LUXURY SOCIETY BRIEFING IN PARIS 2019
The growing interconnectivity between Chinese consumers and digital ecosystems has led to major shifts on e-commerce marketplaces and social media. The second edition of Luxury Society’s Briefing series in Paris saw experts giving insights on these shifts, and offering tips on creating impactful sales and marketing strategies in the world’s largest market for luxury. Here are the five key takeaways on successful e-commerce strategies in China.
The Impact Of Content Goes Beyond Marketing
“Brands should invest more on content marketing, while ensuring that it has a concrete sales impact.” This was the message that Pablo Mauron, Partner and Managing Director China of DLG (Digital Luxury Group) put across in his presentation about Omni-Content Marketing.
Pablo Mauron, Partner & Managing Director China at DLG (Digital Luxury Group)
Unlike in Western societies where e-commerce platforms tend to directly feed customer acquisition and sales, Chinese e-commerce platforms serve a spectrum of purposes – from raising awareness, to engaging, and acquiring customers. This makes it even more important for brands to optimise the content circulated on such platforms, and ensure that it not only helps to generate awareness and build brand equity, but ultimately drive conversions.
As a result, content required in China tends to be starkly different from the communication directives set at a global level. Brands need to accept that, and empower their local teams to make decisions without necessarily relying on feedback from the top. Only by doing so can brands keep pace with the fast-moving trends and stay on top of their e-commerce game in China.
Technology Can Enhance Operations And Brand Building
Understanding consumers is paramount for brands to reach their sales and marketing goals, and to do so they need to engage them across different digital touchpoints. Setting up an e-commerce presence on marketplaces like Tmall – which is visited on an average of 20 times per week by Gen Z consumers – presents a huge opportunity for companies in driving sales and strengthen their brand equity.
But this alone, is not enough. High performance on Tmall does not come without innovative consumer engagement. By binding creativity with consistency, brands can create digital engagement-focused content (including livestreaming, retail-tainment, 3D mappings, AR filters, interactive personalisation) that will favour both sales and branding.
Nicolas Cano, International Senior Business Development Manager at Tmall Luxury, Alibaba Group
According to Nicolas Cano, International Senior Business Development Manager at Tmall Luxury, Alibaba Group, “Innovation should meet heritage.” Tmall needs to be approached as a brand building platform, where technology and 360 touchpoints can be leveraged to deliver consistent messages and maximise returns of investment. To do so, brands must make their customers their main asset, use data to digitalise their journey, increase precision targeting and provide them with experiential content and messaging.
Discounting is Not a Must on E-commerce
For a long time, luxury brands were focusing their efforts on marketing activations rather than e-commerce. They also lagged in entering e-commerce marketplaces out of fear that their models were incompatible with the promotional activities of the platforms. However, marketplaces like Tmall actually present unique opportunities for attracting new customers.
The common misconception about e-commerce platforms is that there is an obligation to participate in sales. “Discounts are what you give your customers when you don’t have anything else to give”, said Baozun’s Executive Vice President of Digital Transformation and New Ventures, Jacques Roizen. He explained that brands achieve success on e-commerce platform by taking actions that generate traffic without engaging in sales.
During the recent 11.11 shopping festival, luxury brands like Burberry and Valentino were among the top-selling brands, even though they did not participate in discounting. Instead, they took the chance to create unique activations for customers.
E-commerce Strategies Need To Consider The ROPO Model
Because of the differences between the digital landscapes of China and the West, brands struggle to adapt their operations to global audiences and maintain a strong brand message. The complexity of Chinese platforms, combined with the rise of content-to-commerce models, accentuates the disconnect between global and local teams.
As China shifts away from being a secondary market and demands more exclusive products and tailored content, luxury brands need to give more flexibility to their Chinese teams to catch up to the speed of this market. During the panel discussion at the conference, experts revealed that the main trend that is disrupting e-commerce in China is the ROPO (Research Online Purchase Offline) model, and that brands need to adapt operational and marketing capabilities according to this omnichannel consumption model.
Left: Jacques Roizen, Executive Vice President of Digital Transformation and New Ventures at Baozun,
Right: Antonio Carriero, Chief Digital and Technology Officer at Breitling
Of course, an omnichannel experience is not something brands can build up overnight, and it is recommended that they consider their options in steps: From first establishing a social media presence, to opening a Tmall store for cutomer acquisition, then rolling out CRM initiatives on WeChat, before finally thinking about making use of WeChat as a sales channel. “While Tmall is a great place for customer acquisition, the WeChat ecosystem closes the loop between online and offline,” said Antonio Carriero, Breitling’s Chief Digital and Technology Officer.
Tmall Should Be Considered As An Event and Marketing Platform
Tmall is more than just a marketplace. It is an asset that brands need to grow in the Chinese market and to understand their customers. “Tmall is part of the Alibaba ecosystem, and consumer insights are becoming an increasingly important asset to build a strategy in China,” said Nicolas Cano.
Attracting customers to a brand store remains a challenge, so it is paramount that brands play their cards right in order to raise awareness. With Tmall’s high customer traffic in mind, brands should consider leveraging the platform’s extensive range of events to capture traffic and attention – in October 2019 alone, 15 events took place on Tmall.
Instead of trying to participate in Tmall events when the festival is aligned with their global communications plan, brands should think about shaping their China marketing and communications strategy around Tmall events. This would allow them to fully maximise the platform’s calendar of events and reach an even broader audience
As China’s e-commerce landscape continues to grow at breakneck speed, international brands need to keep pace by staying on top of trends and user behaviours in the world’s largest market for luxury goods. “As a brand, you cannot dictate how you want to operate, you have to play by their rules,” said Carriero. “The better you are at this game, the more successful you will be.”