Luxury Brands Want to Talk to Young People in China. Do They Have Any Other Options?

Luxury brands are still embracing WeChat enthusiastically. But the world may change again before they notice.

"This Valentine's Day, this is the bag to give her."

At 10 a.m. on February 3, the fashion blogger Mr. Bag published a new post on the WeChat official account that carries his name. His usual subjects are bag reviews, bag recommendations, and photos of readers showing off their bags. This one was a paid promotion for a luxury brand. "A special edition for bag lovers, launched jointly by Mr. Bag and Givenchy — the Valentine's Day limited-edition Givenchy Horizon. Only 80 worldwide."

At the bottom of the post, the "Read the original" link led straight to the "online reservation" page on Givenchy's WeChat account. Fill in your name, phone number, ID number, and the store where you wanted to collect the bag, pay 14,900 yuan through WeChat Pay, and you had completed a Valentine's Day purchase that was both luxurious and convenient. By Mr. Bag's own account on Weibo, all 80 bags were gone in 12 minutes. According to Baidu Index, searches for Givenchy hit a small peak the day after the post went out: 11,826 of them.

The WeChat interface for the Mr. Bag and Givenchy collaboration

The same thing happened again on February 7. This time it was Freshboy, a fashion blogger known for styling advice, who posted at 10:07 p.m. under the headline "Valentine's Day | The Most-Searched Token of Love Turns Out Not to Be a Ring." The promotion at the end worked the same way, with the link pointing to the partner brand's WeChat account — except the brand was Cartier and the product was a bracelet priced at 30,600 yuan.

"A limited run of 150 rose-gold Love bracelets, not sold in any store in the country for now — the only place to get one is WeChat. The first 88 people who order on WeChat before Valentine's Day and leave an address will have theirs hand-delivered by a Cartier boy."

The interface for the Freshboy and Cartier collaboration

Valentine's Day marketing by luxury brands on WeChat started drawing attention about two years ago. In February 2015, Dior hired the Dutch photographer and film director Anton Corbijn to shoot an ad film starring Natalie Portman on the theme of running from a wedding, and placed it in WeChat Moments (with no Chinese adaptation at all).

Last year, for Qixi, the Chinese Valentine's Day, Dior and Bulgari each sold a limited edition on their own WeChat accounts — a Lady Dior bag and a "Diva's Dream" jewelry set — while the French jewelry and watch brand Chaumet ran an H5 ad called "Empress Joséphine's Moments."

This year, the change worth watching is that luxury brands and Chinese fashion bloggers have moved much closer together.

Why WeChat Is the One Place Luxury Brands in China Must Win

This is not only a Chinese story. Across the global fashion business, influencers — or KOLs, to use the Chinese term — keep gaining ground. They have pushed fashion magazine editors out of the front row at runway shows and become runway models, hosts of livestreamed show broadcasts, even brand ambassadors, taking the influence and the advertising money that once went to traditional fashion media. The clearest example: last April, the Asian-American blogger Aimee Song, who has 3.4 million Instagram followers, became a brand ambassador for the beauty label Laura Mercier for a reported $500,000.

On January 11 this year, the luxury division of BNP Paribas put out a report called "The Shopping Guide: Bloggers in China," meant to "help brands see the difference between Chinese and foreign bloggers, and recognize that the Chinese and Western markets are in fact very different." It contained three rankings: top Chinese celebrities, Chinese fashion bloggers, and beauty bloggers. The fashion blogger list was gogoboi, Dipsy, Mr. Bag, Rebecca's Wonderland, Mr. Jiliang, Style_Notes, FreshBoy, Fake Teenager Mr. K, VintageMuse, and Shiliupo.

You have probably noticed already: Mr. Bag and Freshboy, the two bloggers above, sit third and seventh on that list.

"Finding people isn't the problem these days. The problem is giving them a reason to come find you. Besides, luxury brands all have very professional marketing and PR teams, and a contact list of the bloggers most worth working with stopped being a trade secret a long time ago." That is how Freshboy answered when QDaily asked where his collaborations come from.

"Being professional means being precise," says Mark, founder of the fashion PR firm EFC. Mark has six years in the industry and started his own company at the beginning of 2016. From last March, his firm began fielding a flood of inquiries from international luxury brands, including Moschino, Prada, Furla, and Dsquared². They all arrived with the same question: how to deal with consumers more professionally and more precisely without damaging the brand's image.

For many luxury brands, precision matters more than anything, and WeChat's closed system is seen as the right place for it. "Luxury brands have always emphasized control over their brand, and outside of WeChat it's hard to find a more private platform," Danielle Bailey, research director at L2, told Luxury Daily.

