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How Chinese Millennials are Rewriting the Future of Luxury Brand Experience

Posted By: SGK May 08, 2019

This blog post has been contributed by Jenny Chua, integrated head of creative, Brandimage China.

One-third of global luxury sales come through Chinese consumers aged between 18 to 30. China's personal luxury goods market is estimated to increase by 6% over the next five years. It is no question that these consumers are changing the face of the luxury experience in China and globally.

READ: 4 Keys Trends That Define How Millennials Interact With Brands

Young Chinese consumers prefer unique products over exclusive items, artful over artisanal and personalised over universal. They are a generation that expresses every part of lifestyle instantaneously on social platforms. No longer do they sit around for their loyal brand to launch a product; instead they follow a blogger whose content is more relatable to them to provide a review of the product before the official launch.

They value luxury products as high-quality items rather than expression of wealth. All of which identifies with the traits of Chinese millennials or aka 'Chinese Luxury Shoppers' - directing luxury hubs to get on the bandwagon of using social platforms to connect with them.

Dilution of sales between online and offline channels has forced luxury brands to undergo sales and marketing transformation as it races with new luxury shoppers. This shift drives brands to engage with millennials, build a relationship and maintain the community to have a visible presence amongst the sea of posts that the overloading the social accounts.

With luxury hubs leveraging the social platforms to maximise their social network, let us take a look at the three unconventional approaches undertaken by brands:

Luxury enters mass. A locally developed app, Douyin, known as Tik Tok internationally has captured 500 million monthly active users and 250 million daily active users, surpassing the likes of Instagram’s Stories feature, and Snapchat. With more than 46% users identified as millennials and Gen Zs, these users account for more than 50,000RMB transactions via the platform. Luxury brands have begun redesigning their digital marketing strategies to meet them.

For instance, the renowned Paris label, Louis Vuitton promoted its Christmas campaign by posting short videos and linking the product URL to the brand's e-commerce page. This strategy propelled customers to widen their choice of selection before proceeding to check out increasing sales for the brand.

Michael Kors took a different approach through the #TheWalkShanghai challenge. App users uploaded their version of ramp walk with customised branded filters. As users created their content with branded assets, brand engagement increased, and its exposure through subsequent social contents increased traffic to its page.

WeChat, luxury's new BFF. Luxury brands on WeChat go beyond the regular WeChat services to build fun and interactive experience for Chinese luxury shoppers. Consider, Sergio Rossi's WeChat mini-program to harness the direct-to-consumer luxury trend in China enabling consumers to personalise their footwear. The e-retail experience offered customers a one-stop shopping destination — providing the brand with 360 degree coverage through social media sharing and influencing the purchase decision.

French cosmetic brand, Guerlain, deployed a WeChat gamification marketing plan to introduce their new lipstick to China. Participants entered a racing game where winners have to go to the retail store to retrieve their awards. The omnichannel experience increased brand presence online and gained footfall to the brand's physical store.

Luxury takes flight. While some luxury hubs create an exciting online experience, others leverage travel retail stores to provide an unforgettable shopping experience for passengers.

Yves Saint Laurent (YSL) Beaute launched its first travel retail pop-up event at LA airport - one of the busiest airports with a large number of Chinese passengers. To build traction towards the booth, YSL invited four Chinese influencers to participate in different activities to showcase YSL's makeup looks.

The pop-up event offered a customisable lipstick arena, instagrammable photo corner and a centre stage to unleash their inner rock stars. A full 'retailtainment' experience created the mood attracting the younger luxury consumers to indulge in the brand through their creative expression.

In the hospitality sector, the Four Seasons hotel recently implemented its pop-down event in Hong Kong, making it more accessible to Chinese consumers. The two-day consumer campaign promoted the luxury chain's signature dishes served around the globe. It further promoted its event on social media with an easy-to-use hashtag. Creating a sophisticated culinary experience for the guests helps retain lasting memories for the customers.

Luxury brand experience is transforming from traditional product craftsmanship to undertaking an experiential journey with the brand. Chinese millennials are driving this shift in brand experience culture through the usage of social media platforms such as Tik Tok and WeChat. Travel retail concept is also gaining popularity amongst brands to connect with their affluential Chinese passengers. As the future presents itself NOW, luxury brands need to continue dedicating their marketing initiatives to social platforms.