2020 has been a tumultuous year in many ways. But one thing we can’t pretend away is the rise of China as a major player in the luxury market. Despite dealing with their own unique financial and economic challenges stemming from the pandemic, Chinese consumers have continued to purchase luxury products, propelling the industry’s growth. In this article, we explore how luxury brands are responding in the Chinese market in order to maximize their success.
1. Luxury Brands: Resilience and Relationships in China
Despite the economic downturns in China, the luxury brands have remained resilient. Consumers have gradually been returning to the Chinese luxury market, favoring long-term relationships with retailers and brands.
It is no surprise that the relationships between luxury brands and customers have deepened in such an economical context. Consumers increasingly seek more personalized experiences while making purchases, which in turn has generated deeper connections with brands. Additional factors that have contributed to the success of luxury brands in China are:
- Social media, which has been successfully used as a tool to engage customers and enhance their shopping experiences.
- Efficiency in operations, with customers relying on efficient delivery services and strategies.
- Special offers, providing customers with discounts and customized offerings.
These strategies have been instrumental in strengthening the relationships between luxury brands and their customers in China. The luxury sector is poised to continue to grow in the future, with an even greater emphasis on the customer experience.
2. Navigating Turbulence: Re-engaging with Chinese Luxury Consumers
Turbulence across the Chinese luxury goods market has left brands and investors struggling to grapple with the ever-changing landscape. Yet, with the right strategy, there are opportunities to be had. Here are several practical ways to re-engage with the Chinese luxury consumer:
- Go Digital: Make sure your brand is well represented on the most popular digital platforms with localized content.
- Be Sensitive: Be mindful of the local culture and respect their values. Demonstrate your understanding of them in your marketing strategy.
- Be Discriminating: Narrow your focus on the right customers that have ‘sticking power’ and a long-term connection with the brand.
- Invest in Personalization: Encourage customized experiences tailored to the individual customer and create a personal and memorable connection.
When Chinese consumers are also amongst the most active luxury shoppers, it’s essential to keep your brand front of mind and increase its presence in the market. Leverage the myriad of digital touchpoints to create a compelling narrative and offer transformative experiences. Becoming highly targeted and refusing to compromise on creativity or quality is the best way to engage Chinese luxury consumers and build success.
3. Chinese Luxury Market: A Thriving Opportunity in 2021
As economies and markets worldwide have been altering due to the worldwide pandemic, the Chinese luxury market has not been an exception. Despite the global economic downturn from the pandemic, the Chinese luxury market has been simultaneously flourishing and is likely to reach new heights in 2021. Here are some aspects of this thriving opportunity:
- Further Elevation: China’s expanding luxury consumers drive half of the global luxury goods markets. In 2021, consumer spending is estimated to triple from the past year, driving an increased demand for luxury goods.
- Technology Emergence: The digital realm is becoming increasingly important for the Chinese luxury market. As the consumer base is composed of younger and tech-savvy individuals, luxury brands need to be agile and active in the e-commerce space.
Furthermore, there are many reasons why luxury brands should capitalize on this opportunity. For instance, culturally conscious luxury brands now have China-specific strategies and content to ensure relevance to the market, which allows them to get closer to their target audiences. It is also a cross-border shopping opportunity for luxury brands as the sophistication of Chinese consumers has led them to shop for luxury items from all around the world. The key is for luxury brands to have an effective combination of online and offline channels to reach this vast and diverse market.
4. Establishing Brand Loyalty in an Evolving Marketplace
Gaining Customer Loyalty
In today’s competitive and ever changing marketplace, it is essential for businesses to establish customer loyalty. Keeping customers loyal to your brand can add value to your company’s bottom line, increasing customer life time value and strengthening your connection to the customers.
To make existing customers your ambassadors, a few investment strategies will improve circulation of current consumers:
- Offer attractive loyalty rewards and incentives.
- Create a user-friendly and easy-to-navigate customer service process.
- Focus on customer experience (customer service, products, website experience).
- Provide a consistent flow of content to build relationships with customers.
- Enable customers to communicate with your company with ease.
Recognizing customers’ value, efforts to retain them, and creating a memorable customer experience are invaluable in gaining customer loyalty. This deepens the relationship between your customers and your company and builds a lasting bond. Gaining and maintaining customer faith and trust within your brand will bring in repeat customers who can help spread the word about your business and services.
As China’s economy continues to flourish, luxury retailers’ presence in the country is expected to remain strong. With a strong appetite for luxury goods, China is proving to be a highly sought after market for high-end retailers. The Chinese consumer is one of the world’s most influential, with their thoughts and opinions on luxury goods being heard everywhere. The future of luxury brands in China is looking brighter than ever, and it’s sure to be a rewarding experience for both consumers and retailers alike.