China Digital Roundup I Mark & Spencer, Tiffany, Instagram, Alibaba

A roundup on how digital is transforming our life and business – both in China and the rest of the world through December 19th.

Mark & Spencer embraces new shopping technology, by Fashion United

Mark & Spencer Technogy store

Retailers including John Lewis and Marks & Spencer are embracing new technology, including mobile point-of-sale tablets, Google mapping and enhanced self-service terminals in a bid to make shopping even more convenient for its customers.

Department store John Lewis is trialling mobile point-of-sale over the Christmas period in three stores, Cheadle, Brent Cross and Peter Jones, as it embraces its use of shopping technology. Each store will use transactional tablets that allow customers to skip the queues at till banks and make their purchases directly with the member of staff on the shop floor who advised them.

Each tablet will be fully linked to the shop’s till systems, allowing customers to fully complete their purchase in the shop or arrange home delivery, in a development that the retailer states is a UK first. In addition to offering payment assistance the tablets will also give shoppers and the assistants access to a range of product information including customer ratings and reviews on johnlewis.com. Initially, the tablets will be trialled in a number of departments including technology and white goods.

 

Tiffany debuts Tiffany Diamond in Beijing with original music score, by Luxury Daily

Diamond Beijing Tiffany & Cie

Jeweler Tiffany & Co. employed Chinese composer Tan Dun to create a piece that sets the tone for the brand among affluent consumers.

Mr. Dun’s composition was inspired by the jeweler’s Tiffany Diamond, a 128-karat yellow diamond that made its debut in China early in December. Tapping a local, yet world-renowned, musician will help Tiffany appeal to affluent Chinese consumers with a penchant for modern classical music.

“This composition by Mr. Dun creates excellent content for Tiffany to use in various forms of social and digital media to reach a large audience of followers and to attract new followers in China,” said Ron Kurtz, president of the American Affluence Research Center, Atlanta.

 

Hong Kong’s Luxury IFC Mall to Launch E-Commerce Site, by Red Luxury

IFC Mall China

Retail has been forever changed by e-commerce and a more connected consumer. In a nod to a growing trend that merges online and offline channels, Hong Kong’s IFC shopping mall is going online, the first time for a Hong Kong mall operator.

IFC Mall will launch an e-commerce website that allows shoppers to access products offered by its luxury brand tenants.

“The internet is changing the way in which people live, and we now have to run a business in ways that we never imagined before,” said a source. “It will not create direct competition with tenants, but help to reach out to more potential customers.”

 

What Instagram Direct Means for Fashion Brands, by Fashionista

Instagram Direct Feature

On Thursday, Instagram unveiled Instagram Direct, a new feature that allows users to message photos and videos to up to 15 of their friends at a time, rather than all of their followers.

It’s like Snapchat, but with a richer featureset: Images and videos don’t disappear seconds after viewing them, and you and your friends can have private conversations about the messages you send to each other in a comments section.

By limiting messages to 15 people at a time, the opportunity Instagram Direct offers for fashion brands and retailers — which generally want to reach as large an audience as possible — may not be obvious.

 

What Chinese Shopped on Alibaba Marketplaces in 2013, by Technode

alibaba online platform

The ever-growing online shopping market in China helped transactions on the past Nov 11th, the annual online shopping day created by Alibaba, reach a record high.

Nearly 6,000 people in wealthy areas of China spent more than RMB 1 million (about $164,000) each on Taobao platforms in 2013, as buying cars, land-use rights, expensive vacations on Taobao became available in the year.

Alibaba released a report on Alibaba Group’s Taobao Marketplace, Tmall and group-buying service Juhuasuan this year.

Infographic – Online Video: What Are the Chances?

While 74% of advertisers manage at least one issue related to digital, they expect agencies to offer them usable ideas on all media. In parallel, brands expect more agencies they have an advisory role.

According to Wyzowl video agency, this infographic shows the difference video makes in for online sites on a worldwide scale. Specifically it shows how video can impact consumers and business sales by affecting click throughs, conversions, time on site and purchases.

Online Video Trigger purchase

China Digital Roundup I P1, Line, Condé Nast, McLaren

A roundup on how digital is transforming our life and business – both in China and the rest of the world through December 13th.