Rebecca opened her WeChat account, Rebecca's Wonderland, in October 2014. In March 2015 she accepted an invitation from Chanel to attend Paris Fashion Week, and has since worked with Chanel, Dior, Burberry, Tiffany, Guerlain, YSL, Gucci, Cartier, Hermès, and Louis Vuitton, among others. Her impression is that from the second half of 2015, luxury brands started paying far more attention to WeChat official accounts.

"Compared with other brands, luxury brands care much more about the precision of a placement. The audience has to be a much closer match for the brand." That is why most of the offers Rebecca gets are for WeChat, with Weibo, Toutiao, or Taobao Toutiao a distant second.

Asked what a closer match means, Rebecca's agent Tristan told QDaily: "Rebecca has a large base of shopping fans. They follow her because they trust her taste and her choices, and they buy what she buys. Her audience also skews mid-to-upper income, and that conversion rate is exactly what luxury brands like."

Freshboy, who worked with Cartier on this Valentine's Day campaign, thinks luxury brands want precision even more than they want traffic. He told QDaily: "Especially for luxury brands with a longer history and deeper heritage, what counts more than traffic is whether the content itself is good — whether it can convey the brand's message precisely to the target audience in a context that suits the brand, and bring back the kind of results the brand expected. Against sky-high numbers and endless screen-flooding, the more top-tier a luxury brand is, the more it puts tailor-made, precise, effective content first."

More interesting still: one big reason luxury brands want precision is that they are trying out WeChat's shopping features.

So far the brands selling online through WeChat include Richemont's Cartier, IWC, and Montblanc; LVMH's Dior and Bulgari; and Burberry and Chanel. Last September, LVMH's high-end cosmetics brands Guerlain and Make Up For Ever moved onto Tmall, and Hermès's lifestyle brand Shang Xia and LVMH's luxury watch brand TAG Heuer have both recently said they will join them.

"Because the WeChat ecosystem connects content to payment seamlessly, I've clearly felt that since we entered the WeChat era, more and more luxury brands over the past year have wanted good content on their WeChat accounts to drive online sales directly. It's the same logic as the 'see now, buy now' online channels many luxury brands have opened right after their runway shows over the past two years. What makes read-it-then-buy-it possible is mainly the pairing of e-commerce and content online," Freshboy said.

Rebecca agrees. Among the brands that come to her, she told QDaily, "some want to convey their brand culture and spirit, but a large group is simply driving traffic — to their WeChat account, their app, their stores, or straight to a product for sale."

According to L2's figures in China WeChat 2016, 92% of fashion brands are now on WeChat. Between 2014 and 2016, the share of brands on the platform grew by 29% in beauty, 41% in personal care, 35% in watches and jewelry, and 48% in fashion.

Nobody brings up last September's WeChat official account view-count inflation scandal. Newrank counted more than 7,000 major WeChat accounts the night it broke: measured against their daily average over the previous week, at least 60% saw per-article read counts fall, and 124 of them dropped by more than 80%.

Luxury brands are still embracing WeChat enthusiastically, and nobody brings up the other thing either — that the easy traffic on WeChat official accounts is running out. According to iiMedia Research, China had more than 12 million WeChat official accounts in 2016, up 46.2% from 2015, and the number is projected to reach 14.15 million in 2017, with growth slowing to 17%. Some 65.2% of internet users said they had unsubscribed from an account because it published too little, and another 57.9% because it updated too rarely.

Which raises a question: is this intense focus on a single platform really about precision, or is it because there is nothing else to choose?

In Just Three Years, China's Market Stopped Being What It Was

Luxury brands began taking the Chinese market seriously seven years ago. A Bain & Company report published last year called the period from 2010 to 2014 "Chinese Bulimia." Without Chinese tourists during those years, the global market for personal luxury goods — hit by economic slowdown, terrorist attacks, and political instability — would have shrunk rather than grown 2%.

But the people behind that explosive growth were not only the property and internet newly rich created by fast economic growth. Mixed in with them was a gray zone of easy money: purchases made on the public purse.

Then the 2012 anti-corruption campaign, and everything that followed it, forced the market to change fast. From 2015, luxury brands narrowed the price gap between China and overseas; new tariff rules introduced from 2016 also warmed up spending inside the country. What replaced the gray market was a new generation of homegrown middle-class buyers: younger, keener on value for money and on personalization, insistent on a quick and convenient purchase, and at home in a digital environment for both goods and information.

At the same time, luxury brands were adjusting both their physical sales channels and their communication channels in China. They used to rely on opening more stores to push sales. After a bubble-like expansion alongside Chinese commercial real estate, they changed course two years ago, slowing store openings or closing smaller stores and putting the weight on larger flagships. The Fortune Character Institute found that 83% of luxury brands in China closed stores in some form in 2015. In 2016, 17 luxury brands including LV, Gucci, Dior, and Hermès closed 15 stores between them.

