Tencent Marketing Insights (TMI) has released “A Latest Chapter to Digital Future – 2023 Report on Digital Trends of China’s Luxury Market” to explore the more resilient Chinese market consumer behavior changes and latest opportunities under the momentum of worldwide luxury market recovery. Prior to now few years, consumers’ online digital experience has been deepening and irreversible. When the buyer trend returns, how one can use digital capabilities to assist brands talk over with consumers and select probably the most suitable marketing soil for his or her sustainable development to reinforce brand visibility and business growth in a roll? In 2023, the Ministry of Commerce has positioned it because the “12 months of Consumption Boost,” driven by multiple aspects similar to the recovery of the tourism industry, and the support of consumption policies. Because of this, the vitality of the luxurious market has recovered rapidly at the worldwide level. After the storm, the luxurious industry transitioned to a stable state, with brand visibility steadily emerging from chaos. As a vital growth engine for the worldwide luxury market, China will further unleash its growth potential. Within the long-term digital anti-pressure environment, the complete industry has ushered in a latest chapter of the digital future.
George Xie, Head of the Luxury and Beauty Goods Industry planning at Tencent Marketing Solution.
On June 21, Tencent Marketing Insights (TMI) with evaluation from Boston Consulting Group (BCG) released “A Latest Chapter to Digital Future – 2023 Report on Digital Trends of China’s Luxury Market” in Cannes. This report not only captures the expansion of China’s luxury market but additionally highlights the empowerment and influence of the Chinese marketplace for brands under the long-term digital construction of brands.
Latest Vitality to Drive Future Growth
The general market is powerful, dynamic and teeming with growth opportunities. The report indicates that driven by positive sentiments similar to living-in-the-moment mentality, growing demand, consumption upgrades from the brand new generation, favorable policies and environment, and resurgence of social occasions, luxury spending by Chinese consumers is projected to grow by 15-20 percent and reach 550 billion RMB by 2023. Amongst them, the mainland consumer market will grow barely by 0-5 percent to 450 billion RMB driven by higher service, improved domestic supply, and the narrowing price gap between domestic and overseas markets. While there’s anticipated to be some recovery in outside mainland spending as travel resumes, it’s unlikely to return to the extent seen in 2019.
Luxury spending by Chinese consumers is anticipated to grow by 15-20 percent and reach $550 billion RMB by 2023.
Out there growth cycle, there have been changes within the essential contributors on the consumption side. The heavy spenders proceed to be probably the most significant force, comprising only 11 percent of total consumers but accounting for 40 percent of the whole spending. Moreover, the consumption momentum of the shopper group aged 30 and below and the second-tier and below customer group is increasing becoming an emerging force and future growth momentum of the luxurious market.
“The underlying forces behind luxury spending is upper middle class and affluent consumers in China. We discover despite the up and down within the macro environment, this group of consumers are relatively intact,” said Veronique Yang, BCG Managing Director and Senior Partner.“The posh experiences in China are almost on par with the international markets without delay.”
Veronique Yang, BCG Managing Director and Senior Partner.
In response to this modification, brands have to tap the consumption potential of three customer groups. Heavy spenders are most interested in brand events and brand advertisements, valuing quality and product practicality, and making purchase decisions based on self-gratification. GenZ (post-95s) is driven by dynamic product selections with design and fashion elements, displaying less brand loyalty and being more influenced by brand internet marketing dynamics. Customers from tier 2 and below cities exhibit characteristics of a younger generation and medium spenders, placing more emphasis on online creativity and localized content, with the Weixin ecosystem being their primary touchpoint.
Heavy spenders proceed to anchor the market and younger generation and lower-tier residents spending are still on the rise.
On this regard, Lin An, BCG Managing Director and Partner, said that we’d like to know what exactly are the important thing consumer journeys of our brand, what’s the role of all the varied complicated touchpoints, how one can allocate resources, and what sort of products and repair to offer. We consider this group of consumers are the long run drivers of growth in China, how one can capture them and how one can activate them can be a really difficult query for brands.
Lin An, BCG Managing Director and Partner.
Digital Evolution to Explore Unique Dialogue Fields
Although Chinese consumers have different forms, when it comes to channels, digitalization has penetrated the consumption habits of just about one hundred pc of the shopper base. Based on Tencent’s remark, the digitization degree of Chinese consumers has deepened up to now three years, and the each day time spent on mobile Web is almost 6 hours, which is 28 percent longer than in 2019; commodity e-commerce sales accounted for 27 percent of total retail sales, a rise of 29 percent from 2019; the share of users using mobile payment increased by 20 percent to 87 percent in comparison with 2019, and all three of the above are above the worldwide average. Under this irreversible digital trend, the era of name marketing we live in has officially modified to an era of consumer demand.
Today, the buyer interaction environment is very digital, especially with regards to purchasing behavior. In Western, the brand’s official web sites are dominant, accounting for 38 percent of European online sales coming from brand.com; while EC platforms are dominant in China, similar to Tmall, Jingdong and other platforms occupy the essential position, but an obvious phenomenon is that its share is decreasing, from 83 percent in 2019 to 74 percent in 2022, quite the opposite, more opportunities flow to social commerce platforms.
Tencent plays a big role in supporting the users ’all-in-one online journey.
