab”

Last year, in an effort to appeal to younger demographics, Swarovski tapped the hugely popular Gen Z idol Wang Yibo as brand ambassador. Wang served as the face of Swarovski’s Women’s Day campaign, and shared a video message to promote a line of limited-edition crystal-studded jewelry that included the letters Y, I, B, and O that was quickly snapped up by his fans. In November, Wang helped the brand launch a collection of limited-edition pieces for the November 11 Singles’ Day sales and appeared in a series of short films to introduce the collection, which proved to be one of the most popular limited edition sets of the season, with fans sharing screenshots of their order confirmations to show their support for the idol.

The bold, colorful nature of Swarovski’s refresh will appeal to young shoppers in mainland China. As we have seen from domestic brands beloved by China’s Gen Z — among them Perfect Diary and Hey Tea — strong splashes of color and playful designs, when paired with affordable price-points and the right celebrity or influencer partnerships, are a winning combination. And now, what works among younger millennial and Gen Z consumers in China is also proving to work globally, such as Douyin/TikTok (even though TikTok, for now, has fewer features than its Chinese counterpart).

Now, one question is who Swarovski plans to work with in China to promote its new look — whether it will stick with the tried-and-tested Wang Yibo or enlist new faces, or whether the global Wonderlab campaign will be enough of a draw for young Chinese consumers, who are also huge fans of “Game of Thrones” and “The Queen’s Gambit” (the latter was the highest-rated English-language TV series of 2020 on the Chinese review site Douban). Another question is whether the brand makeover will be enough to help the family-owned Swarovski better compete against Tiffany & Co., which was recently acquired by LVMH and has already spent more than a decade expanding in China to corner the affordable jewelry market.

It also remains to be seen how the full unveiling of the brand refresh goes over in China. What has been teased out so far hasn’t been completely without criticism, with some netizens expressing a preference for the old logo, which was more recognizable and implicitly high-end, while others commented that the changes makes Swarovski look less like a premium jewelry brand and more like a “two-yuan shop on the side of the road.” Can’t please everybody.

This post originally appeared on Content Commerce Insider, our sister publication on branded entertainment.

Little Fresh Meat China Cai Xukun

Is China Killing off its “Little Fresh Meat”? 

Key Takeaways:

  • China’s love affair with androgynous males is a trend that has culminated in the term “Little Fresh Meat,” and now few can dispute the pulling power of male celebrities like Lu Han and Kris Wu over their dedicated fans. From Fendi to Prada, luxury houses are now codependent on the fan economy and use these feminine idols to directly target women.

  • A new proposal might put the fate of these beautiful young men in jeopardy as China has put forward legislation to prevent what it calls the “feminization” of young males. The Ministry for Education has suggested placing more emphasis on student “masculinity” training through physical education teachers.

  • Reactions to the news are mixed but generally negative as Chinese consumers are now discussing topics such as ‘toxic masculinity’ online and holding companies accountable for toxic environments. However if the legislation targets looks, then the many industries dependent on these androgynous men especially beauty could be at risk. Intentional brands will be first in line to face sanctions.

China loves “Little Fresh Meat,” the handsome young male celebrities and KOLs, famous for their androgynous looks and feminine aesthetic appeal. Whether it’s big draws like Lu Han, now the face of Gucci and widely considered the darling of the trend, or Kris Wu, contracted to Louis Vuitton and Bvlgari, or even the “King of Lipstick” himself, Li Jiaqi, these idols have turned “Little Fresh Meat” not only into a popular trend, but also into a very profitable and influential business — both for themselves and the brands they represent. 

Now, however, China might be clamping down on men being too feminine with a new proposal that could mean that their time is numbered. It has legislation in progress to prevent what it calls the “feminization” of young males. While the exact reasons are not listed, the 13th Five-Year Plan period, which laid out plans from 2016 to 2020, aimed to have the Ministry of Education set up to “study the influence of the phenomenon of Internet celebrities on youth values and countermeasures.” 

And, as much as China has tried to suppress males from doing female things in the past, such as Jing Boran wearing earrings, there are all manner of KOLs endorsing female products, from perfume to tampons. Given this, the use of male ambassadors to sell makeup is also normalizing the budding market for male make-up and skin care lines as well. Prada and Givenchy ambassadors Cai Xukun and Wang Yibo are but two KOLs who love to be seen wearing makeup.  

Shu Uemura’s global ambassador Wang Yibo poses with the Chromatics eyeshadow palette, available exclusively in China. Photo: Shu Uemura’s Weibo

Yet, the Ministry for Education has suggested placing more emphasis on student “masculinity” training through the addition of physical education teachers. In fact, during the past five years, around 20,000 new physical education teachers have been added each year through free teacher training students, targeted enrollment programs and other channels.

While the ramifications of such a leaning could have a startling impact on the “Little Fresh Meat” fan economy, advertising, and fashion endorsements, for now it’s still unclear. Here, Jing Daily looks at how netizens have reacted to this news and the potential implication for brands. 

China’s response to stereotypes of masculinity 

“Before you teach a boy to be masculine, teach them how to be a good person first,” is the title of article currently trending among Gen Zers on Weibo and is indicative of the mixed reaction the news has received from concerned netizens. However, the phrase “toxic masculinity” is a relatively new one on the mainland even though the issues it causes are not unknown. “It’s the phrase itself that is new,” Yishu Wang, founder of Half a World, a marketing consulting service, explained, adding that “people are now being more vocal about its implications,” especially over the last number of years.

“People know the problems exist in China and there are lots of discussions online regarding domestic violence and other negative issues, which is one of the backlash areas from this new ruling,” she continued. Recently, many KOLs and influencers such as podcaster Steve Shi and Tiktoker, known as @internet-garcon-pdf on Weibo, are spotlighting these issues on social platforms too, urging citizens to discard gender stereotypes. In fact, these educational posts may be advancing the debate, as well as highlighting what netizens will not learn from school education. 

Consumers too are taking to social platforms to voice their opinions on companies which they feel are promoting toxic atmospheres for women. Mostly recently, Bilibili faced online backlash for inappropriate posts, while underwear brand Ubras came under fire for comments from a male endorsee. On the other hand, male consumers are being more open as society embraces a more dynamic understanding of masculinity being put forward by these well-groomed male stars. Grooming products and wellness brands dedicated to the men’s skincare market have surged in recent years, experiencing a 31 percent year-on-year growth. 

