From changes in social media app popularity and technological innovation to political issues and shifting consumer preferences, a wide variety of factors shaped China’s luxury industry in dramatic ways over the past year. As part of our year-end review for 2016, we rounded up the top 10 most-read articles on Jing Daily this year to revisit some of the the biggest developments.
As usual, technology stories were big this year, including luxury brands’ growing interest in WeChat e-commerce and the rise of new social apps. Meanwhile, Chinese consumer spending trends such as millennial purchasing habits and Gucci CEO Marco Bizzarri‘s assertion that the logo isn’t dead also gained a great deal of interest. And of course, political controversies and geopolitical developments such as Brexit and Trump’s election victory have been front and center in the minds of professionals mulling how they will affect Chinese luxury consumption, and how this fits into the big picture for the future of the industry.
“The fashion label is run by Beijing-born designer Wang Tao, who is descended from a Qing dynasty official and is called China’s ‘Queen of the Suit.’ Her label Taoray Wang’s suits’ signature style features bright Chinese patterns sewn into the linings, and she sources her fabric in Europe while designing and producing her collections in China. Prior to debuting Taoray Wang at New York Fashion Week in 2014, she studied fashion in Japan and rose to prominence in China as the head designer of the clothing brand broadcast:bo (broadcast:播). She sits on the board of the Shanghai-based Ribo Zhimei Fashion Co., telling Chinese media last year that the New York Fashion Week participation helps attract investment for the group.”
“China’s economic slowdown and market volatility have had only a small effect consumer confidence when it comes to spending, according to a recent report by global management consulting firm Boston Consulting Group. About 75 percent of Chinese consumers reported in a survey conducted by BCG’s Center for Customer Insight that they intended to spend the same or more this year, a small drop from 81 percent in 2015. Of these consumers, more than 40 percent are in what BCG calls the middle-class and affluent category (MAC), with marked ability to spend. However, slowing household income growth has likely had a slight negative impact on the willingness to spend.”
“No matter where they’re doing business, most major multinational consumer brands have one strategy when it comes to politics: stay far, far away. But from Google to Lego and most recently Lancôme, companies have learned that this is nearly impossible when it comes to doing business in China, where government censorship issues invade almost every aspect of public life in one way or another.”
“As the United Kingdom continues to deal with the numerous economic and political ramifications of the recent ‘Brexit’ referendum on its EU membership, one of the current government’s big diplomatic successes since its election last May is under threat of being undone; namely the windfall in tourism receipts it was due to expect following Prime Minister David Cameron’s announcement of streamlined visa policies for Chinese tourists made during Xi Jinping’s October 2015 state visit to the UK.”
“WeChat and Weibo no doubt top the priority lists of most brands when it comes to digital marketing in China, but these popular social media platforms aren’t exhaustive in the world of Chinese apps, especially when it comes to visual branding. Michael Kors knew this when it collaborated with In, a photo-sharing app that lets its users decorate their pictures with stickers, and other big-name luxury brands have benefited from the photo-tagging capabilities of apps like Nice. Of course, the West’s major photo-sharing social network, Instagram, has been blocked by China’s Great Firewall for about a year and a half, and while there are plenty of key Chinese influencers who are still active on the platform, Instagram’s Chinese competitors have a much larger user base for international marketers to tap.”
“According to L2’s recently released China luxury ‘Digital IQ Index,’ 92 percent of global luxury brands now have a WeChat account, marking a dramatic surge since 2014, when only around half of all brands had joined the platform. The massively popular mobile messaging app is now on par with Weibo, which features accounts for 94 percent of luxury brands.”
“China-based luxury consultancy Fortune Character reported this week that Chinese consumers spent 1.2 trillion yuan ($183 billion) abroad last year, a number up from $165 billion in 2014, according to the World Tourism Organization (WTO). Luxury played a big role in their shopping habits, with $116.8 billion of that spending going to luxury goods.”
“Dior offered a special pink edition of its Lady Dior Small handbag for 28,000 RMB ($4,210), which buyers were able to customize with an interactive app before ordering and paying through WeChat. With an original sale period between August 1 and 4, media reported that all 200 models of the bag made available on WeChat and sold out by August 2. To promote the bag, Dior enlisted Chinese superstars including Chen Yifei, Angelababy, and Li Bingbing to pose for photos with it in the campaign.”
“While a record number of Chinese models strutted down the runway of this year’s annual Victoria’s Secret Fashion Show, the brand’s additional attempts to woo Chinese consumers through dragon-themed outfits were called ‘racist’ in a since-deleted English-language article on Cosmopolitan. According to a look at comments on Chinese social media, the show’s Chinese elements also fell flat on China’s internet.”
“Bizzarri proved Chinese chatter about the logo’s tipping point is out of step, for Gucci at least. ‘The Chinese are buying back into Gucci after many months of decline. No one is ashamed to show a GG belt.’ That issue, it seems, is confined to Prada and Louis Vuitton.”