“What was once known as the land of the cheap rip-offs may now offer a glimpse of the future” - Jonah Kessel and Paul Mozur, the New York Times.
In fact, social networking websites play a leading role in influencing consumer purchase behaviour: almost 70% of sales on China's Single's Day during 2015 were driven by social media. Chinese online retailer JD.com reported that 52% of traffic from first time customers originated from WeChat, with 74% of total orders placed on mobile devices.
WeChat boasts 938 million monthly active users and is recognised as the most popular messaging app in China with a predicted 79.1% of all Chinese smartphone users expected to use the platform this year. E-commerce is an integral part of the app as WeChat groups and company accounts provide a space for users to discuss products and brands, helping inspire and inform purchase decisions. Considering the size of WeChat’s user base, this functionality has a significant impact on social commerce in China.
Social media boosts brand relevance in the luxury sector
According to Fortune Character, a luxury consumption research agency, Chinese buyers made 77% of their luxury spending outside China in 2016. China is the world’s number one luxury spender with a particular appetite for Western luxury brands.
To take advantage of this lucrative market, brands need a clear understanding of customers' buying and consumption habits in real time. Traditional display advertising isn’t enough: reaching potential customers in 2017’s competitive market requires a more strategic approach.
A report in the South China Morning Post earlier this year revealed that Chinese luxury buyers are beginning to look closer to home for their retail fix. This calls for more focused relationship building with this target audience.
Dior is a prime example of a proactive brand in this space. The fashion house used social data to grow brand awareness among the Chinese, running targeted social media campaigns and appointing influencers as brand advocates. This included the appointment of the actress Angelababy as a Dior ambassador. A report by RTG Consulting Group highlighted the impact of Dior’s strong visual campaigns, going “beyond tradition and norms” to inspire a new generation of consumers who value playfulness and fun over stuffy materialism.
Dior's investment in social media intelligence paid off. RTG named it the most relevant luxury label among Generation Z (those aged 15 to 24) consumers.
The world’s most lucrative luxury market is emerging in China
China is evolving, and on its way to becoming the most lucrative market for every kind of business imaginable, but particularly for luxury brands.
Chinese spending on luxury goods is set to account for 37% of the overall global luxury market ($147 billion) by 2025. This is largely due to the fact that the number of super-rich Chinese households in the world is expected to exceed those of the rest of the world.
Bain & Company’s 2015 Luxury Market Study identified that consumers are shifting away from conspicuous materialism to place greater value on quality. A further 39% of wealthy Chinese think the logo is no longer the top priority when buying goods.
Brands looking to benefit from growth in luxury spending in China will need to leverage social media and data to inform their sales and marketing efforts. This is particularly vital as Chinese consumers move online: a huge 41% are considering using online channels to make purchases.
The role social media plays in China’s luxury market
Since the role of social media is undeniable in China's luxury market, brands need to make sure that they are ahead of their competition. This calls for a 360-degree view of the social media landscape in China's luxury market. Here, brands can really take advantage of social data to draw meaningful patterns and make informed decisions upon defining their sales and marketing tactics.
Following careful targeting and detailed social media analysis, Dior offered its Lady Dior Small handbag for sale on WeChat for 28,000 RMB ($4,210) between 1st August - 4th August 2016. According to reports, “all 200 models of the bag made available on WeChat sold out by August 2”. More than that, the brand used Chinese superstars including Angelababy, Chen Yifei, and Li Bingbing as influencers to help promote the bag.
Dior’s approach to social media and use of social data sets them apart from the competition in China’s luxury market, illustrating how social media intelligence can help identify trends in China's crowded luxury market. Social media monitoring and analytics tools can highlight:
- Mentions of luxury categories in China
- Topics and hashtags related to luxury products and brands
- Influencers across different luxury categories in China
- Consumer conversation around luxury brands and products
- Customers sharing their experiences with luxury brands and retail in China
- Influencers in the Chinese luxury market
A powerful social media intelligence tool can help brands identify granular insights to empower their digital marketing.
Social media listening puts brands ahead of competition
Social media intelligence, gathered and used effectively, can help brands predict market trends and identify potential business opportunities. Social data used in conjunction with web analytics allows brands to draw a full picture of their audience, which can benefit activity across digital and social media channels.
Using social data helps brands develop content narratives, run targeted paid social campaigns, improve customer service, reduce the cost of future marketing and inform product development.
For almost 10 years, Linkfluence has helped multinational and Chinese brands understand the Chinese social web, using award-winning technology and team of local insights experts in Shanghai and Singapore.
If you think Linkfluence’s social media intelligence solutions can help you grow your business, please get in touch. We are here to serve!