Since the announcement, some local media have been against the guidance and state broadcaster CCTV for one criticized the students’ masculinity policy. Indeed, due to the media outcry on the issue, the Ministry has recently responded to clarify its definition of masculinity, stating it does not refer to masculinity or male behavior. Rather, it is “developing good exercise habits and a healthy lifestyle, refining a strong will, and cultivating a cooperative spirit.” 

It was also clarified that the term included other issues like “commitment, courage, and self-improvement” and that the cultivation of masculinity is a subtle process and not entirely the responsibility of physical education teachers. However, most importantly for fashion, it deduced that masculinity is also the result of the social environment, and that film and television dramas and celebrities have a greater impact on young people and indicated the need to provide these young people with the correct role model. Reading between the lines, this would seem to hint towards a questioning of the role of these media influencers. 

The power of male KOLs to sell to Chinese women 

China’s ongoing love affair with androgynous males has been influenced by neighboring countries Japan and Korea. In 1996, Japan’s superstar Takuya Kimura commercialized the trend selling three million Kanebo lipsticks in two months. The lure of these young, feminine looking men to sell female products, including lingerie, might seem at odds with China’s empowered women, but the list of luxury brands using these influencers is endless. 

Beauty is a key category for the trend; in 2015, the actor Yang Yang became the first male star to appear in ads for Guerlain lipsticks in mainland China and three years later Maybelline, Lancôme, and L’Oréal all had male KOLs fronting beauty products. The most famous, of course, is the aforementioned Li Jiaqi, who amazingly sold 15,000 lipsticks in just five minutes, while wearing the lipstick himself.  

Left: Takuya Kimura’s 1996 commercial for Kanebo; Right: TFBoy’s Karry Wang promotes lipsticks for Lancôme.

China’s pop idol fever has become a proven method to gain millions of interactions from a single post and has proven particularly pivotal in this sector. Add in the lure of boy brands, such as Uniq and TFBoys, and these contracts can run into big bucks for famous figures; This week alone C-Beauty brand Florasis (or Huaxizi) taped the boy group Teens in Times as its ambassador on official social channels.  

And these days, the fan economy is no less tricky, and “Little Fresh Meat” (Xiao Xian Rou) attract a much older audience as well. “Even luxury’s target audiences are getting younger, so it’s clever now that they are using male celebs to promote, but interestingly this “Little Fresh Meat” category also appeals to women in their 30s or 40s who are actively following these young men,” Wang stated.  

Implications for brands who must proceed with caution

All major beauty brands now are targeting these ambassadors fans, meaning the ruling could upend their KOL strategies. So, where exactly does this leave names, from Fendi to Burberry, who are working with these beautiful, young men? As Wang noted, for now, the official documents don’t necessarily mention putting regulations on how celebrities or influencers look; however, they do hint to them as a negative influence. 

“I don’t know yet if there will be any immediate impact on brands doing marketing or working with celebrities, but if I were in PR, I would be very cautious about this as you don’t know where it will end. And international brands will be the first targets — skincare and beauty brands, but luxury fashion houses too,” she added. 

Beauty could be especially hard hit if the overall trend is to move away from this androgenous look. No longer might we see inventive campaigns such as Yatsen Global’s brand Little Ondine’s which showed spokesperson Tao in both a male and female version of its makeup line. And naturally enough, some would be happy as not all Chinese citizens are open to gender blurring aesthetics. 

Little Ondine promotes its colorful eyeliners with Chinese idol Tao. Photo: Little Ondine’s Weibo

A video released from CCTV a number of years ago featuring this look received much negative feedback, such as, “men should be like men.” These “men” could well include the well-built actor Peng Yuyan, one of them most recognizable actors in China’s film industry and the global ambassador for an LVMH’s label, Berluti. This is a sophisticated menswear brand however, indicating that certain consumers will only buy from certain KOLs. 

If the overall trend is to move back to a more traditional version of masculinity, there might well be pressure for beauty to move away from these gender neutral or feminine idols; clothing seems to be less conflated. However, the premise of co-opting influencers because of fans is always going to be challenging, especially when particular endorsements say: if you want to be attractive like this idol, then you need to be sporting this look. 

“Even though the government might be pushing this, I can’t see it happening soon. The consumer will still want to look how they want to look and in China there’s an awareness that they don’t need to look certain ways or stereotypes,” Wang concluded.  And consumer power is no more evident than in China. 

Best Brand Collaborations February 2021

6 Brand Collaborations China Loved In February

Every month, CCI looks back at some of the most memorable initiatives in China’s active brand collaboration scene, where creativity and ability to connect with Gen Z and millennial consumers on the latest trends are keys to success. 

Top Pick: H&M x Pronounce

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Taking Chinese-style collaboration global, fast-fashion retailer H&M announced an upcoming drop created with the independent Chinese label Pronounce. The collection, designed by Yushan Li and Jun Zhou, takes its inspiration from China’s famed Crescent Lake in Dunhuang (an oasis on the ancient Silk Road) and traditional folk tales, with graphic patterns and embroidery in shades of burgundy and gold.

“We developed this collection during the pandemic. The idea of a lake in an oasis to us symbolizes a sense of hope in a difficult time,” Li told WWD. “We imagined a hike in front of the Crescent Lake, and we explored the subtle layers of everyday wear and combined them with unique craftsmanship to provide more possibility for the wearers.”

Pronounce has become a savvy pick for numerous other brands (such as Diesel, Gap, and Mini Cooper) seeking to reach China’s young, culturally-inclined consumers and fans of guochao (“national trend”) style, as the designers fuse traditional aesthetics with the sensibilities of contemporary streetwear. Pronounce’s latest menswear collection, for example, explores Chinese pottery from both physical and philosophical perspectives.

The collection will be sold through H&M’s premium streetwear label, Blank Staples, which is only available at select stores around the world, though in China it will be available via multiple channels, including H&M’s website and app, official Tmall flagship store, and WeChat store.

Five more noteworthy collaborations from February 2021:

Randomevent x “A Writer’s Odyssey”

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In the hyper-competitive Spring Festival marketing season, it’s become imperative for brands to look beyond standard forms of collaboration model and place a greater emphasis on creativity through partnerships. This is especially true in the fashion sector, where brands vie to outdo each other with holiday-themed limited-edition collections for either gifting or self-treating.