Under such a trend, Weixin Mini Program as a booming channel, is forming a latest model of Brand.com, and providing high adaptation soil suitable for the event of various brand types for traditional retailers, international brands, and emerging brands. Kiki Fan, General Manager of Industrial Sales Operations, Tencent Marketing Solution, identified that due to the range of social connections, it forms a latest model of name.com, integrating the functions of chat, browse, read, watch, search, purchase and repair. Luxury brands could position the assortment to attach with consumers within the Mini Program, and all these touchpoints have been developed within the Weixin ecosystem.
Kiki Fan, General Manager of Industrial Sales Operations at Tencent Marketing Solution.
At the identical time, Weixin Search, Weixin Channel and other diversified touchpoints help the brand to develop cooperatively within the Weixin ecosystem, while the content side and the deep link between the server and the user jointly construct a whole Brand.com, and upgrade to the brand’s infrastructure that may precipitate the brand-owned assets.
Digital Upgrading Contributes to Sustainable Development
As probably the most sought-after digital ecosystem amongst luxury brands in China, the Tencent ecosystem, with its powerful digital matrix, enables brands to reinforce their cross-platform marketing. By leveraging this ecosystem, they will effectively reach a bigger audience across various vertical networks and connect with high-quality potential consumers by capitalizing on cross-platform synergies.
Tencent incorporates the functionalities of fast messaging, video sharing platforms, online streaming platforms, searching platforms, e-commerce platforms, and short-form video platforms. Tencent’s evolving ecosystem includes creative exposure, private domain, E-CRM service, social video, social search, KOL seeding, etc., covering every step of the luxurious consumer journey through awareness, consideration, purchase and advocacy, and serves two major purposes of name constructing and business growth within the marketing process.
Tencent covers every step of the luxurious consumer journey.
Weixin, the indispensable social platform in China, boasts over 1 billion monthly energetic Chinese users who spend a median of over 70 minutes per day throughout the app. It offers an all-in-one solution for brands, catering to their diverse needs.
As consumers’ perception of brands is becoming digital, to precipitate long-term brand equity and have a stronger influence on the brand new generation, Tencent helps brands to make brand constructing from festival marketing, event marketing, and youth activation.
Based on Tencent Marketing Insights, social gifting rebounded to the highest 10 aspects of luxury purchases. To fulfill the needs of consumers, love and gifting seasons have an excellent upsurge in Weixin. Within the 5 social love seasons, the whole search volume of luxury brands exceeded 50 times that of normal times. Brands can broaden the communication scene with consumers through revolutionary content, combining Chinese cultural and social DNA, and expanding gifting seasons to deepen the imprint of consumers.
As well as, the high-quality content of social video platforms is on trend. Weixin Channel has greater than 800 million monthly energetic users, including greater than 137 million luxury industrial users. With such an enormous potential user base, brands have more social-driven, through T-live Maison, carrying out fashion shows and exhibitions to reinforce viewability and produce big exposure in a short while(1h).
Tencent Marketing Insights show that as much as 75 percent of latest luxury buyers are under the age of 30. Within the face of this chance market, brands can seize the brand new frontier of the Chinese market through the content and technology within the Tencent ecosystem, and use QQ Music, Super QQ show, Tencent Games, and other young communication methods to deepen the link with youth activation.
Then again, Tencent Marketing Solution can be helping luxury brands achieve business growth. Weixin Mini Program is like an excellent APP of name.com, rooted in Weixin to maximise user reach, with convenient access and sharing, which has multi-touchpoints to help LTV operation and help brands precipitate their self-owned user assets.
At the identical time, rising bidding promoting effectively enlarges online business. The report shows that bidding promoting investment has brought 49 percent of sales growth, while Weixin Search is the efficient path to attach consumers and profit growth. Under the influence of digital channels, irrespective of the pre-trip seeding or service-providing on a visit, it has driven luxury consumption outside the mainland.
Amplifying online business through efficient bidding ads.
In summary, based on Tencent’s digital technology and integrated marketing touchpoints, brands can higher convey luxury aesthetics on this soil, establish meaningful connections with consumers, and drive asset recycling and business growth through digital operations. With Tencent’s two-pronged approach, luxury brands are breaking boundaries and thriving in the brand new digital era of China.
Breaking boundaries for thriving success: embracing the brand new digital era of China with Tencent.
Based on Dan Shu, Head of the Luxury and Beauty Goods Industry of Tencent Marketing Solution, “For the long-term development of luxury brands, we realize that we must always focus more on brand assets than simply sales volume by promotion, so we’re doing the sustainable work to formulate sustainable strategies for luxury brands in Tencent ecology.”
Dan Shu, Head of the Luxury and Beauty Goods Industry at Tencent Marketing Solution.
Based on Tencent’s omni-operation ecosystem, brands can leverage its inherent benefits to construct their branding, connect with consumers, and drive business growth through strong content and high-quality customer groups. Under the digital wave, the upper the extent of name digitalization, the greater the market competitiveness will undoubtedly be.
As a luxury and sweetness digital global business platform, Tencent goals to help brands of their digital construction, redefine brand value and achieve sustainable growth through 4 core values: immersive brand experiences, creative breakthroughs, customer-centric engagement, and beneficial business growth.
No Comments
Sorry, the comment form is closed at this time.