Luxury Market in China

Luxury brands blaze a trail for social media in China

Luxury brands such as Louis Vuitton, Tiffany and jeweller David Yurman have all used Valentine’s Day as a reason to launch social media campaigns in China these last few weeks and their approach should act as a guiding light for other brands looking to establish themselves in China.

The reason for their success?
The increasing growth of China’s affluent rich – those richer than the middle class but not so well-off as the super rich.
“Today, the affluent are 120 million strong and their annual buying power is $590 biliion. By 2020, this group will number 280 million – 35 percent of China’s urban population or 20 percent of its total population.” The Age of the Affluent by The Boston Consulting Group (
Lancome Feb14 Lancome, for Valentine’s this year, launched a competition on micro-blogging site Weibo, asking fans to send in love poems for their partners, with those who shared or tagged entered into a free draw for luxury gifts. Audi and Swiss watch brand Tag Hever ran similar ‘send a message to your partner’ campaigns.
Luxury brands are way ahead of others in their approach to social media and e-commerce in China. They work hard to build relationships and interact with their consumers, aided by the rapid growth of smartphone usage and building on their own international reputations and brand desirability. They are purveyors of the must-have Western products that the affluent, seeking status and recognition, desire above all else.
The Chinese affluent are seen as sophisticated e-consumers who like to travel abroad and who are more open to adopting a new brand. According to Youchi Kuo, co-author of the BCG report, learning to sell your brand to this community will also have a knock on effect at home: “By mastering the affluent market in China, which appreciates luxury but is also conscious of value, companies will be better equipped to reach their local affluent customers.”
But it is the way that luxury brands interact with their fan base which can inform new social media campaigns – understanding the Chinese consumer psyche and how they interact on platforms such as Weibo and WeChat. They use social networking a lot, more than we do in the West. One of the clear distinctions between China’s affluent and those in the West is the age. The Chinese affluent are much younger and tend to trust foreign brands more than those from home.
However within this large group there are factions that see the world in different ways and the challenge for marketing executives is to target the right people and not waste their marketing budget on a one size fits all solution. For example, there are sections of the Chinese affluent who want a status symbol while others look to hide their wealth.
“One of the clearest factors distinguishing China’s wealthy consumers from their foreign counterparts is their youth: some 80 percent are under 45 years of age, compared with 30 percent in the United States and 19 percent in Japan.”


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