Rather than just put out designs that relied on the Chinese zodiac (the Ox this year), the Shanghai-based streetwear label Randomevent paired up with one of the hottest IPs of this year’s holiday, the suspenseful fantasy epic “A Writer’s Odyssey” (刺杀小说家). The men’s capsule collection includes embroidered jackets, t-shirts, hats, and other apparel that merges contemporary street culture with more traditionally-inspired imagery from the film— a combination meant to appeal to the growing number of fans of guochao (国潮, “national trend”) style.

Peacebird x Six Chinese Fashion Brands

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In the current era of “mega collaborations,” straightforward one-on-one brand partnerships may no longer be enough to stand out from the crowd. Chinese fashion label Peacebird teamed up with six domestic indie brands to expand on its “SuperChina” initiative, with designers from each taking the signature elements from their respective brands to create a capsule collection aimed at Gen Z consumers.

The SuperChina campaign also invited creative professionals from a variety of backgrounds to interpret the theme of the series via their unique personal styles, and Peacebird brand ambassador and uber-influencer Ouyang Nana also promoted the collection via Weibo videos.

Perfect Diary x Disney

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C-beauty brand Perfect Diary frequently uses brand collaborations as part of its broader strategy to win over China’s millennial and Gen Z consumers. A recent partnership with Disney introduced a limited-edition series of its amino acid-based facial cleansing products reimagined with inspiration from the Baymax character from the 2014 animation “Big Hero 6.”

Appealing to the love of cuteness and blind-box style toys among young consumers, two of the makeup remover bottles are capped with a Baymax head, while other products feature illustrations of the character on the packaging. The simple features of the superhero robot figure, rendered in black and white, mesh nicely with the minimalist aesthetic of Perfect Diary’s collection.

Honor of Kings x Peking University History Department 

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Higher education represents a new and largely untapped new front in China’s booming brand collaboration scene. After partnering with a range of top-tier consumer brands — from MAC Cosmetics to Burberry — Tencent’s Honor of Kings launched a strategic cooperation with the history department of Peking University (often called the “Harvard of China”).

The partnership involves working with two professors to jointly produce content for the game’s “Chang’An Competition Year,” named after the capital city for much of the Tang Dynasty (618-907), which is widely regarded in China as the peak of ancient civilization. Tencent also released an immersive mobile VR tour of the game’s Chang’an scenery and launched a public co-creation competition focused on art, design, video, and dance.

Ikea x ROG

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Taking a “China-first” approach to product innovation, Ikea debuted a hotly anticipated collaboration with Asus Republic of Gamers (ROG) on a new range of affordable gaming furniture and accessories. The jointly designed Uppspel family of products was launched in China in February, but will not reach the rest of the world until later this year, highlighting the importance of the Chinese market and its estimated 720 million gamers.

The black-and-red collection includes a sleek high-backed gaming chair priced at RMB 999 ($155), an adjustable table that can be used as a standing desk (with a more premium price point of RMB 3,999, or around $620), and a wall-mounted pegboard to keep gaming equipment organized. Ikea is also introducing a series of self-designed items that will be useful for gamers, like a headphone stand, cupholder, and floor mat.

This post originally appeared on Content Commerce Insider, our sister publication on branded entertainment.

Givenchy Brand Ambassadors China

Givenchy’s New China Ambassadors Have Work to Do

What Happened: On March 3, Givenchy announced two new brand ambassadors, the actor Fan Chengcheng (brother of Fan Bingbing) who is also a singer in the boyband Nine Percent, and the actress Ouyang Nana. Givenchy, who appointed Matthew Williams as its creative director last year, had already been developing relationships with the celebrities: Both attended its recent pop-up at the Beijing SKP mall earlier this year and promoted its exclusive edition, Antigona handbag. Givenchy also launched an official beauty store on Tmall at the start of the pandemic, which gained a whopping 500,000 followers on the opening day.

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The Jing Take: Givenchy is gearing up for its Paris Fashion Week show later this week, making this the ideal time to announce two new ambassador hires in China. The news quickly trended on Weibo’s top 10 classifications, and the topic generated almost 400 million views on its official Weibo account, unsurprising as the two are beloved by China’s Gen Zers. However, several netizens used the opportunity to remind fans of Givenchy’s 2019 T-shirt scandal. Much of this discussion was captured in response to a post about the announcement by the influential fashion KOL Pipijuice (with 1 million Weibo followers), where many of her readers argued that it has still not apologized adequately.

Moreover, Givenchy is failing to reach anywhere near the popularity it had under the creative direction of its previous designer Riccardo Tisci. Putting Williams at the helm was predicted to give it a boost on the mainland given his streetwear credentials. But the brand will need to do much more. And while the two stars can amplify, they have a combined following of over 40 million fans, who knows if this can convert into sales.

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.



Brand Diversify China GenX Marketing

When China’s Luxury Market Sputters, Brands Must Diversify

Key Takeaways:

  • International travel was brought to a standstill by COVID-19, so Chinese consumers stayed home and looked for alternative leisure activities like buying luxury items.

  • Around 70 to 80 million Chinese lost their jobs or could not work starting at the end of March of 2020, and 8.7 million recent graduates entered the country’s workforce in 2020.

  • China’s economic growth hit a 44-year low in 2020, so all signs are pointing to a significant cooling of that economy.

Last year, the luxury goods market was deeply affected by the COVID-19 pandemic, with sales registering a sharp decline reminiscent of the one initiated by the 2009 financial crisis. Bain & Company reports that the core personal luxury goods market fell by 23 percent year-on-year to hit $263 billion. This drop is the largest recorded since Bain began monitoring the industry.

Growth forecasts for the personal luxury goods industry in 2021 vary significantly. For example, Bain estimates that recovery to 2019 levels won’t occur until 2022 or 2023, while McKinsey forecasts a positive growth of 1 to 4 percent in 2021, compared to 2019.

And even when market participants and investors are optimistic about the industry’s recovery, their predictions and forecasts vary. Yet, they all agree that China will become the driving force of the industry.

China is on track to become the world’s biggest luxury market by 2025, and local consumption has “roared” ahead even during the global pandemic, according to Federica Levato, a partner at Bain’s luxury goods vertical.

Having said that, it’s worth mentioning that while international travel has been brought to a standstill, Chinese consumers who stayed home looked for alternative leisure activities. Instead of traveling to Europe, they spent their funds on luxury purchases. However, this positive trend will likely slow down once life returns to normal and international travel resumes.

