Banking on the Chinese market
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Update time : 2021-02-28
The robust demand in China - which is also the only major economy to achieve positive growth last year - is a source of hope for global luxury brands, whose sales have fallen amid the COVID-19 pandemic.
The main luxury brands are now doubling down in the Chinese market and are embracing e-commerce, an area they used to shun due to concerns that moving online could erode their high-end brand image.
According to the Bain & Company report, China's annual luxury online penetration increased from about 13 percent in 2019 to 23 percent in 2020.
So far, luxury brands including Prada, MiuMiu, Bvlgari, Louis Vuitton, Hermès and Gucci have opened stores on Tmall, Alibaba Group's B2C online marketplace. From January to November, the online luxury sales of Tmall International soared 72 percent year-on-year, according to data revealed by Tmall.
Some brands have also scaled up their presence in China's social media platforms such as short video website Douyin, the Chinese version of TikTok, as well as shopping platforms Xiaohongshu and Blibli. It's part of an effort to cater to young Chinese consumers who are becoming a major force in luxury consumption.
Wang Xinmiao, a Beijing-based industry observer, predicted that China's luxury market will grow by more than 40 percent in 2021. "More luxury brands will choose China as the first market to launch new products," Wang told the Global Times.
The main luxury brands are now doubling down in the Chinese market and are embracing e-commerce, an area they used to shun due to concerns that moving online could erode their high-end brand image.
According to the Bain & Company report, China's annual luxury online penetration increased from about 13 percent in 2019 to 23 percent in 2020.
So far, luxury brands including Prada, MiuMiu, Bvlgari, Louis Vuitton, Hermès and Gucci have opened stores on Tmall, Alibaba Group's B2C online marketplace. From January to November, the online luxury sales of Tmall International soared 72 percent year-on-year, according to data revealed by Tmall.
Some brands have also scaled up their presence in China's social media platforms such as short video website Douyin, the Chinese version of TikTok, as well as shopping platforms Xiaohongshu and Blibli. It's part of an effort to cater to young Chinese consumers who are becoming a major force in luxury consumption.
Wang Xinmiao, a Beijing-based industry observer, predicted that China's luxury market will grow by more than 40 percent in 2021. "More luxury brands will choose China as the first market to launch new products," Wang told the Global Times.