Luxury brands should focus on their Very Important Clients – Ashley Dudarenok

 

Ashley Dudarenok

Marketing expert Ashley Dudarenok picks five 2023 trends for luxury brands in China, from its ChoZan’s 2023 Mega Report. The first one: focus on your VIC’s, Very Important Clients. this and four more trends from the Jing Daily. Among them: expand the duty-free ecosystem, and adopt global pricing strategies.

Ashley Dudarenok:

Globally, the top 2 percent of luxury customers make up about 40 percent of luxury sales, according to Bain’s luxury goods market study. In China, the concentration of very important clients (VICs) has been on the rise and has further expanded in 2022. The economic slowdown has affected entry-level luxury consumers more than high-net-worth individuals, and the decline in mall traffic has led to fewer new customers entering luxury stores.

Consequently, sales have tilted towards VICs in 2022, with some Chinese luxury brands achieving higher concentrations of VIC sales than the global average. VICs have also played a significant role in online luxury sales, with shoppers who buy more than three times a year accounting for over 50 percent of sales and being the fastest-growing segment, according to Tmall Luxury Pavilion.

These high-net-worth individuals (HNWI) are ready to travel as the pandemic restrictions are lifted. They can be categorized into two profiles: those that shop domestic and those that shop overseas (Peihuo phenomenon). The overseas VICs travel to other countries to purchase luxury goods at the “regular” price and not the “China” price, whereas domestic VICs prefer the local experience of shopping in boutiques regardless of the item’s price.

Brands can get ahead of the overseas VICs by offering additional incentives to their products. As for domestic VICs, brands need to invest in travel retail opportunities, especially in areas like Hainan.

More at the Jing Daily.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out this list.

Luxury brands have a chance with gen-Z – Arnold Ma

 

Arnold Ma

Consumption patterns of Gen-Z and millennials vary greatly from older generations in China, says branding expert Arnold Ma in the Jing Daily. “They are more focused on themselves and less so on the collective. There are lots of opportunities [for luxury brands] here,” says Arnold Ma.

Jing Daily:

This trend reinforces how local Gen Zers and Millennials are very different from their previous generations. Social media has contributed massively to the spread of these niche trends, and people now express their unique personalities online through their one-of-a-kind creations. Arnold Ma, the founder of the marketing agency Qumin, said, “They are more focused on themselves and less so on the collective. There are lots of opportunities [for luxury brands] here.”

He continued, stating that brands could leverage “the trend of self-expression and the Creator Economy by asking consumers to create their own interpretation of a brand logo or asset.”

More in the Jing Daily.

Arnold Ma is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Young consumers dominate China’s luxury markets – Ashley Dudarenok

 

Ashley Dudarenok

China’s luxury market is changing fast as young consumers born between 1990 and 2000 now dominate with 50% of the sales, and that percentage is bound to rise fast. Consumer marketeer Ashley Dudarenok gives four major tips to keep hold of this market in the Jing Daily.

Ashley Dudarenok:

Chinese consumer desire for luxury goods is expected to continue to grow in 2022 at an estimated rate of 13 percent, making them the highest spending global consumers. By 2025, Generation Y and Z will account for more than two-thirds of the market. Gen Z, China’s youngest spending generation, are digital natives that have grown up with material abundance. And they are willing to pay a premium for fresh and niche experiences.

As such, luxury brands will continue to leverage digital opportunities over the coming years to provide consumers with unparalleled shopping experiences, using innovative technology like NFTs and AR-powered digitalization. Yet, offline purchasing remains the most important sales channel, making up over 50 percent of all consumption.

Online channels provide consumers with multidimensional avenues for communicating and resonating with luxury brands. Meanwhile, offline channels give consumers physical product and service experiences that online services cannot replace. But integrated online and offline channels create an unmatched level of user stickiness, helping brands build loyalty among future consumers.

Read her four tips for online and offline marketing at the Jing Daily.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your (online) meeting or conference? Do get in touch or fill in our speakers’ request list.