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But, unfortunately, China’s cooling economy could cause serious problems for the luxury industry. Consumer debt has expanded, and the free-spending younger demographics are hardly coping well with financial stress. Considering that these debt-ridden shoppers are luxury’s most valuable consumers, the industry should prepare for possible setbacks shortly. Plus, the country is also grappling with high unemployment.

Last year, the domestic brokerage firm Zhongtai Securities released a report measuring China’s real unemployment rate at 20 percent. And according to UBS analysts, around 70 to 80 million Chinese lost their jobs or could not work starting at the end of March. Additionally, 8.7 million recent graduates entered China’s workforce in 2020.

China’s economic growth also hit a 44-year low in 2020, according to Reuters. As such, all signs are pointing to a significant cooling of that economy. So what is next for the luxury industry now that it has become even more dependent on China?

Unfortunately, the industry seems ill-prepared to deal with a new crisis. If anything, the COVID-19 pandemic has exhibited the industry’s flaws and showed its inability to stay ahead of the curve or have a visionary strategy for long-term growth. In fact, the luxury industry always seems to be one step behind cultural changes, digital transformation, and the implementation of cutting-edge solutions and technologies. This issue hinders economic opportunities and makes it impossible to find additional revenue streams.

There is much talk these days about the democratization of luxury. But despite improvements, the industry remains quite selective and exclusive. Instead of peddling European elitism as it did in the past, the industry now focuses on the needs of Chinese teenagers and young adults, hardly ever considering more mature demographics. So, what of China’s older, wealthier cohorts — for example, the country’s seniors, aged 60 and above? This group already owns properties and enjoys retirement savings. As such, they represent a money-making opportunity but are often overlooked.

Instead of going to great lengths to achieve loyalty from a traditionally disloyal segment or trying to cater to millennial whims, brands should redirect some of their marketing efforts toward this oft-ignored demographic segment. It should be noted that China’s group of seniors will grow to 300 million by 2025 and 400 million by 2033, according to the Office of the National Working Commission on Aging.

Well-heeled Gen Xers are also worthy of consideration. This group is gaining fame thanks to its professional and financial success. And as self-sufficient individuals who directly experienced Deng Xiaoping’s economic reforms, they are far better off than the pampered, younger demographics. Yet, luxury brands don’t have elaborate marketing campaigns or selling strategies in place for them.

The luxury industry shouldn’t just reach out only to new audiences in China, though, but also to new markets in the Asia-Pacific, African, and Latin American regions. Growth can be further spurred by entering emerging markets where local elites are underserved.

Instead of aggressively expanding physical retail in lower-tier Chinese cities, luxury brands should consider enhancing their distribution channels or brick-and-mortar stores in other Asian countries like Thailand, Malaysia, and Vietnam that have become new luxury vacation destinations to the Chinese elite.

Luxury brands who want to thrive in the post-COVID-19 world need to reach out and become truly egalitarian. Currently, a China-centric approach might bring temporary gains. But in the long term, it isn’t likely to sustain profitable growth.

Yatsen Eve Lom

Owner Of C-Beauty ‘Unicorn’ Perfect Diary Acquires Eve Lom

What Happened: Yatsen Holding Ltd. (NYSE: YSG), the parent company of the China-based beauty industry unicorn Perfect Diary, announced on March 2 that it is acquiring the prestige skincare brand Eve Lom from Manzanita Capital. In the deal, Manzanita will retain a minority stake in the business and enter into a strategic partnership with Yatsen. Following the news, the Yatsen shares spiked in value. The company owns leading C-beauty brands Perfect Diary, Little Ondine, and Abby’s Choice. And recently, it acquired the French premium skincare brand Galénic. Last November, the company filed for its IPO status in the US and raised over 600 million dollars.

Jing Take: This deal is just the latest in a line of Western brand acquisitions made by Chinese conglomerates. Recently, Sequoia Capital China acquired a controlling stake in AMI, LionRock (Clarks), and Fosun (Lanvin), just to name a few. While Western brands are finding their way into China, local brands have come out by slowly building their brands. Yet few have successfully tapped into luxury.

Wellness and self-care are two of the highest opportunity sectors today, and the global skincare market is predicted to jump to 463.5$ Billion by 2027. With this move, Yatsen’s international ambitions have become clearer (the significant funds raised during its public offering back up this vision.) Meanwhile, Yatsen has revealed that this money will go to its marketing, operations, strategic investments & acquisitions, product & technology development, and physical retail expansion beyond China — which means the company isn’t just eyeing the China market.

However, while C-cosmetics are finding wide popularity among Chinese consumers, skepticism around those skincare products persists. Chinese beauty brands do not have long-established laboratory backgrounds and lack exclusive formulas, making it harder for them to acquire luxury positioning. The acquisition of premium skincare brands from the West does not only help Yatsen secure a global distribution network; it also offers the brand access to top laboratories. As such, this deal is an unmissable chance for Yatsen to expand its product offerings around the world.

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.

Milan Fashion Week 2021 Chinese audiences

Milan Is In The Mood For Fashion

This season’s Jing Daily Fashion Week Score moves to Milan to analyze which brands and designers best-engaged with online Chinese audiences. And although some big names were missing (Gucci, Bottega Veneta, Versace, and local favorite Angel Chen were all absent from the schedule), the show still went on(line) in Milan.

But like much of what is happening now, it has become a tale of two sides. It’s hard not to connect this year’s schedule holes to COVID-19, which Camera Nazionale Della Moda Italiana says reduced turnover by 25 percent. But for brands like Fendi, which dished up a palate-cleansing collection, sales have gone up. Prada also reached profitability during 2020, with its sales jumping up by over 50 percent in China.

From a 1920-style cabaret setting to the Piccolo Teatro di Milano, designers made herculean efforts to present pre-recorded runways and fashion films. But disappointingly, engagement with fans in China was scant. Few ambassadors were involved this week. But when they were, names like Zhao Wei for Fendi, Mr. Bags for Ferragamo, and  Sun Rui for Ports 1961 worked their magic.

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Prada, however, always has it nailed. This season, the brand offered up a textbook example of how to cultivate engagement by enlisting no fewer than eight celebrities — including actress Jin Chen and new faces like Fei Qiming — and over thirty KOLs to share posts. By the end of the livestream, views had hit 41 million.

The Jing Daily Fashion Week Score is based on the following parameters:

  • Model representation: evaluates representation of Chinese models on the runway.

  • Digital impact: evaluates Chinese netizen reception and engagement on leading social media platforms, including Weibo, WeChat, and Little Red Book.