Using Big Data to Track Chinese Fashion Trends, by Technode

P1 Big Data Exhibition

With a database of over 6 million street style photos taken across China’s biggest cities and through big data analysis, Chinese lifestyle focused social network P1 is now able to track and predict fashion trends as the develop across China.

Starting this Saturday, P1 will host its Great Style Leap exhibition in Beijing’s Taikooli shopping district. The Style Leap exhibition tells the story of China’s rapidly evolving fashion scene driven by urban trendsetters.

 

Line ventures deeper into m-commerce with make-up flash sale, by Tech In Asia

Line & Maybelline

Today, messaging app Line announced a partnership with all-in-one e-commerce logistics firm aCommerce and L’Oreal’s Maybelline New York to bring the cosmetic brand’s newest product to Thailand.

With this partnership, Line users will get access to an exclusive flash sale on the platform which will last from Monday, December 16, to Friday, December 20. Users who buy this not-yet-disclosed product within the promotional period will be the first to own it before its official release next year.

 

Condé Nast Venturing Into Global E-commerce, by WWD

Conde Nast eCommerce Galeries Lafayette

Condé Nast operations on both sides of the Atlantic have joined forces to break into the global e-commerce game, with the first shoots of new business set to appear before the end of next year.

Condé Nast in the U.S. and Condé Nast International have launched a new division devoted to e-commerce, naming Franck Zayan, who is currently responsible for the e-commerce activities of Galeries Lafayette, as president. Zayan will be based in London, and begin work on Jan. 6.

 

McLaren looks to broaden presence in China throughout 2014, by Luxury Daily

McLaren Shanghai

British sportscar manufacturer McLaren Automotive is set to double its Chinese dealers in 2014 from four to eight as it continues to gain traction in the market.

The brand unveiled its Chinese language Web site and its first four dealers in September as it tried to hit the ground running. Although it may seem that the brand has some catching up to do compared with other luxury automotive brands that have flourished in China, it was able to draw upon its racing reputation for an early boost, having won the Chinese Grand Prix in 2008, 2010 and 2011.

 

Are You Ready For the Store of the Future? by Profit Guide

Store of the Future

This vignette is a hypothetical composite—but not for long: Technology is transforming the in-store experience. Inexpensive analytics software and slick hardware already allow retailers of all sizes to make shopping easier for consumers who demand convenience. “Online shopping has conditioned consumers to expect more from retailers in-store,” says Kevin Falk, CTO at Montreal point-of-sale system developer LightSpeed.

 

Infographic – People Shopping on Mobile Devices Visit More Sites Than Those on a PC

Mobile devices have made it possible for people to shop anywhere, anytime, and apparently, they’re taking advantage. According to Millward Brown Digital, people who shop from their mobiles visit more retailer sites than those who shop from their PCs (6.2 retailer visits per month on mobiles versus 2.9 on PCs). Mobile shoppers also use search engines and social media sites more than PC shoppers do. With all that opportunity to capture mobile purchases (or lose them to rivals), there’s all the more reason for retailers to make sure their mobile strategy is airtight.

 

Infographic Data Mobile Shoppers

Challenges Magazine – Luxury Sales Overcomes Anti-corruption Measures in China

Campaigns against valuable gifts and purchases paralyze apparatchiks. But consumption patterns evolve.

Galeries Lafayette Beijing

Galeries Lafayette, Beijing. The well-known Parisian department store opened in mid-October occupying more than 30,000 square meters of retail space. Evidence shows that large luxury groups still rely on the Chinese market.

How much bribes, kickbacks, and gifts in kind are received annually by China’s officials, politicians and managers of state companies? Answer: it amounts to a mountain full of cash. In 2011, China’s central bank estimated, the sums diverted over the last twenty years summed up to more than 95 billion euros, so about 5 billion a year. Staggering.

Former Prime Minister Wen Jiabao noted that this evil has become “the greatest threat to the ruling party”, and its new leader Xi Jinping expressed that this is a war with no rest towards the millions of corrupt members. The system executives are banned from purchasing jewelry, high-end wine, and luxury leather goods with public funds. Also, they are barred from receiving presents with high monetary value, even though gifting is fundamentally rooted in the culture of the country and its business practices.