Are you looking for more experts on China’s luxury market at the China Speakers Bureau? Do check out this list.

How luxury brands failed to follow China’s consumers back home – Ben Cavender

 

Ben Cavender

In the past, China’s consumers focused often on foreign luxury brands, but those days are over. Unfortunately, most brands failed to follow that cue from their buyers in China, although the situation is improving, says Shanghai-based branding expert Ben Cavender in Jing Daily.

Jing Daily:

Back when Hermès announced it was launching a Chinese luxury brand in 2010, many scoffed. How could China produce a contemporary luxury brand? Fast forward to today and that possibility is becoming a reality. But, as COVID-19 continues to keep borders shut, why aren’t more Western companies eyeing local Chinese market leaders for a strategic route in, and where are the big success stories?

Aside from the notoriously slow burn of luxury investments requiring especially long pockets, past examples have often not been sufficiently localized. Qeelin, Shang Xia, or even Shanghai Tang, are brands that could have done quite well according to Shanghai-based Ben Cavender, managing director of China Market Research Group, but were not positioned and supported in a way that truly allowed them to be successful.“The challenge with these examples is you have a domestic brand that’s taken foreign investment but has then been given a foreign lens to look at the market… So the products appeal to a luxury consumer sitting in the West,” he explained.

Naturally, if you are a Chinese brand selling to Chinese consumers there needs to be a reorientation on what your story and products should be, which Cavender thinks is often mismatched. Over the last number of years, this “mismatch” has been better served through partnerships with young Chinese designer brands as a way to test the water: Chenpeng, 8on8, and Feng Chen Wang have all collaborated with Western names.

More in the Jing Daily.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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How luxury brands can survive in China in 2021 – Ashley Dudarenok

 

Ashley Dudarenok

China marketing expert Ashley Dudarenok looks at how luxury brands can survive in China in 2021 at her vlog. “We are building the future in China,” she says about her work as a bridge between Chinese consumers and brands with global aspirations.

Ashley Duarenok is a speaker at the China Speakers Bureau. Do you need her at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out this list.

How Cartier won China on social media – Arnold Ma

 

Arnold Ma

Luxury brand Cartier has been able to win over also the younger generations consumers in China by smart use of the country’s social media. Marketing expert Arnold Ma explains in the Jing Daily how Cartier paved its way to success.

Arnold Ma:

Cartier is an old hand in the Chinese market, having launched there in 1992. However, it has only recently embraced social media — and, more importantly, third-generation social media — in the country. This strategy can be seen in its Make Your Own Path campaign, which was released late last year to promote the brand’s new PASHA DE Cartier watches.

While luxury brands almost always try to give off an heir of exclusivity, Cartier invited everyone on Douyin to participate in its user-generated content campaign. The premise was simple: show off your dance moves in a video, apply Cartier’s special filter to it, and post it under the campaign hashtag. This simple-yet-effective campaign brought in 1.1 billion views and inspired thousands of users to boogie! Cartier even upped the ante by launching a livestreamed clubbing event by partnering with a hip-hop dance crew and the famous trap artist DJ Anti-General at a Shanghai club.

The fun, refreshing campaign smartly tapped into China’s creative consumers, club-going youth, livestream lovers, and social media content creators. Cartier also invited celebrities to participate in the campaign. As a result, the platform’s algorithm boosted the campaign widely on user feeds and generated considerable organic support.

Luxury brands: come down from your pedestal

As demonstrated by Cartier, luxury brands have to be more experimental in China to resonate with younger audiences. Brands that are creative and innovative on third-generation platforms will be rewarded by Chinese consumers via both engagement and sales. As such, now is the right time for luxury brands to be more democratic and embrace China’s newest era of social media.

Arnold Ma is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out this list.

Luxury brands focus on China’s gamers – Arnold Ma

Arnold Ma

Gamers are increasingly becoming a group of luxury buyers in China, overlapping other segments, says marketing expert Arnold Ma at OZY. "Chinese luxury buyer demographics overlap with hobbies normally associated with a younger audience, such as gaming," Arnold Ma says.