  • KOL / celebrity visibility: considers the star power associated with strategic KOL and celebrity partnerships.

  • Special brand efforts: considers special programs or efforts on a brand’s part to speak to the Chinese audience. Company or brand contributions toward the on-going virus crisis are also considered.

  • Design context: a qualitative assessment of how the brand’s collection will speak to the Chinese audience based on current trends and preferences.

  • Brand history: considers existing history in China, including overall presence, social reach, number of stores, earning trends, and missteps.

Prada

“Ease and movement” summed up the latest collaboration by Miuccia Prada and Raf Simons, with the house’s Fall 2021 ready-to-wear collection spotlighting knits and drop-shoulder silhouettes (developed for Fall 2021 menswear) as well as glittering paillettes and soft faux fur, exploring a fluidity between masculinity and femininity. The effort was explained by Simons as an attempt to connect men and women — the masculine in women and the feminine in men — inspired by ideas of change and open possibilities. This time, Prada continued its seasonal conversation by featuring the designer duo alongside five other creative talents.

This season, the heritage brand leaned on social engagement by leveraging extensive celebrity endorsements: eight celebrities in total, including actress Jin Chen and new faces like Fei Qiming. Over thirty KOLs were also called upon to share relevant social posts both before and after the show. By the end of Prada’s livestream, viewership on the Jiemian, Weibo, and Douyin platforms rose to 41 million, proving the brand’s solidity and that its previous controversy with brand ambassador Zheng Shuang was ancient history.

Fendi

Kim Jones’ first women’s ready-to-wear presentation with Fendi paid homage to the house’s legacy with a deft and dynamic hand, as his methodological and meticulous approach reinvigorated the heritage brand with a modern twist that redefined woman-power in a contemporary context.

To drive pre-show engagement of Jones’ highly anticipated ready-to-wear debut, the brand had ambassador Zhao Wei and leather goods ambassador Zhang Ruoyun post invitations to the show’s livestream on Weibo. Together, they have a combined social following of 111 million and attracted over 12 million views among Chinese audiences to the virtual presentation as of publication.

Max Mara

To mark Max Mara’s 70th anniversary, Creative Director Ian Griffiths turned the runway into a celebratory procession. The collection featured the house’s iconic 101801 and teddy bear coats but also more functional silhouettes, bomber jackets, quilted gilets, and liners in new colors like khaki and green.

Apart from posting the virtual presentation on Weibo, Max Mara failed to initiate special social efforts. However, its online traffic has been growing organically, thanks to actress Zhang Xiaofei. The new star gained recognition from her acting in the blockbuster film Hi, Mom, which was launched during the Spring Festival. The actress’s endorsement at the 2020 Weibo Night Gala on February 28 resulted in netizens commenting that her appearance and personality perfectly match Max Mara.

Valentino 

Valentino’s Fall 2021 ready-to-wear presentation “Valentino Act Collection” was unveiled at Piccolo Teatro di Milano. The show was part of Pier Paolo Piccioli’s ongoing project, which digitalizes and catalogs over 10,000 pieces to create an interactive archive. Black-and-white tones — along with the brand’s iconic check, lace, and rivet — dominated the line-up, balancing house heritage with sleek playfulness.

The show’s broadcast on Weibo garnered over 6 million views on Weibo within an hour, while its livestream on Tencent Video, featuring Chinese singer Curley G from the girl group Hard Candy, drove considerable traffic for the virtual screening event.

Bally  

Legacy Continua pays tribute to this brand’s 170-year-old heritage and extraordinary leather craftsmanship. For its anniversary, Bally invited Offshore, a well-known Swiss design studio, to create a celebratory monogram. The iconic Bally Stripe has been reinterpreted through an embossing technique that emphasizes a trompe-l’oeil effect and uses 100-percent renewable or recycled materials, as well as natural and environmentally friendly dyeing processes.

Bally’s Chinese (and global) social media accounts have been extremely low-key, and exposure has mainly relied on the social platforms of major publishing companies like Madame Figaro, Rayli, and InStyle, helping the brand gaining 54,000,000 impressions on Weibo.

Salvatore Ferragamo 

Paul Andrew created a “future-positive” world, driven by digital improvements and sustainability for a greater post-COVID social context. Influenced by the American science fiction film Gattaca, the brand’s Fall season presented an optimistic yet futuristic vibe through the designer’s revisions of typical uniforms in sectors like military and sports.

While the embrace of digital and sustainable trends should resonate with young generations in China, the brand did not emphasize that enough on social channels, unlike some other brands. Though the brand’s official account still received a high engagement (thanks to fashion KOLs such as @Mr.Bags and @Fil小白), some social followers wanted more visibility for its ambassador Lin Yun within the brand’s campaign.

MM6 Maison Margiela 

MM6 Maison Margiela presented a topsy-turvy show this Fall 2021 season, drawing inspiration from the uncertainty and absurdity of our post-pandemic situation. The reversed blazers, inside-out denim jacket, and jeans, as well as upside-down knitwear, all conjured up an inverted world, based in a theatrical cabaret setting from 1920s Paris.

Two teasers and a five-minute presentation were posted on the official Weibo account, garnering nearly 13,500 views. While the brand maintains a low profile on social media, the show still generated impressive organic online content as well as positive reactions from Chinese audiences.

Shuting Qiu 

The Shanghai-based designer showed her Fall 2021 collection via a three-minute short film titled Water Ripples, which was filmed in the designer’s tranquil hometown of Hangzhou. Standing next to lakes and rivers, the models reflected the movement and fluidity of time. This collection also paid homage to the Swiss feminist artist Miriam Cahn, who explores the dynamics between self and surroundings. More than half of the garments were made from a stock of previous collections and newly introduced sustainably-sourced faux fur.

The designer brand has now built recognition in the local market due to endorsements from celebrities like Jolin Tsai, Wang Linkai, and Coco Lee, as well as a partnership with local retailer LABELHOOD.

Ports 1961 

Art director Karl Templer and his design team once again embarked on a journey of inspiration and discovery. By blurring the boundaries of functionality and attractiveness, the collection added a touch of homely comfort to the brand’s looks: a sculptural coat with buttons on the back, a flowing windbreaker, and layered skirts, each showcasing the new season’s indoor aesthetic.

An invitation to watch with Sun Rui, a member of the all-girl group SNH48, drove exposure to the brand’s Weibo account. Rui’s fans greeted this with positivity, saying, “Thank you for inviting SunRui, truly looking forward to the show.”