All that glitters and blings have been suppressed and perceived as a disgrace due to the new government regulations that have been passed recently. Even ministers store their gold watches – accessories they are crazy about, which represents 40% of Chinese luxury goods – on field trips to keep a low profile. A watchword against luxury already arises for large international brands, while China is expected to account in 2015 at least one third of the global market, estimated at nearly $ 175 billion, according to a study by McKinsey.

Previous drop in sales

During the Chinese New Year in February, a few months after the official launch of the anti-corruption campaign, “luxury goods spending dropped to $830 million, or – 53% compared to the previous year,” says Patrice Nordey, CEO of VELVET GROUP, a digital consulting agency based in Shanghai.

“Receptions and banquets have been cancelled, leaders have been indicted, Rolex watches and ostentatious Hermes hand bags have been banished from the media landscape. The anti-corruption campaign has had a real and noticeable effect on the sales of the luxury groups”.

However, most officials refuse to make a connection between this campaign and the fall of their sales.

“In reality, the slowing down already started since 2010, which was well before the anti-corruption measures. We observe a general slowing down in the growth of the luxury retail market in China, from an 18 % growth in the first quarter of 2010 to a less than 14 % growth in the first quarter of 2013”, adds Patrice.

Consequences: after years of strong growth over the last decade, large luxury conglomerates like LVMH and Kering select their new store locations more carefully within the 3000 shopping centers in the country and have taken measures to completely freeze new settlements stores.

Democratized consumption

Should we be alarmed that French houses rely on China as a growth driver? Not necessarily. Evidence shows that the dynamic is still there. Galeries Lafayette has just opened a store dedicated to fashion that covers 30,000 square meters in one of Beijing’s most popular neighborhoods near  Shin Kong Place, the luxury hotel in the created from scratch in 2007. This is the place to be. Chanel, Gucci, Prada , Armani, Italian and French ready-to-wear brands, more than 900 premium brands, the greatest wine brands in the world , rivers of diamonds … all this has generated a turnover of 6.5 billion Yuan (780 million Euros) in 2011. This has made it the most profitable luxury shopping area (excluding real estate and automobile) in the country. Nick Debnam, Asia-Pacific president of consumer markets with KPMG branch, expresses that the luxury sector “is not in recession,” despite a slowdown.

Online Sales Luxury Market China

In 2015, Online sales is expected to represent 10% of the luxury market in China (Source: iResearch).

“The growth drivers are still there and consumption patterns are changing,” he insists. In fact, luxury is no longer reserved for only Party apparatchiks or large fortune makers in the country. Nearly three-quarters of the 80 million Chinese tourists who travel the world each year now return with luxury purchases which they buy at a price 20-30% cheaper than in China. Their favorite shopping destinations include Hong Kong, Japan, Switzerland and France. The average Chinese consumer’s shopping expense has increased to 1,500 euros, which is far higher than that of the Russians and Indians. Thus, luxury groups have put in place some comprehensive strategies to serve Chinese customers not only “in China, but also in their stores in Paris, Milan and Geneva,” says Patrice Nordey.

Boom on Internet

Luxury stands out on the Chinese Web – China ranks as the biggest market for e-commerce worldwide, before the United States. Estimated at 1.35 billion Euros in 2011 in the former Middle Kingdom, the e-luxury market has indeed jumped 70% last year with a total 2.3 billion Euros of online spending. It is expected to exceed 5.5 billion by 2015, according to iResearch Chinese cabinet, and thus capture 10% of the local luxury market. “The anti-corruption campaign will not change the situation,” said Wang Jun, a Beijing blogger.

This strong growth of online luxury disrupts traditional models, offering “the possibility of exploring brands on your iPad, via social networks such as Weibo, Wechat or P1. Consumers have the option to buy luxury goods and have them delivered straight to their home through online retailers such as Yoox, Glamour Sales, and Shangpin”, explains Patrice.