OZY:

McKinsey&Company reports that the luxury market is driven by the post-1980s generation with an average annual spend of $5,900 (RMB 41,000) and consumers born after the 1990s, who spend, on average, $3,600 (RMB 25,000) a year. A separate report by the Boston Consulting Group suggests that 78 percent of China’s luxury consumers are under 35.
In keeping with global trends, women account for a majority — 71 percent — of China’s luxury spending. But they also form 58 percent of the country’s 484 million-strong gaming population. In addition, two-thirds are between 19 and 35 and are generally middle and upper-middle class.
“Chinese luxury buyer demographics overlap with hobbies normally associated with a younger audience, such as gaming,” says Arnold Ma, CEO of digital creative agency Qumin. “A combined social content and gaming strategy for brand campaigns will not only have the most reach, but more importantly provide a far more authentic message to Chinese luxury buyers.”

More at OZY.

Arnold Ma is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out this list.

Luxury brands got it wrong on Douyin - Ashley Dudarenok

Ashley Dudarenok

Luxury brands jumped on Douyin, a hip short video app that is popular among China’s young social media users, that has even been called the WeChat for luxury goods. Wrong, very wrong, says marketing veteran Ashley Dudarenok to the Jing Daily.

Jing Daily:

To Ashley Galina Dudarenok, author of the Amazon bestseller “Digital China: Working with Bloggers, Influencers and KOLs,” it was a typical example illustrating how luxury brands over-cater to fashion and digital trends in China.... 

Another concern is whether their targeted audience has the purchasing power to buy luxury goods. “As it turns out, most of the Douyin users cannot afford luxury goods,” said Dudarenok,...“Given the premium and exclusive nature of luxury goods, the sales-conversation rate generating from marketing on Douyin will be relatively low. In other words, there will be more people viewing the content but [far fewer] people purchasing products.”

More at the Jing Daily.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more luxury brands experts at the China Speakers Bureau? Do check out this list.  

High-end Chinese travelers make new choices - Rupert Hoogewerf

Rupert Hoogewerf

Where do they go to, where do they stay. The travel industry is eagerly looking at the luxury traveler from China. The latest Hurun Chinese Luxury Traveller report shows some answers: they increasingly go for luxury homes instead of hotels, says Hurun chairman Rupert Hoogewerf to the South China Morning Post.

The South China Morning Post:

The study reached out to individuals who spend more than 350,000 yuan (a whopping US$50,250) annually on travel. 

When it comes to accommodation, traditional hotels are no longer the go-to choice, with nearly a quarter now turning to Airbnb-style holiday homes. 

“The performance of the high-end short-stay holiday home market has been weak. However, as travelling as a family grows in popularity, the market is likely to see significant development in the future,” said Rupert Hoogewerf, the Hurun Report chairman and chief researcher. 

Nearly half of the high-end travellers polled already have their own holiday homes, in Thailand (11 per cent) and Australia (10pc), followed by Switzerland and Japan (both 5pc). 

Domestically the southern resort of Sanya, dubbed the Hawaii of Asia, remains their first choice, accounting for 12 per cent, with sea views maybe unsurprisingly topping the requirement list of holiday homes. 

Polar exploration, the most popular travel theme last year, fell by 8.5 per cent and ranked second while parent-child travel enters the top three with 19 per cent. The interest in visiting islands and beaches, on the other hand, has reached it peak, with the selection rate dipping to 13 per cent this year.

More in the South China Morning Post.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on luxury consumers at the China Speakers Bureau? Do check out this list.  

China luxury consumers: it's complicated - Ashley Dudarenok

Ashley Dudarenok

The Euromonitor divided up China's luxury consumers into five categories, to make life easier for marketers selling to them. Marketing veteran Ashley Dudarenok, author of Unlocking the World's Largest E-market: A Guide To Selling on Chinese Social Media, applauds the effort, but thinks the market in China is more complicated than that, she tells in the Jing Daily.