Sara Wong 

For Fall 21, Sara Wong (who is the creative director of her eponymous brand) presented her collection through a video-story created in partnership with Vogue Talents. The collection, called Tartary — Shades of Mongolian, was inspired by the 19th New Culture Movement in China when several Mongolian intellectuals returned from overseas and brought Western culture to China.

The inspiration was well-received by Chinese audiences, who praised its originality and called it “sublime.” Surprisingly, the Shenzhen-based brand failed to promote the show in its home market, where it has an impressive 183 stores and has won considerable notoriety on digital platforms like Little Red Book 10,000+ UGC. The video-story has reached over 5,000 views on Instagram but only 540 on Weibo.

Hui 

Zhao Huizhou is the founder and creative director behind this Shenzhen-based brand in its seventh outing at Milan Fashion Week. A few days before the launch of its Fall 2021 film, the brand invited several influential people to offer good luck to the brand, which launched a competition to encourage netizens to like and repost. The cultural elements can be seen in shadow puppetry elements that resonated with Chinese netizens and raised sentiments.

Dolce & Gabbana 

For Fall 2021, Dolce Gabbana presented DG Next Chapter, created in collaboration with Istituto Italiano di Tecnologia. The collection blended craftsmanship with technology while exploring the brand’s made-by-hand (or ‘Fatto a Mano’) craft through the new lens of robotics research and Artificial Intelligence. It was a colorful ’90s vibe, mixed with futuristic elements; robots even carried iconic handbags. In some way, Dolce & Gabbana is helping define the next chapter of fashion.

Netizens have not openly welcomed the return of Dolce & Gabbana to China since its 2018 scandal, and the Little Red Book keywords “dolce gabbana” are still banned from the search engine. And Chinese audiences did not spare Dolce Gabbana’s pre-show announcement, furiously commenting “Get out of China” and “Please don’t forget his insult to Chinese people.”

Reported by Wenzhuo Wu, Lisa Nan, and Gemma A. Williams.

China secondhand market depop

What Can China Learn From the West About Secondhand Fashion?

Long before sustainability became a central concern among socially conscious global citizens, Gen Z and millennial consumers in the West were relying on secondhand apparel as a badge of authenticity.

Emma Davidson, fashion features editor for style magazine Dazed, told CCI, “When I think back to going to charity shops [as a teenager], it was to supplement my wardrobe with cool pieces, rather than build a wardrobe in a sustainable way.”

According to Deloitte, the current love for thrifting among Gen Z youth derived partly as a result of the Great Recession more than a decade ago, when the oldest members of that demographic were in their formative early teen years. For them, part of growing up with financial hardship meant learning to save by shopping secondhand.

In contrast, China’s Gen Zers came of age during an astonishingly rapid rise in affluence, reaching adolescence as the nation saw the greatest annual GDP growth among the world’s major economies. As they reached adulthood, they have come to be known as the “moonlight clan” for their ability to spend an entire month’s salary over the course of a single lunar cycle, boasting an average monthly purchasing power of RMB 3,501 ($507).

For these Chinese consumers, the cheapest finds are less important, and the secondhand luxury market may hold greater appeal. Yet resale only accounts for around 5 percent of the overall luxury market in China, whereas in the United States it represents 31 percent of total sales, according to a 2020 report by China’s University of International Business and Economics and Isheyipai.

China’s demand for luxury goods, coupled with a cultural superstition that used clothing is unlucky, meant that the potential market for used apparel was largely ignored until recent years, a period during which secondhand sales boomed in the West. According to ThredUp, the resale sector is set to be larger than the fast-fashion market by 2029.

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Alibaba launched its re-commerce platform Idle Fish in 2012, with China’s PoizonPlum, and Ponhu arriving on the scene a few years later in 2015, followed by luxury livestreaming platform Feiyu’s move into secondhand sales in 2018. In the West, leading luxury resale platforms Vestiaire Collective and The RealReal launched in 2009 and 2011, respectively, focusing on the promotion of a circular fashion economy while also capitalizing on consumer interest in archival pieces.

Vestiaire Collective has developed a high-end editorial brand image with a green conscience, which has been enhanced by its work with A-list influencers including Chloe Sevigny, Olivia Palermo, and, more recently, fashion activist Nicola Cheung Young. The retailer’s marketing consistently focuses on sharing the stories behind items offered for sale in order to elevate the perception of secondhand fashion, such as through a YouTube series of interviews with expert vintage sellers or a 2019 Selfridges pop-up featuring rare pieces by the likes of VersacePaco Rabanne, and Maison Margiela.

As its name implies, e-commerce platform TheRealReal prides itself on professionally authenticated pre-loved art and designer fashion. Sasha Skoda, women’s category director at The RealReal, told CCI that, “By taking possession of all items and handling the entire process for the consumer – authenticating, merchandising, photographing and shipping – we established newfound trust and ease that I think helped set a real precedent in resale.”

The introduction of brick-and-mortar spaces has helped TheRealReal combat any lingering concerns from buyers about product authenticity (an issue that China is all too familiar with). “We opened Luxury Consignment Offices and stores where people could come in, engage with our experts, understand resale value, and touch and feel a Birkin or try on a Rolex,” explained Skoda. “These physical locations played a big part in introducing luxury consignment to those who weren’t quite comfortable shopping online for more high-value items.”

Opulent pieces with a history are central to TheRealReal. Chief Operating Officer Rati Levesque said, “We’ve seen more consumers adopt a heightened value consciousness and appreciation for sustainability. We’re seeing them shop with an investment mindset.” The top consumer trends at TheRealReal are investment pieces, new capsule wardrobe essentials, and vintage styles from the late 1990s to early 2000s.

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Founded in 2011, trailblazing resale app Depop also aims to satisfy the appetite for fashion from the turn of the millennium, though at a lower price point, as some 55.7 percent of its users are teenagers. The platform has succeeded in fostering community around a shared affinity for cool style (rather than what’s seen on the runway) and places sellers at the center of its marketing strategy. Apart from appearing in every campaign, Depop sellers have also been scouted to join the head office in London, becoming an instrumental part of how the company brands individuality.

Depop’s pop-up at Selfridges in 2019 further cemented its status as an epicenter for the production of social capital around subcultures and style. According to Dazed magazine’s Davidson, “Given the homogenization of the high street and behemoths like PLTBoohoo, et cetera, dominating the scene with the same line-up of clothes, Depop offers an opportunity to cultivate something different from the masses.”

