The Month in Luxury - March 2023
In March it's time to forget about Fashion Weeks and instead focus on Watches and Wanders. With Chinese celebrities able to act as brand ambassadors in person on location in Geneva after a 3 year hiatus, it brings the watch category to the forefront of the conversation.
As we moved into Q2, luxury brands in China are steadily showing positive signs of recovery, and decision-makers are cautiously optimistic about the outlook for FY2023. Recovery of consumer confidence and the potential impact of international travel will play an important role in driving luxury consumption in China.
Enjoy the March edition of our newsletter and do not hesitate to reach out if you are interested in obtaining more insights about luxury brands' performance across the Chinese digital ecosystem.
Max Peiro
Feature Commentary
Thoughts on the development of the Chinese Grey Market
Thomas Piachaud - our Head of Strategy brings a framework to outline the changes to the Grey Market in China since 2020.
How many shades of Grey are there in the Chinese luxury grey market?
Certainly, more than 50.
I think many people when they think about the grey market in China have the old image of what it used to look like. A badly taken product photo, with confusing product information, potentially a discount that is just too good to pass up, but with a high chance of a non-authentic product.
This grey market is still there, but over the last years, things have changed.
So what are the trends that have changed how consumers interact with the grey market, and who doesn’t love a three P framework?:
?? Professionalization – If you were a Daigou in 2019, moving products around was comparatively easy. After the imposed travel restrictions you moved into a sink or swim world. You needed to up your logistics game or look somewhere else for your money. The result? A consolidated market, with higher degrees of professionalization – less noise, more experience.
?? Platformization – Companies in China have realized the potential for making a margin on product price differences, thus spawning platforms like DeWu – a platform that compared to some brand flagships on eCommerce has a much better experience, and compared to setting up your own Taobao store, helps you drive much more traffic, and for the end consumer, builds trust and security through authentication. Younger audiences may not be willing to take the risk to buy from a Daigou’s Taobao store, but you can bet they’d buy from DeWu.
?? Privatization – What we can see is merely the tip of the iceberg. The biggest potential grey market platform is WeChat, but its probably the darkest shade of grey in that we will likely never know how much product is actually moving around there. Think of Taobao, Douyin, XHS eCommerce as a marketing platform to recruit people into your CRM – WeChat. WeChat Daigou’s can offer me a tailored selection of goods, a speedy response to my questions and if I’m a really good customer, personalized shopping trips with a one-to-one livestream from the Paris flagship store.
The biggest issue these three trends create for brands - you no longer completely control your brand experience.
Maybe its not a big deal today, tomorrow, or even next year – but the long-term outlook is bleak for brands that do not reestablish control – your VIC’s of tomorrow may experience your brand completely outside of your commerce control.
We recently released our white paper - DeWu:?The Crossroads of Chinese GenZ?and Luxury Brands - which goes into depth about the emergence of the DeWu platform and selected luxury brands' performance on the platform.
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 March (vs. February).
1
Watches & Wonders 2023 hosted 48 brands, among which Hublot garnered significant attention across social media platforms in China. The presence of the brand's ambassador, Yixing Zhang (张艺兴), at the exhibition held in Geneva undoubtedly contributed to the buzz. Hublot's official account received an overwhelming response, with a substantial increase of 23,000 new followers in a single day, on the 29th of March.
The new launches during Watches and Wonders also caught the attention of consumers with the MP-13 Tourbillon (left) and Bang Square?Crystal (right)?gathering engagement.
2
=Bvlgari announced Yifei Liu as their new global spokesperson on March 23rd. The news generated over 1 million reposts on Weibo by the end of the month. To celebrate the 75th anniversary of their Serpenti collection, Bvlgari hosted an exhibition in Shanghai where Yifei Liu and other celebrities, including Yang Yang (杨洋) and Chengcheng Fan (范丞丞), endorsed the brand and the collection.
3
Brand ambassador Yi Cheng (成毅) contributed to Lanvin's increased visibility last month by attending the brand's 2023 FW Paris Fashion Week Runway Show. Yi Cheng's endorsement was further amplified when he was featured wearing Lanvin's 2023 SS items in the fashion magazine, Glass Man.
4
Bottega Veneta hosted their 2023 FW Runway Show in March, while their 2023 SS collection was endorsed by celebrities and featured in fashion magazines. Mika (米卡) from INTO1 even visited the brand's Chengdu IFS boutique.
The brand also generates a special mention this month as it relaunched both its?Weibo and XHS official accounts from a long absense from the platforms in somewhat of a turnaround for the brand.
5
At the 2023 Weibo Awards Ceremony, Yu Liu (刘宇) from INTO1 wore Girard Perregaux's Laureato Green?Ceramic Aston Martin Edition, driving 217K reposts on Weibo - the watch was unveiled at Watches and Wonders in Geneva this week generating the first placement of the brand in our brand heat.
Hot Products
The top five most popular Bags priced?(at full price, discounts may apply) over 10,000 RMB on TMall Flagship stores from over 120 luxury brands.
Gucci continue their resurgence with their two key collections Marmont and Horsebit. Lanvin make a surge up to the second position reflecting their place in the brand heat this month.
1 - Gucci GG Marmont Mini
February Rank: 1 -
2 - Lanvin 155 Pencil Box
February Rank: 50+
3 - Saint Laurent Niki Medium (Black)
February Rank: 2 ▼
4 - Gucci Horsebit 1955 Shoulder Bag
February Rank: 4 -
5 - Saint Laurent Niki Mini (Black)
February Rank: 3?▼
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