China to the Rescue

LONDON - In a year plagued by COVID-19, China, as the world's largest luxury market, has shown great resilience and has shown promising results for brands that have properly implemented their China strategy.
From continuous price hikes, record-breaking numbers, global collection debuts to dazzling physical events, digital tours and live sales sales, luxury brands have made headlines in the country daily throughout 2020. This offered not only hope for the ailing industry, but also a reality check for those who do not tackle the market.
Back in January, the first sign of the severity of the virus for the fashion industry was the absence of Chinese designers, editors, buyers, celebrities and influencers during the Fall 2020 Fashion Weeks as the US and UK imposed travel restrictions. Italy and France to prevent the spread of the coronavirus.
While travel bans didn't do much to stop the virus from spreading around the world, the health crisis in China was contained in early April, and the country showed signs that it would be the only source of growth for many as the world stepped into different tiers of the world Lock on.
LVMH's fashion and leather goods division saw more than 65 percent growth in China in the second quarter, while Kering said sales in mainland China increased more than 40 percent over the same period. China has also strengthened the performance of Compagnie Financière Richemont. Sales in the region increased 78 percent in the first half of the year ended September 30.
According to Bain, the luxury goods market in mainland China is expected to grow 48 percent in 2020, reaching nearly 346 billion renminbi, or $ 52.8 billion, doubling the country's total share of the global luxury market this year.
Live streaming mode
Retailers large and small have used China's widely available technology tools to keep in touch with their customers.
Alibaba-owned Intime Retail, one of the largest high-end retailers in the country with tenants from Cartier to Lane Crawford, saw its online business campaigns and sales initiatives quadruple in May thanks to live streaming, free shipping and a number of retailers.
Around 5,000 sales reps from the Intime business have registered as livestreams to hold around 200 sessions on Taobao Live every day during the height of the outbreak to attract and attract new users.
Intime introduced free shipping for all in-app purchases and worked with Cainiao, Alibaba's logistics network, to cover shipments within a 10 kilometer radius of any location and to further promote online spending.
In view of order cancellations, local designers also switched to the direct-to-consumer model. Some see the pandemic as a good opportunity for the industry to resolve the problem and help companies move forward.
For example, Shanghai Fashion Week teamed up with Tmall to bring their fall 2020 edition online. Around 150 brands presented their autumn 2020 collections and sold items from the current season via live streaming to the 800 million active Tmall users.
Dior is arguably one of the most aggressive and experimental luxury brands in China when it comes to digital communication.
More than 12 million people watched the Fall 2020 collection live streaming in February, and viewers rose to 107.7 million when the Fall 2021 collection was designed by Dior Men in collaboration with Kenny Scharf in December. Inspired by its success in China, Dior streamed the latest show on 11 additional platforms worldwide, increased total views to 140 million and set a new record for the brand.
Before Louis Vuitton moved its men's fashion show to Shanghai in August, he experimented with live streaming with the popular social commerce platform Xiaohongshu in order to advertise his summer collection as early as April.
The brand has also won the country's most talked-about live streamer Austin Li and actress Song Jia for this year's May 20th Chinese Valentine's Day promotion. With 40 million fans on Douyin, the Chinese version of TikTok, and 25 million and 15 million followers on Taobao and Weibo, Li's support is an extremely strategic step even for top brands like Vuitton.
For the September 2021 spring season, Prada, Fendi, Valentino, Hugo Boss, Dior and Miu Miu have taken the livesteaming game to a new level by inviting hundreds of guests to watch the show live in China. You have been rewarded with tremendous notoriety on social media.
Prada, for example, received 180 guests - including brand ambassadors, influencers, top-class editors, and artists - for its reception at Rong Zhai, followed by dinner and cocktails. When Raf Simons and Miuccia Prada's first co-design collection for the brand was live streamed on the official Weibo and Douyin accounts, a record 48 million participating users explored the show and viewing event. The Weibo hashtag # PradaSS21 received 170 million views in one day and is now 420 million views.
A record year