Francesca Muston, vice president of fashion at trend forecasting firm WGSN, added that “Secondhand marketplaces like Depop have introduced a social selling element to resale.” By incorporating features such as creative product photography and direct messaging, Depop highlights how sales and social media can be merged on one platform.

“Resale is no longer about buying or selling something cheaply,” said Muston. “It’s now allowing consumer demand to set the price based on what is arguably a better representation of its true value.”

Whether that value is a socially-constructed obsession with streetwear, or archival fashion that was last seen on a catwalk in the 1990s, successful secondhand retailers share common ground in their understanding of the power of storytelling, a strategy that can be incorporated to both appeal to China’s Gen Z and millennial shoppers and glamorize the concept of used clothing for older generations who may still be unsure of participating in the fast-growing, sustainable industry.

This post originally appeared on Content Commerce Insider, our sister publication on branded entertainment.

Farfetch Tmall China

Is China Ready for Farfetch’s Tmall Launch?

What Happened: On the heels of its landmark deal with Alibaba and Richemont last November, Farfetch is finally breaking ground in China. On March 1, the fashion e-tailer officially launched its store on Tmall, offering local consumers 3,500 brands such as Loewe, Off-White, and Pomellato — 95 percent of which did not have their own set-up on the site before. 

Farfetch’s new storefront is front and center on Tmall Luxury Pavilion’s homepage, boasting a premium permanent banner and one of five main navigation buttons. To entice shoppers, the British-Portuguese company is collaborating with Chinese influencers, running promotions its opening week, as well as providing the option of interest-free installments. And it’s working: these activations have already helped the marketplace draw 25,000 followers as it begins to refine its localization strategy.

Jing Take: After 12 years of operation, Farfetch reported last week that it hit profitability for the first time in 2020, thanks to its digital-first approach and budding China presence. The launch on Tmall is not only set to accelerate this growth, but also help the business test the market and position itself for deeper digital penetration. As CEO José Neves told Women’s Wear Daily about the e-commerce learning curve: “These platforms, they are a Google and an Instagram inside an Amazon. Just because you have a shop does not mean you maximize your traffic.” Credit Suisse analyst Stephen Ju forecasted that Farfetch’s active shoppers could hit 30 million in the next five years if it plays its China cards right. 

For brands, the Farfetch-Alibaba deal means access to one of the world’s largest stores and its 779 million consumers — a drastic change for many that did not have an e-commerce presence in the country to begin with. (Because China has strict laws about how foreign businesses operate and sometimes requires them to partner with an existing Chinese business, the barrier to entry is often too high.) Now, however, even small brands get to swim with the big fishes and profit off China’s insatiable luxury appetite. Senreve, which already had a Tmall platform outside of Farfetch, has seen growth in China surge 10 times year-over-year with its online and offline operations.

As Farfetch starts to “test and fail and learn” in China, it remains to be seen how its Tmall store will differ from competitors like Net-a-Porter. Moreover, as other e-commerce players ramp up their digital strategies — Mytheresa, for one, recently saw its profits double from new users — the company has a long way to go to win over Chinese consumers. But having fan favorites like Alibaba and Richemont in its corner will certainly help.

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.

Brand Purpose Covid Prada

3 Reasons ‘Purpose’ Is Today’s Hot New Marketing Trend

Key Takeaways:

  • During the early days of the pandemic, LVMH won fans by devoting its perfume production lines to making hand sanitizer for French hospitals, as did Prada, which manufactured 80,000 medical overalls and 110,000 masks to distribute to Italian healthcare workers.

  • Today, socially-conscious initiatives resonate well with consumers, and the pandemic has provided an even greater reason for luxury brands to intensify a purpose-driven image.

  • Over 62 percent of customers said they were more likely to reward brands that took extra steps to ensure their employees’ wellbeing during the lockdown.

Luxury brands did not hesitate to demonstrate a spirit of solidarity when helping to combat the COVID-19 pandemic. A distinctive feature was luxury brands’ ability to provide practical and visible assistance. Many companies quickly switched to manufacturing personal protective equipment (PPE) and other essential supplies. For example, LVMH devoted its perfume production lines to making hand sanitizer for French hospitals, while Prada manufactured 80,000 medical overalls and 110,000 masks to distribute to Italian healthcare workers.

But purpose-driven initiatives are not new for these brands, and luxury consumers expect their brands to take a position on social issues. For example, Gucci’s Chime For Change initiative, set up in 2013, has been instrumental for gender equality. The campaign has raised nearly $17 million to support projects in 89 countries. As these initiatives resonate well with socially-conscious consumers, the pandemic has provided an even greater reason for luxury brands to intensify a purpose-driven image. But ultimately, stakeholder pressures are crucial for change, disrupting how luxury brands deliver value beyond their products or service offerings.

Consumer Belief

Data presents a compelling case that consumers do care — and care deeply. According to YouGov Direct data, 60 percent of Americans are more likely to purchase from a company that has aided in the COVID-19 pandemic (YouGov, 2020). Similar findings were reported in a PWC survey in France. However, Chinese consumers are even more likely to reward companies that are perceived as delivering a positive impact. In an Edelman survey, 88 percent of respondents agreed that the way brands respond to the coronavirus crisis significantly impacts their future purchase intentions.

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Investor Sentiment

Investors are increasingly using criteria like the environmental, social, and governance (ESG) rating system to determine their investment decisions. ESG screening has even entered into mainstream investment policy. And the impact of COVID-19 will only accelerate the use of ESG in investment decision-making. According to an ISS survey of global assets managers, five percent of respondents reported that social issues attract more of their attention now than they did before the COVID-19 pandemic. This phenomenon is reinforced by a J.P. Morgan investor survey, in which 55 percent of respondents expect COVID-19 to be a positive catalyst for ESG investment over the next three years.

Talent Engagement

Talent engagement refers to the emotional commitment an employee has to his or her organization. This issue matters because engagement correlates with critical human factors like motivation. BCG research shows that 67 percent of millennials expect employers to have a purpose and that their jobs will have a societal impact. This research implies that companies supporting Covid-19 initiatives will own greater employee engagement. In a UK survey, 63 percent of respondents said employee engagement had increased during the COVID-19 crisis.