The Jing Daily:

 “I think this is a really interesting way to look at Chinese consumers,” said founder at Chinese Marketing Agency ChoZan, Ashley Galina Dudarenok. “It definitely adds a bit more sexiness and a bit more color into the consumer profile. As soon as you hear the personality type, you instantly have a certain image in mind of what these people want, where they are, how they live, and so on.”... 

“China is a very complicated, very saturated, very non-homogeneous market,” said Dudarenok. “For example, Balanced Optimists (one of the categories) in Beijing or Fuzhou are completely different target groups. …This might work for some generalizations, but for many brands, it will remain challenging.”

The whole debate in the Jing Daily.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Luxury is back on track - Rupert Hoogewerf

Rupert Hoogewerf

Austerity marked the luxury goods industry, triggered off by the anti-corruption drive by president Xi Jinping. But the growth figures are back on track, says Rupert Hoogewerf, based on research by his Hurun China Rich report, released on Thursday, he tells the China Daily. Purchases are back on the 2013 level.

The China Daily:

"There is always an inherent demand. For the past three years, (wealthy) people may not have been quite sure, because they didn't want to be too ostentatious," said Rupert Hoogewerf, founder and chairman of Hurun Report. 

"But now as the picture has cleared, their interest (in luxury) has risen back to the surface," he added. 

Apple, Cartier and Louis Vuitton remain the top three favorite brands among the wealthy, while Samsung for the first time drops out of the favored list. And Alipay, the digital payment tool developed by Alibaba Group Holding Ltd, has for the first time outgrown credit cards to be the most preferred way to go shopping, while cash is the least favored. 

Hoogewerf said he foresees China's luxury industry will reach new peaks over the next five years. 

More than 90 percent of the interviewees adopted a positive attitude toward China's economy over the next two years, saying they were confident or extremely confident about prospects.

More in the China Daily.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out this list.

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Luxury bag sets record price – Wei Gu

Wei Gu

Some luxury brands have been slashing prices to keep their Chinese customers. But as a  fuchsia Hermès Birkin bad with diamonds sets a record price in Hong Kong, WSJ wealth editor Wei Gu wonders in Marketwatch whether luxury goods are really in the doldrums.

Wei Gu:

At Christie’s afternoon handbags and accessories sale in Hong Kong on Monday, the bag fetched 1.72 million Hong Kong dollars (US$221,846) and was sold to a phone bidder. The previous record was a diamond-adorned rouge crocodile Hermès Birkin bag that went for US$203,150 at a Heritage Auctions sale in New York in 2011. (A diamond and gold evening bag once owned by Elizabeth Taylor sold for US$218,500 at Christies in New York in December 2011, although that item was in the jewelry category.) 

The identity of the buyer of Monday’s record sale wasn’t known. 

The record came at a time when storied luxury names such as Chanel and Gucci have been slashing prices in Hong Kong and China to attract buyers.

More at Marketplace.

Wei Gu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you looking for more experts on luxury goods at the China Speakers Bureau? Do check out this list.  

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Online presence key for luxury products - Rupert Hoogewerf

Rupert Hoogewerf

China´s counts 2.9 million buyers of luxury products, and most of them make already their purchasing decision before they leave home, says China Rich-List founder Rupert Hoogewerf, according to WARC. Online presence is key for luxury products.

WARC:

However, while that may be widely understood by the industry, the key issue is how to recognise what influences them and to understand Chinese marketing tactics. Hoogewerf said Chinese affluents are knowledgeable and take time to explore price comparison sites, but most importantly, a lot of their research and decision-making is made in China before they travel abroad to spend. 

"If you just wait by your store for people to walk in, it will probably happen, but you will be missing a big opportunity. So what everyone should be doing is looking to influence the Chinese back in China," he said. 

But some brands are missing an opportunity, he continued, because they have held back from going right into China because it requires energy and resources to reach those consumers. 

