China’s Influence on the Market for Luxury Goods

2021-09-05 by JamesD
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Chinese customers constitute a third of the world’s luxury shoppers, so you can bet the world’s top luxury brands pay close attention to events and holidays in China. This focus is in order to harness the Chinese market in order to grow brands in the world’s most populated country. It is in line with this ideology that Fendi selected actor Xu Kai to be its brand ambassador after running several campaigns featuring the Chinese actor over the years.

  Luxury brands like Fendi believe in using local Chinese celebrities and personalities to promote their brands and expand their reach into the Chinese market. This strategy has been employed by luxury powerhouses despite scrutiny from Chinese authorities and rising friction with the west.

Valentine’s day has been around for some time in China, where it is celebrated mostly by residents of major cities like Hong Kong and Shanghai. In China, Valentine’s Day is not as big a deal in rural areas and small cities compared within urban areas and big cities. It remains unclear when Valentine’s day was introduced to China by the western world.

What is quite clear is that several luxury brands have joined the Chinese Valentine’s day bandwagon and have launched editions of their luxury items to reach Chinese customers. Several analysts believe that China is the future of luxury adoption and purchases, which is why Luxury houses are focused on Chinese customers now more than ever before.

Gucci has introduced an apple print collection for this year’s Chinese Valentine’s day that will be sold on August 14. Gucci’s campaign and a new collection inspired the reinvention of the luxury designer’s logo to a motif with a red apple. Gucci has also been actively promoting across social media channels where users are encouraged to take pictures with the company’s billboards.

Christian Dior’s approach to Chinese Valentine’s day is similar to Fendi’s:  they both employ local Chinese celebrities as ambassadors, leveraging their popularity to promote products. Dior unveiled Yang Caiyu and Angelababy to create awareness around and sales for its new Valentine’s Day-themed collection.

Dior’s approach also includes the establishment of stores in Nanjing and Shenzhen as well as Cafes in Xi’an and Shanghai, called “Dioramour Cafes”. These stores are leveraging the power of local celebrities in line with the brand’s drive to create awareness in China and to remain in the hearts of Chinese luxury shoppers.

When in China, well, you do things like the Chinese. Chinese consumers use platforms like Wechat, so global brands are paying more attention to these platforms and programs where millions of Chinese customers are active. They’re also kicking off their Qixi programs and advertisements on these e-commerce and messaging platforms.

Young Chinese customers can be easily targeted online on apps like WeChat, because they enjoy making purchases online. Apps and online purchase channels are now the major source of information for a large chunk of Chinese customers and Millenials.

Qixi isn’t the only Chinese festival that luxury brands celebrate either. The Lunar year and 520 are two such festivals that luxury brands celebrate with the Chinese.