2021 WECHAT LUXURY INDEX: FROM SOCIAL TO COMMERCE
As the communities of luxury brands on WeChat continue to grow, brand interaction on the platform is evolving.
DLG’s latest report in collaboration with JINGDIGITAL takes a closer look at which key performance indicators matter and how brands performed on the platform last year.
With the outlook over the global luxury market shrouded in uncertainty, many luxury brands chose to look East in 2020. As the only luxury market in the world functioning at a semi-normal capacity, international brands naturally began to step up their investments in China. This, coupled with the ongoing growth and evolution of the Chinese digital landscape, created a robust environment for brands’ online activities in the market to thrive.
Social platforms are rapidly evolving and developing more functions that span even more touchpoints along the consumer journey, causing the digital ecosystem in China to become increasingly fragmented. While WeChat remains the most ubiquitous digital platform, user behaviours on the platform are starting to change and brands are finding it increasingly challenging to engage their communities.
The latest 2021 WeChat Luxury Index report by DLG (Digital Luxury Group) and JINGdigital delves into these issues based on an in-depth study of the WeChat Official Accounts of 33 luxury brands from January to December 2020.
Communities Are Still Growing
The overall growth rate of luxury brands communities on WeChat rose by 44 per cent in 2020, up from 37 per cent in 2019. This rise can be attributed to the influx of brand ramping up investments in the Chinese market, as well as on local digital platforms. While an increase in media investment has been noted, growth was largely organically – as seen in 2019 – highlighting the continued importance of such channels, and indicating that brands should pay more attention to developing their communities instead of relying too heavily on paid advertising.
WeChat As An Information Centre
WeChat may be a top instant messaging tool with over 1.225 billion monthly active users, but the bulk of user interactions on brand Official Accounts – over 73 per cent – are centred on menu clicks. This is something that has remained fairly consistent over the years, suggesting that users tend to only interact with brands when they have a query or are searching for specific types of information. In contrast, post interactions only make up about 10 per cent of all user actions.
So, while engagement rates within articles have decreased slightly from 10.89 per cent in 2019 to 9.56 per cent this year, this is not something that brands should be overly concerned with as the bulk of user interactions with the brands do not take place on this front.
“Brands need to be less caught up with ‘traditional’ social media engagement metrics and evaluating their success on WeChat based on the comments, shares or WOWs they get in articles,” said Pablo Mauron, Partner & Managing Director China at DLG (Digital Luxury Group). “Content is essential, but it is a smaller part of how consumers are interacting with brands on the platform.”
“Brands should also work on developing their service offering, such as social CRM programmes – where there is clearly still a lot of room for growth – customer service chat options and e-commerce,” he added.
Leveraging Social Commerce
Likewise, the commerce opportunity on WeChat is becoming even more significant given the broadening of traffic options to its Mini Programs. Weibo and RED now allow traffic redirection from their platforms to WeChat Mini Programs. Another new function that brands can leverage is sending SMS messages containing Mini Program links to redirect customers to WeChat.
“By embedding Mini Program links in SMS messages, brands can further enrich their consumer marketing efforts and drive an additional layer of traffic to their WeChat Official Accounts,” says Kai Hong, Chief Executive Officer at JINGdigital.
“Through this, they will also be able to better nurture and activate prospects, directing them seamlessly to purchase as well.”
So how can brands navigate the increasingly fragmented digital ecosystem in China? The latest WeChat Luxury Index report from DLG and JINGdigital examines the performance of luxury brands on WeChat, user behaviours and how brands can best engage their communities.
For more data and insights on follower acquisition, engagement and content, as well as case studies and frameworks on new business opportunities on WeChat, watch a replay of the WeChat Luxury Index 2021 live stream session.
The full report is also available for download at the link below.
Download the free report