A report from Tencent and Boston Consulting Group, shows that WeChat helped boosting sales of the luxury sector in 2018. Let's see how user discovery journey online has impacted the growth of the luxury sector.

Luxury in China is growing by 6% per year.

This shopping spree for luxury items in China is just beginning. The study is showing an annual growth of 5-6% for the next five years, to reach €157-164 billions in 2025. China is already representing 33% of the global luxury consumption and will reach 41% by 2025.

This dynamic will continue as luxury consumers are young. 48% are below 30 years old and contribute 42% of the sales value. 

Today, 70% of Chinese luxury consumers are still mainly located in China Top 50 cities. 26% of them in the top 4 (Shanghai, Beijing, Guangzhou, Shenzhen) and 21% in the other Tier 1 cities.

WeChat is key in the the path to purchase

The path to purchase is done mainly on digital. It’s even more significant in the initial stages of the journey: 60% of the discovery and 69% of the research happening online.

Social media has a strongest influence for luxury shopper in the early stage. WeChat with its ecosystem influences 50% of the Chinese luxury shoppers. Right behind, Sina Weibo impacts 31% and RED 24% of them . They have the strongest impact during discovery and research stages.

KOL also have a strong influence on 70 % of luxury shoppers, specially for young audience below 30 years old.

WeChat: 80% of luxury purchase journey are ROPO « Research Online, Purchase Offline »

The purchase path is highly digitalized in China, with a proportion of ROPO being 30% higher than global average. It kept increasing of 20 % vs 2018. 

Luxury brands needs to keep in mind that digital marketing efforts in China have a direct impact on the sales overseas.

In term of luxury purchase from Chinese shoppers, offline sales still represent the large majority with only 12% happening online. Overseas offline & travel retail still the largest category with 43% after domestic offline with 32%.

Right after the purchase, digital get back to being a key element as after sales happen online for 66% of the consummers. 

However, digital should now be more and more present offline, with half the luxury consumers expecting digital features in offline stores like smart-fitting (43%) or VR/AR Experience (36%)

What are the best practices for luxury brands on WeChat ?

• Make Data-Driven decisions
• Improve your Social Media impact
• Omni-Channel: provide integrated and personalized experience across the customer journey

Data-Driven

1. Integrate business data across online and offline to better understand customer path to purchase
2. Integrate both local and international data with a global CRM approach to better understand and serve Chinese consumers buying overseas.
3. Monitor in real-time your media campaign with data analysis and A/B testing. Adjust your marketing spend based on real-time campaign results.

Social Media

1. Segment your social media audience and target each group with varied content based on audience interests and specificities
2. Review the performance of your media buying and KOL campaigns to build the best mix for your brand
3. Use social media across all consumers touch-points. It will help providing a great experience to customers far from your physical point of sales
4. Optimize your content creation to offer snackable content for an audience with short attention span. 

Omni-Channel

1. Differentiate content and experience on each touch points and platforms. Offer a customized customer journey to reduce loss of media impact
2. Offer a consistent brand image and experience across all touch points both online and offline.
3. Improve O2O (Online to Offline) to maximize the conversion rate in an inductry where ROPO represents 80% of customers journey.

Read the full report here in English. 

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