In real life, once the malls reopened their doors in early March, queues began to form outside of top brands like Chanel and Hermès in Beijing and Shanghai.
In Guangzhou, Hermès locked in $ 2.7 million on the day its 5,500-square-foot Taikoo Hui flagship store reopened in April. Rare bags, including a diamond-studded Himalayan birkin, were delivered to the site. VIPs from all over Guangdong Province, the richest area in China with the capital Guangzhou, came to the store to buy dishes, shoes, furniture and leather goods.
Louis Vuitton also saw record-breaking monthly sales from its flagship on Plaza 66 in Shanghai, the largest in China. $ 22 million was made in August. It is believed to be the highest monthly sales in China's history. The record-high sales balance was partly increased by the men's spring exhibition in spring 2021 in Shanghai.
With Chinese customers continuing to show a huge appetite for luxury bags, the brands raised prices several times over the course of 2020 in hopes of compensating for losses from easing. Chanel, for example, has increased the prices of handbags by a quarter, while Vuitton, Dior and Bottega have also adjusted their prices. Chanel said the coronavirus shutdowns were "absolutely unrelated to that decision."
Tmall's Luxury Soho outlet platform, quietly launched in April, has helped brands accelerate their digital transformation and unlock a new source of income.
Coach was one of the first brands to join this channel and the discount is up to 70 percent. This move paved the way for the brand to become one of three brands alongside Cartier and Michael Kors to hit 100 million renminbi or $ 15.2 million in sales at this year's Singles' Day shopping festival on Tmall. It also became the best-selling brand in the bags and accessories category.
Compete with an integrated approach
McKinsey predicts that Chinese consumers will account for 40 percent of global luxury spending by 2025, but growing demand is likely to be trapped in the country by 2021 due to pandemic disruptions.
Imke Wouters, partner at management consultancy Oliver Wyman, also believes that “when it comes to luxury spending, strong consumer sentiment will continue into the second half of the year. Luxury goods sales in China are expected to end through 2019. "
It is fascinating to hear stories about how well some brands are doing in China amid the pandemic. However, for newcomers looking to expand in the market, the reality is far from rosy.
Those who are now benefiting from China's rapid recovery have been in the market since the early 1990s and have built a sizable local business using innovative, China-centered strategies.
Aaron Lau, CEO and chairman of the marketing and digital agency Gusto Collective, previously told WWD: “Foreign brands need to bring their best expertise and resources to the table in what is probably the busiest and most competitive market in the world, the multinational , Asian and Local Chinese Brands Growing Together This adds that those who do not have online-to-offline infrastructure need to accelerate their development.
“An integrated approach is absolutely critical in China,” added Lau. “Chinese consumers are among the most digitally networked in the world. They are knowledgeable and well-researched when it comes to brands and products, and while they are constantly connected, offline retailing is vital for brands that provide a tactile, sensory experience to their Chinese customers. The bar continues to rise when it comes to offline experiences in China. Technology and digital must also play a key role in offline activation of retail. "
Looking at the first-tier cities where COVID-19 disruptions are reshaping economic performance in China, a handful of cities are doing better than the others, attracting mega-high-end retail projects as 2020 rebounds sharply. Heuritech, a fashion tech start-up, predicts brands need to be agile enough to expand their shopping locations to China. Men and Gen Z, especially from lower-class cities, are rapidly emerging consumers with a greater appetite for products that offer originality and national pride.
Therefore, new luxury hotspots like Chongqing, Chengdu, Wuhan, Kunming, Sanya and Changsha are worth the attention of brands looking to expand their retail presence in the coming year.
Sign up for the WWD newsletter. For the latest news, follow us on Twitter, Facebook and Instagram.
Mention your own website in this post for Advertisement

Last News

Biden to pull U.S. Afghanistan troops by 9/11

Only one county left in purple tier as California's COVID-19 reopenings continue

Steph Curry breaks Wilt Chamberlain’s record to become the Golden State Warriors’ all-time

Here's Where Prince Harry Is Staying While in the U.K. for Prince Philip's Funeral

Katy Perry and Miranda Kerr Talk 'Unconditional Love' of Motherhood and Their 'Close' Relationship

Sen. Tim Kaine reacts to Rep. Tlaib's 'No more policing' tweet