Indeed, the outbreak of COVID-19 has certainly demonstrated how companies value their employees. For instance, Lululemon, Sephora, Apple, and Abercrombie and Fitch continued to pay their US employees while their stores were closed in the initial weeks of the lockdown. It pays for brands to see the bigger picture. According to a Deloitte survey, 62 percent of customers said they were more likely to reward brands that took extra steps to ensure their employees’ wellbeing during the lockdown.

COVID-19 will continue to disrupt the traditional luxury business model. Today, purpose matters. It is not just about ticking the right boxes. Moral authenticity must be the cornerstone of any purpose-driven marketing campaign — ask any consumer, investor, or employee. So, what is your ‘purpose strategy’?

Glyn Atwal is an Associate Professor at Burgundy School of Business (France). He is co-author of Luxury Brands in China and India (Palgrave Macmillan).

Luxury game new rules

Luxury Is A New Game. These Are The New Rules

Key Takeaways:

  • With a handful of exceptions, most luxury brands lost money in 2020, with drastic declines in their core regions (Europe and North America). But these troubles were due to more than just lockdowns.

  • The unprecedented magnitude of China’s rapid growth in 2020 was a one-time effect. China will still be the top growth driver of the luxury industry in this decade but don’t expect 2020 growth rates to continue.

  • Generation Z (consumers up to 25 years of age) has become the most influential consumer group and will dethrone millennials as the number one customer group for luxury by 2030.

Through a series of webinars, I recently had the chance to share my view on the luxury market in a candid discussion with over 200 luxury brand leaders from around the world. The series was thought-provoking, eye-opening, and even shocking to some participants, initiating deeper reflection on the need for radical change.

My conviction is that luxury brands must be brutally honest about the magnitude of change occurring in the luxury industry. We are not just living in times of disruption and rapid change; we are witnessing the most fundamental change in the recorded history of luxury.

The pandemic disruption has already rattled the luxury industry to its core. With a handful of exceptions, most luxury brands lost money in 2020, with drastic declines in their core regions (Europe and North America). But to assume that this was just a result of closed stores during lockdowns underestimates the deeper shifts happening.

Meanwhile, China’s rapid growth during 2020 was, in its unprecedented magnitude, a one-time effect. These gains were mostly driven by travel restrictions, forcing Chinese customers to purchase their luxury goods in Mainland China rather than Paris, Milan, Florence, or New York. It also meant they redirected their budgets — normally reserved for overseas trips — towards purchases of jewelry, handbags, fashion items, cars, and more. Once travel is possible again (some predict by mid or late-2021), many of these one-off effects will vanish. While I predict China will still be the clear growth driver of the luxury industry in this decade, we can’t expect growth rates like those in 2020.

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In other words, the pandemic reshuffled the cards, led to brutal short-term spending shifts across regions/categories, and impacted consumer sentiment, behaviors, and expectations. However, brands hoping things will get back to “normal” after the pandemic will receive a rude awakening.

The game of luxury is changing at an unprecedented rate, and – importantly – the speed of that change is accelerating. Generation Z (consumers up to 25 years of age) has become the most influential consumer group. They already contribute  5-to-15 percent of luxury sales (depending on the country), and by 2030, they will dethrone millennials as the number one customer group for luxury.

Today, they are already influencing the purchase behaviors of millennials, who, in turn, had been the trendsetters for Gen Xers and above them. Generation Zers are, without a doubt, the smartest luxury consumers ever. They scrutinize every purchase, they do their (digital) homework, and they know more about luxury categories and brands than any generation before them. They are the most difficult to convince and are the most value-driven.

Because Gen Z has spent more time on social networks and digital platforms than any previous generation, they value interpersonal experiences even more and expect them to count. Brands that do not provide superior experiences — either online or off — are simply not relevant to them. And don’t expect them to suddenly like your brand as they mature because preferences are firmly formed in one’s early years.

Their attention spans are shorter than any generation before them — not because they are dumb, as their haters believe. In fact, it is the opposite: They are unbelievably smart and have learned to process information and data more efficiently than any previous generation. With so many choices available to them, they refuse to waste time. Gen Zers see themselves as brands, so, consequently, luxury brands must match their values.

These attributes have changed the luxury game in the most profound way imaginable, as 95 percent of purchase preferences today are now decided during the digital journey. That means luxury brands either win or lose across the many digital touchpoints customers see — long before they even enter a physical or digital “store.” But to win this digital game requires a competitive digital advantage, which requires sophisticated digital infrastructures that allow brands to measure consumer sentiment and competitive dynamics in real-time.

When I asked my webinar audience if they could tell me how their brand’s perception had shifted over the past week or month versus their competitors, no one raised their hand. To me, that was a red flag that most brands — from market leaders to small brands — are not equipped with the right tools or insights to achieve digital competitive advantages.

And yet, this fault can be deadly if not addressed immediately. The new game requires digital leadership, not just the digital transformations all companies must suffer. Brands also need to know how consumer sentiments are shifting because they will underestimate the competitive activities aimed at their customer base. I have seen brands lose 20-40 percent of their customers within two-to-four years because they did not understand the magnitude of their competition and digital change.

But to truly reach younger customers, brand storytelling must also drastically improve. Luxury brand storytelling is a massive weakness for many brands. They still focus too much on item features while neglecting to clarify their brand equity aspirations. Many of them got away with this position when communicating to Gen X but aren’t going to with Gen Z. For them to reach the most sophisticated and discerning customers, brands must be authentic and convey relevant content and messages, which requires real-time customer insights. Otherwise, brands will dump millions of dollars into advertising that will never break through — all while their brand equities and sales drop.

The new game of luxury will be rewarding for brands that do their homework. Brands with proper brand positioning, real-time insights, and an understanding of sentiment shifts that allows them to create exceptional luxury experiences will win. But most importantly, they have to be authentic to connect with their customers better than their competitors, especially emerging ones. Over the next five years, as Gen Z takes over, we will see many established brands lose their relevance. New brands are ready to launch and have much deeper insights into younger customers and local cultures. They also have the digital savviness that many established brands lack.

Today, most brand experiences are not creating extreme value, and very few can consistently create magic or desire. While luxury brands always talk about the luxury experience, they rarely deliver it. And when dealing with Gen Z, the most experience-seeking generation, that is deadly.

No brand, no matter how big, is safe. Only the ability to reinvent their value creation models will save them. Brands cannot just stay relevant; they must gain a competitive advantage.

Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the professor of luxury strategy and extreme value creation at Pepperdine University in Malibu, California. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a global keynote speaker, and holds luxury masterclasses in Europe, the USA, and Asia. Follow @drlanger