Meanwhile the maturing of social platforms — Weibo, WeChat, Zhihu — changed how people consume fashion information, moving the points of contact with luxury from offline to online. Traditional media is fading: late last year Femina, an eight-year-old monthly for women, stopped publishing, and ELLE China, another fashion magazine under Hearst Media Advertising Group (China), went from twice a month back to monthly.

All of this took place in two or three years, which is more than enough to leave most luxury companies dizzy.

Around the World, How Do Luxury Brands Talk to Young People?

These challenges — a new generation of consumers, shifting channels for buying goods and for getting information — exist in every market, of course. But whether the aim is to attract young people or to try out e-commerce, the routes open to brands elsewhere look far more varied.

In day-to-day marketing alone, a luxury brand can choose photo apps such as Instagram, Pinterest, and Snapchat; video sites such as YouTube; social platforms such as Facebook and Twitter; and short-blogging platforms such as Tumblr.

Take Snapchat, which has just filed its IPO prospectus. The app, built around photos that delete themselves after you look at them, has 161 million daily active users, 60% of them young people aged 13 to 24. Luxury brands are therefore readier to try light, of-the-moment content there.

Last July, Tiffany sponsored a Snapchat filter labeled "Return to Tiffany Love" to promote its entry-level classic jewelry line. Gucci ran a campaign called #24HourAce, inviting more than a dozen artists from different countries and backgrounds to take turns running the brand's official account and share videos and stories they made around the Gucci Ace sneaker. Burberry used the platform to "leak" preparations from backstage at its shows.

Instagram, Facebook, and others also pushed out a batch of new advertising products fast last year, and fashion brands were usually among the first to try them. In November, Instagram opened in-app shopping to 20 brands; Abercrombie & Fitch, Warby Parker, and Kate Spade were among the first to sign. Facebook launched an app called Shop Visits, which tracks whether people who see a brand's ad on Facebook go on to visit its stores. That same month Michael Kors went to Facebook and published a joint study with it, telling the world that sales per store had risen.

Because the platforms are varied and the new products come quickly, luxury brands abroad work with bloggers on social media but also make more of their own content, and better content. Their own follower counts on these platforms are no smaller than a top blogger's. On WeChat and Weibo in China, the gap between a luxury brand's followers and a blogger's is far wider, which leaves brands leaning harder on bloggers for traffic and for getting their message out.

Beyond marketing platforms, luxury brands elsewhere can also chase exposure and traffic through more inventive content partnerships, without necessarily going through bloggers. LV brought in Supreme and launched a "Friends and Heroes" collaboration at Paris Men's Fashion Week, taking LV's classic products and stamping them with Supreme's signature Box Logo — adding a fashionable streetwear element and moving fans between the two brands at the same time. Gucci's work with the graffiti artist Gucci Ghost, running from store design to product lines, did the same.

In China, brands and people with that kind of influence and sensibility are still rare.

In China, Luxury E-Commerce Is Missing

Look back at why shopping on WeChat became a marketing priority and the reason is similar: luxury brands still have not found an e-commerce platform in China that satisfies them.

Net-a-Porter, Farfetch, and the rest still make their money mainly in North America and Europe. Net-a-Porter's 2015 annual report shows Asia-Pacific accounting for just 14.6% of revenue that year. The first wave of Chinese luxury e-commerce sites, Vipshop and Shangpin.com, still run mostly on flash sales and are positioned as places to clear inventory, which does not meet the need to sell in-season luxury goods online. Tmall, the largest of them, is more like a huge shopping mall where brands of very different character crowd in to fight for traffic — a poor fit for the customer loyalty that luxury brands insist on.

Judging by the "limited edition" and "made-to-order" products in these Valentine's Day campaigns, luxury brands probably do not yet treat WeChat seriously as an e-commerce platform. They are using it to test whether a multi-channel strategy of pulling people from online to offline works. It recalls last year, when Gucci and Prada put capsule collections and accessories on Yoox Net-a-Porter. Those also sold out quickly, but the exercise was still more promotion than sales.

On an analyst call last October, LVMH CFO Jean-Jacques Guiony said that for the group, "e-commerce is not a big opportunity, but we do acknowledge the role online channels play before a customer walks into a store to buy. So the group will work on finding the opening between the website and the physical store."

Li Xue, who is from Beijing, may be exactly the consumer Jean-Jacques Guiony has in mind. She is in her forties, runs a property investment company, makes tens of millions of yuan a year, and is a longtime VIP at Beijing SKP. When we met her at a newly opened Gucci flagship, she was wearing the brand's sneakers and carrying its backpack, and described herself as a loyal fan who has been buying it since Tom Ford was still in charge more than a decade ago.

