Luxury has always been associated with opulence and classical styles in the West. But that is beginning to change – China’s rapid economic development has meant that, for many luxury consumers, high-end fashion has only been an option over the past few decades. As such, they don’t have legacy expectations or long-standing brand loyalties.
Individuality over opulence
The higher proportion of younger luxury consumers in China, compared to Europe, has meant that global brands are facing a different target audience there. According to Bain, millennials and consumers under 25 will make up 65 to 70 percent of China’s luxury goods market by 2025. As a result, brands have had to adapt their marketing approaches in this new era of technology and social media. And on top of that, they must understand and leverage China’s unique digital channels: Weibo, WeChat, Douyin, Xiaohongshu, and others.
To young Chinese consumers, luxury is more about expressing their culture, selves, and statuses than displaying opulence. In a country of 1.4 billion people, young consumers are eager to stand out from their peers because China’s educational system and workplace are so competitive.
Co-branded collaborations have become a popular way to attract attention, and often, the wackier they are, the better. Partnerships that bridge different industries have also proven popular, like Karl Lagerfeld and Tsingtao Beer’s Night Cat MUSE series, with its highly-popular blind-box marketing tactic. Due to the demand for these exclusive promotions, items created specifically for certain Chinese festivals like Chinese New Year have flown off the shelves.
Experiences over one-off purchases
As luxury transforms into a form of expression, Chinese consumers want more than just the product per se — they also crave the experience. Cartier may have been launching the same Pasha de Cartier watches worldwide, but were London or Berlin-based consumers also attending promotional club nights like in Shanghai? No.
The expansion of luxury marketing has grown global brands’ audiences, and luxury consumers aren’t the only ones engaging and interacting. Prada’s 520 campaign is a prime example of this involvement, as celebrity Cai Xukun attracted many of his fans to participate in the campaign by creating customized posters, even though many couldn’t afford Prada products. The integration of offline and online has become a key part of China’s “new luxury” now that consumers want something to show for their branded experiences.
Social commerce has become the new auction house where usernames compete for the latest products at the touch of a finger, and the sector now makes up 13 percent of total e-commerce sales in China. Brands are no longer limited and can sell to customers anytime, anywhere, and in any format.
Livestreaming, a phenomenon that hasn’t taken off in the West yet, dominates China’s e-commerce sphere and is something luxury brands in China are gradually adopting. During the first digital Paris Fashion Week in July of 2020, Dior invited its famous brand ambassador Angelababy to watch the show over a livestream. With almost 300 million views on related hashtags, the stream became the third-most searched item on Weibo.
The opportunities are limitless if brands choose to embrace this new luxury. Burberry’s former partnership with Honor of Kings and Louis Vuitton’s with League of Legends show how luxury is now a component in the virtual world and not just the physical world.
China is leading the change in the luxury industry because brands don’t have to serve the “old” guard. In fact, they have been rewarded by China’s new generation of expressive and artistic luxury customers for being original, experimental, and creative, as long as they remain culturally sensitive.
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