Is China the new continent for luxury? Despite the impact of the current campaign that targets the “rogue cops” Party, opportunities remain “for brands that manage to adapt to this new context.”

Article by Pierre Tiessen.

China Digital Roundup I Martell, Bomoda, Snap Fashion

A roundup on how digital is transforming our life and business – both in China and the rest of the world through December 5th.

Martell’s Savvy WeChat Campaign Engages China’s Frequent Flyers, by JingDaily

Martell WeChat

Travelers making their way through Beijing and Shanghai airports this fall can participate in an innovative new ad campaign by Martell Noblige Cognac that combined mobile and offline marketing with a focus on interactive participation by consumers. The campaign, entitled Dangdai MingshiYingxiang Xun Lu (当代名士•映像寻旅) in Chinese translated as “Modern Elites and their Journey of New Elegance”, sent famous photographer Justin Jin to 6 Chinese cities to photograph “men of elegance” .

The Beijing and Shanghai airports both featured interactive exhibition of Jin’s photography with a special QR code below each photo. Scanning the QR code allowed users to access the brand’s WeChat page and access profiles of each “elegant man” with audio descriptions of their accomplishments. The campaign also featured a free plane ticket giveaway to winning participants, and those who were not physically in the airport can send a number or voice command via WeChat in order to be entered in the drawing.

 

Bomoda Launches Mobile App Aimed at China’s Connected Fashionistas, by JingDaily

Popular - BOMODA

Since its launch in May 2012, New York City-based online community Bomoda has been building up a quarter-million strong network of China’s most discerning luxury shoppers through its Chinese-language online fashion and lifestyle newsletter. In the past two months, the curatorial site has embarked on a new chapter with the launch of its new mobile app and social sharing site, enlisting major brands, retailers, and key opinion leaders (KOLs) to promote a new interactive platform that is the first of its kind in the China market.

The new mobile app, launched on November 18 for the iPhone, allows for the sharing of images through the company’s new Pinterest-like social site that was unveiled in October. On the site, users have the opportunity to upload, share, collect, and repost their favorite fashion-related images, as well as share on major Chinese social media sites including WeChat Moments, Weibo, Tencent, QQ, and Tencent Weibo. Its high-fashion aesthetic makes it the first of its kind in China, standing out from other more mass-market Pinterest-like sites such as Meilishuo and Huaban.

 

Stores Offer Click & Collect to Attract Consumers this Holiday Season, by Luxury Daily

Click & Collect

Bricks-and-mortar retailers are having to compete with online retailers such as Amazon for the holiday shopping season, and they are finding new ways to get consumers to shop with them. A number of department stores offer click-and-collect services where consumers can order items online and pick them up in-person in-store and, in most cases, with no delivery fee. By doing this, stores are able to merge the ease of online shopping with speedier return, getting consumers to visit their stores in-person for convenience.

Click-and-collect is becoming more popular as it allows the customer the convenience of shopping from home, but [with] the instant gratification of receiving the purchase virtually instantaneously,” said Robert Cuthbertson, senior manager at Boston Retail Partners. “Customers can avoid long lines, busy fitting rooms, being overwhelmed with roaming racks and racks of clothes and product.”

 

Snap Fashion and Styloko: Search Using Images to Find The Perfect (and Cheapest) Wardrobe, by Metro

Snap Fashion app

Snap Fashion just might be your secret weapon this party season – the website is the perfect tool for finding the exact item a celebrity is wearing. You can also use its phone app to snap an image of a dress you find in a shop to browse for similar alternatives, or to find the perfect heels to match.

The technology trawls through thousands of possibilities to find you that exact item, before redirecting you to the retailer’s site to purchase. Or it will present you with styles similar to the item snapped, from a range of different brands and price points.

 

How Ready is Southeast Asia for Online Payments? by Tech In Asia

Online Payment APAC

Rapid economic expansion, a young population, and low-cost smartphones and tablets are creating tech-savvy generations across Southeast Asia. Major e-commerce players such as GrouponeBayRocket Internet, and LivingSocial have ventured into Southeast Asia, making significant investments into these markets. With increasing penetration of e-commerce into Southeast Asia, global payment companies such as PayPal are investing in the region. But as they do, stiff competition is being demonstrated from a number of local players.

