The Month in Luxury - June 2023

Welcome,

As we pass the mid-year mark, we have a clearer picture of the performance of luxury brands in China for the rest of the year. The market is recovering, but there is a growing difference in results between high-end and premium brands, as middle class and aspirational consumers have yet to engage in luxury spending to similar level as 2021.

The disparity between iconic, well-established maisons and smaller brands is also increasing, although certain smaller brands are performing well due to effective, integrated strategies. It is now more crucial than ever that luxury brands localize their strategies, optimize their marketing budgets, and closely monitor the ROI to capitalize on the available growth opportunities.

If you want to gain a comprehensive understanding of the Chinese market and ensure your growth strategies are well-aligned, please don't hesitate to contact us to find out how we can help.

?

Max Peiro

The 6.18 Festivals Shows Cautious Growth in China

6.18 is in the rearview mirror and the results are in. We wrote a brief report that gives our audience the chance to see who fared the best from the festival and some of the reasons behind their success.

A short summary of the insights follows:

• Growth is slow, but growth is growth.
• The dynamics of growth are important – top luxury is growing, premium/masstige is declining
• Supporting this – higher priced products are driving revenue more so than previous festivals
• Smaller brands have seen more success – while some big players did grow, we saw the strongest growth from smaller brands – we point out brands such as Thom Browne, Karl Lagerfeld, as well as others like Jimmy Choo, and Miumiu
• New products have driven success for brands and their ramp up starts months before
• Discounts were bigger, earlier – certain brands leverage a dynamic discounting strategy to capture increased interest during the different waves of the festival

Below you can see the top brands across the four luxury segments that we track, giving you an insight into the top performing brands during the festival. This and more is available in our full report by clicking the button below:

https://tinyurl.com/y6syxukp

The COMPASS Index Q2 2023

At the end of Q1 2023 we released the first installments of the China Re-Hub COMPASS Index.

We calculate a ranking based on social media mentions, activity, and engagement across the key digital platforms in China – WeChat, Weibo, XiaoHongShu and Douyin.

This ranking reflects how much attention the brand has generated during the quarter. Brands rising the ranking have successfully generated engagements through their own social media accounts as well as conversations about the brand from consumers.

Without further ado, here is the Top 10 from our COMPASS Index:

The top five brands remain unchanged with Dior, Gucci, Louis Vuitton, Chanel, and Prada all successfully maintaining their lead as the top luxury brands in the Index.

From 5-10 there are some significant changes:

• Fendi rose five places helped in large part by its celebrity and influencer strategy revolving around its Peekaboo and Baguette bags
• Hermes is one of the top risers in the ranking, moving up an impressive 10 places. The brand released impressive Q1 growth numbers in its annual report, and the increase in attention for the typically quiet brand across social media, may lead to an even better performance in Q2.
• While it fell one place, Michael Kors still resonated with consumers with its strong focus on livestreaming through major festivals.
• Christian Louboutin fell three places, but its appearance in the top 10 is a testament to smaller brands effectively resonating in China. Their collaboration with TFBOYS Wang Zunkai helped to drive strong engagement from the bands' fanbase.
• Lastly, Saint Laurent rose 3 places, breaking back into the top 10 since its last appearance in Q4 2022. The brand has also been one of the top performers on TMall, driving significant attention with its Niki, Nolita and Le5A7 bags.?

Risers and Fallers

The top overall brands show us many of the brands we would expect to see given their size and reach. Looking at the brands that successful rose up the rankings (even from a lower position) and those that fell down, also lets us understand the dynamics of how the market is changing.

Risers

• Maison Kitsune tops our list, the brand has seen a strong resurgence, helped in part through a collaboration with one of the other members of the TFBOYS - Wang Yuan
• The sunglasses brand Gentle Monster is also a top riser, leveraging its activations with the ever-popular Cai Xukun during the quarter
• Bally was very active in promotion its 520 campaigns this year, leading to a rise in its engagement, however we did not see the same breakthrough in eCommerce performance, with a slight decline in YoY revenues for Q2 on TMall
• Ferragamo leveraged its relationship with Liu Yu to drive its rise in performance during the quarter
• Kate Spade has undergone somewhat of a transformation in the past year, relaunching with a new, vibrant green brand color, and leveraging its relationship with Luo Yizhou

