Aside from the repatriation of Chinese tourists and the geographic expansion of luxury brands in lower-tier cities, the rise of e-commerce has also played a crucial role in the growth of China's luxury market in recent years. A centralised market dominated by conglomerates such as Tmall and JD.com is more likely to drive scale in luxury e-commerce than fragmented Western markets. In terms of CAGR, luxury e-commerce in China has outperformed the overall market over the last three years.
At Luxury Society Keynote 2023, Chester Cheng, President at China’s leading digital retail service provider Buy Quickly, shared the opportunities for luxury e-commerce in China and how emerging technologies such as AI will reshape the industry.
In the words of Cheng, young digital natives will not only be early adopters of luxury e-commerce to fuel growth, but they will also alter the playbook of brands in this industry, such as the way of content marketing. “The GMV is becoming more dependent on products and content. The challenge is how to generate or create content that will pique the interest of your target customers.” Younger generations’ demand for dynamic content – video and livestreaming – is compelling brands to invest more in such content.
Furthermore, the ability for customization will determine how far the brand can go. Cheng takes the local cycling brand GRC as an example; the brand has continued to send him greeting cards on special occasions such as his birthday, whereas many international high-end brands miss out on such communication opportunities. In his opinion, customization is important, but it's not rocket science; what matters is how brands continue to do these laborious things repeatedly, while others get tired of it.
Finally, Cheng shed light on the impact that AI technology will have on this industry. He believed that the role of AI in luxury marketing did not lie in simply following suit. “What makes luxury products luxury is their unique DNA,” he said. “When AI is generating these contents, instead of following or copying, it chooses the DNA, tone, and style that the brand suits best.”
Watch the video for his full session. A PDF version of his presentation is also available for download at the link below.