media trough M&M Global.“
European luxury brands struggle to adapt in Chinese digital market30.01.2017
Despite a 30% growth in total global spend on luxury goods and a significant increase in the importance of the domestic Chinese market, European luxury brands are struggling to adapt in the region.
While spending in mainland China is on the rise, research by Exane BNP Paribas and customer engagement specialists Contactlab showed that Chinese shoppers are beginning to buy more goods in China itself rather than from overseas, leaving brands like Burberry and LVMH lagging, despite significant growth in the region in Q2 2016.
Contactlab and Exane BNP Paribas tested the Chinese market with their The Online Purchase Process research, which tested 65 parameters, both online and in-store, across three global luxury brands, four e-tailers and one department store.
“The Chinese are not only the most important nationality for luxury goods but also the most digitally advanced consumer population,” said Contactlab senior advisor Marco Pozzi.
“Whilst luxury brands around the world are dramatically improving their digital marketing and ecommerce customer experience, digital in China is different. This is a market where mobile is key, delivery in one to two days is expected as a standard, and the social media landscape is extremely idiosyncratic.”
The discrepancy is credited to European brands remaining committed to email engagement as their primary form of communication, with Chinese operators in the luxury sector favouring mobile marketing and engagement. “Some brands such as Chanel are in fact embracing channels such as WeChat, contacting individuals via this platform at all stages of the customer journey,” added Pozzi.
He continued that the expectations of Chinese consumers include online chat assistance and social elements such as brand and product reviews, as well as the option to pay via WeChat.
These elements are supported by most Chinese ecommerce operators, but European brands are not supporting these features yet. Pozzi also raised the concern of foreign-sourced authentic products and fakes holding back digital luxury.
“Issues remain, but a more convincing transition to authenticity by local champions would confront luxury brands with tough choices, making digital essential and unavoidable,” he added. “While this seems far away today, things in China change quickly, and European brands must be ready to connect with the Chinese consumer digitally.”
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