China is an important market for luxury retailers looking to expand their audience, but gaining a foothold in such a large, diverse market requires a careful approach that can be quite different from operating a luxury brand in the U.S. Christina Fontana, Director, Strategic Partnerships at Alibaba Group discussed how luxury retailers can find success in this enormous market during a session at NRF.
The first step is understanding just what your specific Chinese audience will look like. Trying to appeal to an entire country of 1.4 billion will just create a muddled message that doesn’t win you any customers, so luxury retailers need to use data and insights to target shoppers that share the brand’s values.
“When we look at Tmall in China, we have almost 800 million customers, but we don’t have 800 million luxury customers,” said Christina Fontana, Director, Strategic Partnerships at Alibaba Group. “The important part is that we’re online and we’re trying to communicate with the right consumers. We help enable brands to find the right target audiences — their consumers among all the consumers in China.”
This makes marketplaces a key element for retailers looking to find their footing in a foreign market. Selling products through an established ecommerce platform helps shoppers find your products, and the initial results can provide a better sense of what’s working and what your potential customers are looking for.
Engagement Beats Discounts on Singles’ Day and Beyond
Luxury brands will want to take full advantage of the 11.11 shopping holiday, which has continued breaking records year after year. However, they can’t afford to look at it as the Chinese version of Black Friday. Singles’ Day has its own quirks and expectations, requiring a very different approach to the traditional Black Friday promotion.
“The difference between 11.11 in China and something like Black Friday is that, for the luxury consumer and luxury brands, we don’t do discounts,” said Fontana. “It’s not a discount moment. It’s really about creating something. You have moments of engagement, of why you want to buy something: limited edition products, capsule collections and special creations. We’re showing you how the engagement preferences of the Chinese consumer are so different when we’re talking about luxury.”
Additionally, Chinese luxury commerce has a stronger social component than U.S. shoppers expect. The relationship is more playful than transactional, with shoppers interested in learning about what’s popular among their peers.
“We’re not going to bring these people into our platform just because they want to buy the cheapest, fastest thing they can,” said Fontana. “That’s not what they come to us for. They come to us because they’re browsing, they’re seeing what’s new, they’re seeing what their friends are buying.”
Perhaps unsurprisingly, this makes social commerce, particularly livestreaming, a key component for luxury brands in China. Fontana noted that even legacy brands like Cartier have not just embraced livestreaming; they also use it to drive connections above and beyond product demonstrations. Highly targeted livestreams are being used as part of customer care functions, to truly bridge the gap between retailer and customer and form a genuine relationship.
“When we’re talking about luxury, and really any kind of passion, there’s an emotional interaction,” said Fontana. “There’s fun. There’s something that we want to see when we go online.”