Those same luxury buyers are now travelling abroad in huge numbers – the total number of travellers outside of China is currently about 45m, he said, which rises to about 110m including Hong Kong and Taiwan. 

"There is an impact to be had for sure," he added. "[But] you need to know how to analyse the market so you are not wasting your dollars."

More in Warc.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

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Feeling good, the new trend among rich - Rupert Hoogewerf/Wei Gu

Wei Gu and Rupert Hoogewerf

The habits of China´s rich change fast, as they look for a a healthier lifestyle, both physical and mental. WSJ wealth editor Wei Gu discusses with Rupert Hoogewerf, founder of the Hurun rich list, the changing trends among China´s wealthy.

Both Wei Gu and Rupert Hoogewerf are speakers at the China Speakers Bureau. Do you need one of them at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more experts on the luxury goods industry at the China Speakers Bureau? Do check out this list. 

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IPhone 6 key gift for Chinese New Year - Shaun Rein

+Shaun Rein 

A reasonable price and still a premium, those are the assets of the iPhone 6 as a key gift for Chinese New Year business analyst Shaun Rein notes at CNBC. "The anti-corruption drive is more serious than most analysts realize," said Rein.

CNBC:

Chinese corporates and wealthy consumers are taking gift-giving down a notch this Lunar New Year, opting for iPhones instead of Birkin bags or Louis Vuitton wallets. 

The annual holiday, which falls on February 19-20 this year, is a time of gift exchange between family, colleagues and business contacts. 

"The iPhone 6 has replaced luxury items as a key gift this Chinese New Year," Shaun Rein, founder and managing director of the China Market Research Group told CNBC. 

"Corporates, for example, used to buy luxury products to give their high performing employees, now they are giving iPhones because they more reasonably priced and still considered premium enough," he said. 

Choosing to gift iPhones over a designer handbag fits in the vein of the government's corruption crackdown, Rein noted. 

"When you gift a Berkin bag—it's too high profile everyone knows its super expensive and in this anti-graft campaign brings about questions of ill-gotten gains and corruption," he said... 

China's luxury sector has been reeling from Beijing's crackdown on conspicuous spending, the economic slowdown and changing consumer preferences. 

"The anti-corruption drive is more serious than most analysts realize," said Rein. 

It impacts the luxury sector on three fronts: Government officials can no longer get away with using public funds to buy luxury items; businessman are buying fewer luxury gifts for government officials; and corporations are opting for less flashy products to reward their employees.

More at CNBC.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

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Apple takes top spot as luxury gift - Rupert Hoogewerf

Rupert Hoogewerf

US tech giant Apple has taken over the number one position as most popular gift from designer good maker Hermes, according the the newest Hurun luxury report. Travel is the main driving force, says Hurun founder Rupert Hoogewerf as Chinese buy 7 out of 10 luxury products overseas, according to Reuters.

Reuters:

Apple Inc has taken the number one luxury gifting spot in China from designer goods maker Hermes International SCA, according to a Hurun luxury report on Thursday, reflecting the iPhone maker's recent hot streak in the country. The U.S. tech firm's focus on glitzy stores and high prices helped it post a 70 percent rise in sales in China in the last three months of 2014 and powered the company to the largest profit in corporate history. 

Spending on gift-giving overall dropped 5 percent in 2014, after a 25 percent drop the year before, according to the Hurun Chinese Luxury Consumer Survey. Beijing has been cracking down on corruption and luxury spending among public officials, weighing down sales of premium liquor to handbags. 

Domestic luxury spending in China dipped for the first time last year, according to consultancy Bain & Co, with increasing numbers of shoppers looking to spend money overseas. 

"Travel retail continues to change the dynamics of luxury in China, with 7 out of 10 luxury goods bought by Chinese now being bought overseas," said Hurun Report Chairman Rupert Hoogewerf.

More at Reuters.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you interested in more experts on luxury goods at the China Speakers Bureau? Do check out this list.  

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