Fallers

• Chloe saw a decrease of nearly 80% in its overall engagement on Weibo and a drastic drop in its engagement on Douyin moving from ~80,000 to less than 2,000
• A similar drop on Weibo from Moose Knuckles, however given the winter alignment in their product assortment, the seasonality shift is to be expected
• Roger Vivier is one of the largest fallers in Weibo engagement, moving from 1.3M during Q1 to just about 150k in Q2 - for the same number of posts. This is reflected in the brand netting over 30,000 new followers in Q1 and only 17,000 in Q2
• Giorgio Armani saw its biggest decline on Douyin - shared account with Emporio Armani - however the lack of UGC content about the brand, led to its overall decline in our Index
• Bottega Veneta is perhaps a victim of its reopening of social media accounts in our ranking this quarter, needing to rebuild its audience across channels. Expect the brand to rise in Q3

Brand Heat Index

We use a combination of search (WeChat, Weibo, and Baidu) and social media content engagement (WeChat, Weibo, XiaoHongShu and Douyin) for both Brand Generated and User Generated content, all for over 170 luxury brands in China to create our Brand Heat Index.

It measures brands that have caused a stir in the past month and a brief overview of how they drove interest and excitement from consumers. We show here the top 5 risers in brand heat for the month of June (vs. May).

1

On 15th June, Angelababy（杨颖）and Huang Jingyu（黄景瑜） were officially announced to be the brands spokesperson of Breitling on it’s official Weibo account. The post of Angelababy on the brand’s Weibo account on 15th June generated 1 million reposts, 76K likes, 11K comments. It is worth mentioning that Breitling obtained 20.3% and 45.7% followers on each Weibo and Xiaohongshu after the new brand’s spokesperson posts.?

2

Tiffany had remarkable responses on it’s official accounts by promoting “Tiffany T”. collection in June. A crowd of celebrities including GongJun (龚俊), MIKA (米卡) and Cai Xukun (蔡徐坤) were invited to endorse Tiffany T collections.

However, what really drove Tiffany a significant uplift of engagements was the announcement on 7th May that Tiffany & Co. announced Angelababy (杨颖) became T-collection’s Brand spokeperson on Weibo, Red and Douyin. Within just one day, Tiffany's official announcement post received impressive responses, especially Weibo garnering 1.2 million reposts, 533K likes, and 33K comments, and 68k new followers in a day, 69k in a month. Moreover, Tiffany’s xiaohongshu and Douyin both official accounts gained 6,631 and 15,864 followers in June.

3

On 27th June, Chopard announced that actor Bai Lu (白鹿) became the brand ambassador for collection Happy Diamonds. The official announcement post on Weibo generated over 1 million reposts, over 1.3 million likes and 12.5K comments. The brand also gained over 6,799 new followers in a month.

4

Following Kenzo Spring/Summer 2024 fashions shows in Paris, which was attended by the likes of Yang Yunqin (杨芸晴) and Santa (赞多) from INTO1 on Weibo, and launched its new collection video on Xiaohongshu and Douyin in the end of June.?

5

De Beers announced Zhao Liying（赵丽颖） as their new Brand spokesperson on June 24th. The announcement of new brand spokesperson posts on Weibo account generated over 1 million reposts, 1.6K likes, 3.6K comments.

Hot Products

This month we offer up a different category, Shoes. Access to our full category tracking is available through signing up to our email newsletter at our website:?www.rehub.tech

The top five most popular Shoes on TMall Flagship stores.

Balenciaga is the story of this month, with its 3XL sneakers taking two of the top 5 spots. Stuart Weitzman has had a quiet past year compared to its performance during FW 2021/22, but has reignited some interest through their new sandals.

1 - Balenciaga 3XL Men's

May Rank: NEW

2 – Maison Margiela Sneakers

May Rank: 2 -

3 – Tod's Kate Loafers

May Rank: 1?▼

4 – Balenciaga 3XL Women's

May?Rank: NEW

5 – Stuart Weitzman Sandals

May Rank: NEW

Our monthly newsletter - The Month in Luxury - is avaialble through our mailing list. In the full newsletter you will be able to access product rankings for more categories including Clothing, Watches & Jewelry and Bags

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www.rehub.tech