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China Digital Roundup I Luxury cars, Lanvin, ShangPin, Burberry

A roundup on how digital is transforming our life and business – both in China and the rest of the world through November 29th.

On China’s Roads, Where Luxury Risks Becoming Ordinary, by Reuters

Luxury Car in China by Reuters

Luxury car dealers are resorting to offering customers massages, mini-golf and other gimmicks, hoping this will give them an edge in a ferociously competitive Chinese market where brand loyalty is less common than in the West.

Premium car sales slowed in China last year as the economy eased off the throttle and new Communist Party leadership was installed, but momentum is returning, and China is set to overtake the United States as the world’s top luxury car market by 2020 with annual sales of close to 3 million cars.

A victim of its own recent success, the Chinese market has become a hyper-competitive battleground. Five years ago, there were fewer than a dozen luxury car models sold under five premium brands. Today, that has exploded to more than 90 models offered by 25 brands, says market research firm TNS.

 

How Shanpin Plans to Win Big in China’s Luxury E-Commerce Market, by JingDaily

LANVIN ShangPin.com

Alibaba may be China’s clear market leader when it comes to mass consumer goods, but in China’s online luxury sphere, the market still remains fiercely competitive. With the launch of a new e-flagship platform and several other key marketing strategies, luxury e-tailer ShangPin aims to gain an edge in attracting and retaining savvy Chinese shoppers.

The three-year-old site just announced the rollout of its new online “shopping mall” business platform with the launch of an e-flagship store with partner Lanvin, which was revealed on November 18. The independent store hosted on ShangPin will feature men’s and women’s clothing, bags, accessories, and shoes. In addition to Lanvin, ShangPin is in talks with several other luxury brands to join the service, which marks a major development for the company.

 

China Tops E-commerce Opportunity Study, by WWD

China internet booms

When it comes to market opportunity for e-commerce, China occupies the number-one position, followed by Japan, the U.S., the U.K. and South Korea, according to a new global e-commerce study by A.T. Kearney, a global management consulting firm. They looked at 186 countries to determine the ranking of the top 30 countries. The index evaluates countries according to online market size, technology adoption and consumer behavior, infrastructure and growth potential.

In areas where there are obvious differences between developing and developed markets, the study illustrates key similarities such as consumer sophistication, the creativity and ingenuity of online sellers, intense competition and the kinds of products consumers will buy online.

Bits & Bytes | Iras, Chirpify, iZettle, by Business of Fashion

Iras app fashion topic

Helping luxury brands communicate this sentiment to their customers is Iras, a new app that provides shoppers with a feed of clothes that have been hand-picked for them by the stylists and sales associates at their favourite stores.

According to Chris Teso, founder of Chirpify“hashtags are the new URL.” The Portland, Oregon-based company is turning social networks into sales channels with “actiontags” — a play on hashtags — which makes it possible for users to link their payment details to their Twitter accounts and make purchases directly on the platform.

Elsewhere in the world of payments, iZettle (a company named after the concept of “settling a debt”) is allowing merchants to accept credit card payments via smartphone and tablet.

 

Burberry Reinvigorates Microsite for the Holidays to Expand Reach, by Luxury Daily

Burberry Kisses - Burberry

British fashion brand Burberry is reigniting consumer interest in its Burberry Kisses microsite by injecting holiday themes into the marketing efforts, rebranding the campaign for a new season.

Through the interactive microsite, visitors can not only send a photo of their own kiss, but also see where other people are sending kisses around the world in real time. By adding seasonal elements into a campaign, marketers can renew attention and gain fresh impressions.

Connexions – A Closer Look on “E-Retail: Luxury Gets Going… Finally!” by Patrice Nordey

LANVIN+完稿-1

According to a study done by KPMG, 72% of Chinese tourists traveling abroad claim to have bought luxury goods. These purchases represent a significant proportion of their total expenditure (over 40%) with the most popular products of choice as cosmetics, watches and handbags. The prices of these products bought abroad are 20 to 30% cheaper than in China, and account for half of China’s luxury market today.

However, with the rapid development of online shopping in the Middle Kingdom (159 billion Euros at end 2012), we see pure Internet players taking advantage of this lucrative market in the recent years. Startups such as 5lux.com, Ihaveu.com, Shangpin or Xiu.com (87 million turnover in 2012) buy directly from distributors – rarely trademarks – and short all intermediaries to offer prices 20-50% lower than those charged by official channels shops.

Some of these actors, such as Secoo.com, even sell second hand luxury goods while ensuring the authenticity and condition of the product through strict certifications.

To counter these new discount models – which have tremendously opened consumers’ appetite for the “digital luxury” – premium and high end brands fuss to offer their online distribution model to recreate the conditions of an experience luxury with exclusivity, personalization and value-added services.

Upscale cosmetics brands were the first to launch, for example Lancome or the specialized retailer Sephora in 2006. Marni, Armani, Bally, Dolce & Gabbana, Alexander Wang and the Moncler brands have also launched in 2012 under the auspices of the Italian Yoox platform. More recently, Hugo Boss and Coach launched their e-commerce with a narrow range of products. Department stores such as Marks & Spencers and Lane Crawford also accelerated the development of their Internet offerings for their wealthy clients in China and Hong Kong.

Estimated at 11.1 billion RMB in 2011, the e-luxury market in China jumped by 71% in 2012 with 18.9 billion RMB of online spending. It is expected to exceed 45 billion RMB by 2015 according to iResearch and thus, capturing 10% of the first luxury market in the world.