Coronavirus in China: luxury brands turn to WeChat, AI and influencers amid home quarantines and rising national pride
As consumers feel China was unfairly blamed for its handling of the coronavirus outbreak, homegrown brands are being embraced while technology and sustainability concerns disrupt the conventional wisdom of Western brand biases
The 2010s saw China move assertively to the centre of the world stage, while Chinese consumers overtook Japan as the largest market for luxury goods in 2012. As we enter a new decade, China either leads or is close to leading sectors from outbound travel to beauty, to fashion to luxury cars.
Yet this new dawn of national pride, optimism and the Chinese economic juggernaut has been sharply jolted by the social impact of the coronavirus. The business battleground for brands was already a minefield – the rewards are huge for winning in China, but the pathway there needs a deft understanding of a unique culture, social media landscape and sociopolitical viewpoints.
Before anyone had ever seen the characters Covid-19 in combination, business analysis and advice focused on these leading luxury consumers, often boiled down to targeting millennials and Gen Z, and mastering social platforms from Red to Douyin to WeChat to Weibo. In just a few short weeks, the preferences and behaviours of luxury consumers in China has been given yet another twist that brands have to take into account: the coronavirus has triggered a new mindset.
The greatest shift that society has faced is a homebound, self-imposed quarantine, with caution and anxiety about being outside. This has hit the travel industry and retailers hardest – yet as L’Oreal’s sales reports recently showed, sales actually rose in February due to online orders. Businesses have had to adapt by leveraging Chinese digital platforms in a range of methods: live-streaming, already a favourite of Chinese consumers, has come into its own as savvy brands have provided not only product demonstration but entertainment by having influencers present products in live-stream. The Paris and Milan Fashion Weeks had hardly any China presence, yet brands could live-stream the show events, engaging influencers and celebrities to further bring in the audience and, to put it simply, give them something live to watch while they are stuck at home.
Now is the time to show your brand’s genuine support for China – show that you are standing shoulder to shoulder with China during this difficult time – a time when everyone is paying attention
So far, winning brands have been those willing to change, and agile enough to do so. Success stories have been from businesses that accept and appreciate both the consumption power of their Chinese customers and the “new normal”. At the turn of the decade, the same openness to inevitable change and evolving definitions are key to winning in the market that – despite the big hit business faces in the first quarter – is set to remain the leading market for luxury.
A new report by Reuter Communications, a luxury integrated marketing agency based in Shanghai, looks at five key macro-trends which are set to frame business in China’s 2020s, uncovering what is driving the themes and how we can see them manifested, with what implications they have for luxury businesses – and what can be forecast in the future.
Everything will be interconnected
Digital capabilities have been something of a saviour in the time of the coronavirus, both for brands able to speak to their customers and those customers able to find entertainment on their screens. While omnipresent technology and complete immersion in digital lifestyles are a truism, it should never be assumed that we have reached peak technology. In China, mobile technology leapfrogged laptops, credit cards and Facebook, with WeChat now the super app that is irreplaceable in life.
