Daily Insights

Luxury Brands Double Down on China’s Emerging Social Platforms

By: Asa Mazor-Freedman | Oct 19, 2020

China has been a key driver of growth for luxury brands in recent years, and having virtually eliminated the COVID-19 pandemic within its borders, is one of the few economies projected to return to expansion in 2020. But as China’s importance for luxury brands has risen, so too has the bar for digital marketing efforts. To capture the attention of China’s young luxury consumers, brands are quickly embracing emerging social media platforms. 

Sixty percent of brands in Gartner’s upcoming Digital IQ Index: Luxury China 2020 operate an account on beauty and fashion-focused social channel RED, up from only 13% in 2019. Driven by user generated content, RED is central to boosting brand equity with its predominantly female user base, as well as launching new collections and supporting offline activations. Luxury brands are also investing in advertising on RED to drive traffic to brand commerce destinations. 

Forty-nine percent of brands have an official account on Douyin, China’s version of TikTok, up from 33% last year. Heavily reliant on celebrity and paid investment, brands are prioritizing Douyin as a component of large-scale branding campaigns. Both platforms offer robust influencer ecosystems to amplify brand messaging.  

LVMH’s third quarter results show that revenue in Asia (excluding Japan) was the only region with positive year on year growth, and that brands Dior and Louis Vuitton in particular were bright spots. The key to LVMH’s success in the China market has been significant investment in digital marketing: three of the top five tracked brands were LVMH properties, with flagship brand Louis Vuitton taking the top spot, Bulgari in third, and Dior climbing to fifth.

Dior was one of the first major luxury brands to establish an official presence on several of China’s emerging social media platforms. It launched on Douyin in August 2018, launched on RED in September 2019, and is currently the only major luxury brand to operate an account on Gen-Z-centric video platform Bilibili. Dior has amassed more than 700K followers on Douyin, second-most among tracked brands.

With 173K followers on RED, Louis Vuitton has the most of any studied brand. It was also among the first luxury brands to experiment with RED livestreaming functionality. Louis Vuitton prioritized Douyin for its high-budget Shanghai fashion show in August where screen ads directed Douyin users to a sponsored post on celebrity ambassador Kris Wu’s brand account. Louis Vuitton then livestreamed the show on Douyin as well as other social channels. The fashion show’s Douyin hashtag received more than 90 million views, the most on a fashion-related hashtag by an Index brand. 

As competitors’ investments raise consumer expectations, luxury marketing leaders need to proactively invest in emerging social media.