While the industry’s potential is obvious, technology investors and global payment providers should be wary of rushing into these markets without understanding the cultural and regulatory differences of each country, which affect how merchants and consumers behave. A tailored strategy then, which considers the unique stages of each market’s development, factoring in technology, infrastructure, consumer preferences, and regulatory environment, is far superior to a regionalized blueprint approach.

Marketing to China – 5 Questions with Patrice Nordey, Founder of VELVET Group

Velvet Introduction

1 What is Velvet’s story and what are the services it offers to its clients?

VELVET is a digital consulting agency based in Shanghai specializing in the deployment of communication strategies and online marketing, as well as e-commerce activities and structure for the Chinese market. We cater to international luxury, fashion and cosmetic brands. VELVET’s clients include Boucheron, the famous jeweler in Place Vendome, Galeries Lafayette department stores, brands from L’Oréal or Kering (ex-PPR) one of the largest luxury groups (Gucci, Bottega Veneta, Balenciaga, Saint Laurent, etc..) and lifestyle brands (Puma, Volcom, Electric, Cobra).

Our main playground is the Chinese market, though our customers are international. This has led us to realize missions in Paris, New York, Melbourne, Hong Kong and Florence during the past year. I [Patrice Nordey] launched VELVET after six years of experience in China. It is the result of my first digital adventure started in 1998 with the founding of French online magazine Neteconomie.fr, which was later sold to a sizable media company.

 

2 What is the real reason that inspired you to start your company in Shanghai?

Creating VELVET is the willingness to reconcile two distant worlds, luxury and digital (internet and mobile). The Chinese market has become since this year, the largest market in the world of e-commerce (ahead of the United States) and the most important consumer market for luxury goods and services. We are betting that a position in strategic consulting in this segment will bring tremendous value to the market. Of course, this is in addition to advertising agencies like Publicis-Omnicom, WPP, Dentsu, Aegis Group and more specialized agencies which have greatly strengthened their presence in the last 5 years.

 

3 What is your vision of the luxury market in China in 2013?

China’s market represents 25 % of this year’s global luxury market and remains very strong, despite a slowdown since 2010. This makes it the most attractive market for luxury brands. Moreover, it remains highly fragmented and rapidly changing. The share of purchases of luxury goods by Chinese traveling abroad, including France, for example, is the most dynamic component. Consumers are slightly tired of traditional luxury brands and are more in favor of “affordable luxury” and dynamic premium brands. Sophisticated clientele take a closer look at more specialized brands such as Christian Louboutin or Maje that arrived in China this year. Chinese consumers browse on their smartphones and iPads to discover luxury brands and products, not only at home but also when shopping in store. There is a unique opportunity here to capture and engage customers via social media and other mobile-specific applications.

 

4 What is the most important online social platform for a luxury brand in China today?

No platform is perfect within itself. We recommend Sina Weibo to reach a wide audience, WeChat for more interactive communication and the point of sale, and vertical platforms such as P1 to reach urban and more advanced communities in fashion. This year we worked with BoBo, a mobile social networking app catering to Chinese hairdressers and stylists who want to share new hair styles and styling techniques, with a community of 200,000 professionals. The collaboration between a well-known cosmetic company and BoBo was an effort to target high-end salons and famous hairdressers through an online social network. This collaboration was very effective!

 

5 Why luxury brands are afraid to sell on the Internet today? Are they wrong?

This fear is based on realistic problems: counterfeit goods, parallel distribution, sales of luxury goods at rock-bottom price, and other issues that are prevalent online. Naturally, it would not be a confident environment for luxury brands to launch their products online. However, market conditions are gradually improving, along with an emerging class of consumers who want to live a true online “luxury experience” with their favorite brands. I think the real question for these brands is their degree of integration with the stores, the “OmniChannel” approach, as well as the development of real differentiating services based on a structured approach to CRM. Be able to book a shopping appointment online on the brand site, pick up your purchase in the nearest shop, and have access to services such as VIP concierge through the mobile platform. These are the avenues to explore and to differentiate in order to offer a true digital experience within the luxury industry.