According to a recent study, over 30 percent of the luxury consumers in China do not live within areas in which luxury brands have an offline footprint, making the importance of growing e-commerce capabilities more important than ever in the world’s largest market for luxury spending.
But to address this, brands need to do more than simply making one-off investment to set up shop on leading Chinese e-commerce platforms like Tmall. Establishing a meaningful e-commerce presence in China requires far more thought and strategic input, as attendees of Luxury Society’s event in its Briefing series learned in Paris earlier this week at the Four Seasons George V.
Titled Driving E-commerce Growth in China, executives from top brands including LVMH, Richemont, Lanvin, Hermes, Cartier, Boucheron, Tag Heuer and Parmigiani Fleurier were present at the exclusive breakfast session which featured speakers from Breitling, Tmall, China’s largest e-commerce service provider Baozun and leading independent digital agency for luxury brands DLG (Digital Luxury Group).
“Tmall is, first and foremost, a marketing platform,” emphasised Jacques Roizen, Executive Vice President of Digital Transformation and New Ventures at Baozun, in a panel discussion. More than a sales channel that allows brands to reach a wider audience across larger geographies, e-commerce pure players like Tmall provide them with an avenue to build brand equity and gain exposure. This is especially important given that consumers tend to research online and purchase offline (ROPO), as platform data indicates.
Antonio Carriero, Chief Digital and Technology Officer at Breitling
This then has to be backed up solidly with localised content in order for it to resonate with the target audience – something that brands sometimes make the mistake of overlooking. “Global content doesn’t work,” said Antonio Carriero, Chief Digital and Technology Officer at Breitling in the same discussion. “Brands need to adapt content to local markets. So It is also very important that they empower their local teams, and give them that decision-making power to act and adapt quickly,” he added. Given the fast-paced nature of e-commerce in China, waiting for feedback from headquarters for every promotion or event on a platform like Tmall would put brands out of the race.
In a sea of brands on e-commerce platforms, brands can also consider leveraging Tmall’s wide range of offerings to stand out – including its recently unveiled Flagship 2.0, and other solutions that bring together a blend of online and offline e-commerce experiences – as International Senior Business Development Manager at Tmall Luxury, Alibaba Group, Nicolas Cano shared. Tmall’s consumer insights helps to further support brands in assessing performance and and building content and initiatives that really resonate with audiences.
Pablo Mauron, Partner & Managing Director China at DLG (Digital Luxury Group)
Helping a brand to be successful on e-commerce in China is not a one-man job, but something that involves the tripartite expertise of the platform the brand chooses, its e-commerce service provider (or TP, as they are referred to in China), and its digital agency. However, with so many players in the mix, each entity tends to operate in a silo, never truly working together with the other parties. This creates a disconnect, impacting the brand’s overall e-commerce performance. “Brands need to make sure they break that operational silos and support all their partners. They also have to start trusting them to make the right decisions, and accept that they have to lose control to be agile,” said Pablo Mauron, Partner and Managing Director China of DLG, in his presentation at the event.
He also highlights the importance of brands planning their marketing calendars around the myriad of events on e-commerce platforms like Tmall, instead of trying to fit these events into their existing calendar. “These platform events and milestones are highly established in the market and will offer the brand a great deal of exposure,” he explained. “Brands should take this seriously so as to maximise the impact of their existing assets.”
As China’s e-commerce landscape continues to grow at breakneck speed, international brands need to keep pace by staying on top of trends and user behaviours in the world’s largest market for luxury goods. “As a brand, you cannot dictate how you want to operate, you have to play by their rules,” said Carriero. “The better you are at this game, the more successful you will be.”