Most of what she learns about brands, she told us, comes from sales staff and from WeChat. "Out of 24 hours in a day, I spend eight or nine of them on WeChat." At first she disliked seeing luxury brands advertise in Moments, because "it still gets into your privacy — if I hit like, other people can see it." Now she has come round to it: "I'm busy with work, and WeChat is the only thing I have time to look at."

When it comes to buying, though, she trusts only physical stores. "You have to experience this sort of thing yourself. Whatever gets sold online is definitely not as good as what's in the store, and who knows whether it's fake. A platform like Tmall is too low-end; I wouldn't touch it."

A BCG report says much the same: 80% of luxury consumers want to deal with brands across every channel, but for them buying online is not a replacement for the store — it means a seamless experience at every point of contact. Of those shoppers, 31% want delivery that joins up online and offline, 24% want the same recommendations and loyalty benefits across channels, and they want a consistent brand image too.

At bottom, WeChat is unlikely to be much of an e-commerce platform either. Its core function is still social. It is a closed system strung together by Moments and shared interests, and it lacks the openness and the public quality that advertisers like about Instagram and Facebook.

People Want Fashion Bloggers, But the Business Needs Credibility

Chinese fashion bloggers started a little later than their European and American counterparts, with the first group appearing around 2010. Doris Ke, who spent two years as a new-media manager at Michael Kors in New York, made this argument in a 2015 piece called "A Comparative Report on Chinese and American Influencers": "Both are image-led, both understand content and technique, but American bloggers are leading trends and doing original work, while Chinese bloggers are still recombining and importing. Chinese audiences are still learning. For styling and fashion to really take root in China, people first have to get rich enough to start playing with clothes."

Judging by how specialized fashion bloggers have become, and by their rates, an advertising hierarchy much like the one in established media is taking shape. Mr. Bag, above, writes only about handbags; Freshboy and Rebecca are known for styling; Nirokita draws attention for analyzing fashion theory and the history and culture of brands. Prices have stratified here as they have abroad. Mark's figures: top-tier bloggers raise their rates once a quarter, by 10,000 to 20,000 yuan or more; second-tier bloggers adjust about every six months, by 5,000 to 10,000 yuan; third-tier bloggers may change theirs only once a year.

The kinds of work once reserved for traditional fashion magazines are also turning up with bloggers. The freelance writer Nirokita has run a WeChat account under her own name since 2014, devoted to in-depth pieces on fashion and culture; she has worked with Gucci, Prada, and Saint Laurent, and wrote the copy for a Chanel online ad film in late 2016. The past two years of work between luxury brands and KOLs, she says, have brought finer-grained arrangements, deeper content, and more creative freedom.

"At first, seeing a big brand's name sitting stiffly in a Weibo timeline next to a gold-plated ad image felt awkward to everyone. As they collected more feedback, luxury brands started making their placements finer and finer. Work with bloggers now includes commissioned writing, exclusive appearances, even joint products with exclusive launches — genuinely taking Chinese social networks and their particular traits into their own systems."

Rebecca said something similar in her interview. "From last year to this year, in how bloggers work with brands — speaking for myself, beyond the usual text-and-image promotions, regular show attendance, and product launches, we now go backstage at shows or into the workshops for more personal exchanges with a brand's creative director, and shoot stills for a brand's flagship collection or a single product. Guerlain once invited me to Paris to shoot a promotional film at its headquarters. The forms keep multiplying."

But working with fashion bloggers is a single channel, and a single channel is hard pressed to sustain a fashion brand's healthy growth for long.

For one thing, a star blogger's fans do not necessarily become a brand's fans. For another, as we argued in our 2016 year-end piece, more and more people are pouring into fashion blogging, standards of professionalism are uneven, and commercialization keeps deepening. Given the pull of profit, it is hard to say whether this content can keep its independence and its critical edge. Set against big fashion media groups, bloggers, as individuals, may in fact be more fragile. They have become models, editors, designers, and brand spokespeople.

To quote the fashion critic Robin Givhan, in New York magazine: "In fashion, the once-shining disruptors keep moving closer to the vested interests. The distance between them was never that great, because this is how the fashion industry has always worked — it devours what it loves and what it chases."

Freshboy agrees. Over these six or seven years, he thinks the biggest change has been in who gets to speak.

"From FreshBoy to SOFRESHTOWEAR, I've lived through three eras of new media — blogs, Weibo, WeChat — and watched the power to speak pass step by step from a few hands into many. But what I really want to say is that in the internet age, holding that power doesn't only mean more traffic and the greater commercial value that follows. It also means whoever holds it has to watch their words and their actions much more carefully."

However the marketing strategies and the environment change, what really persuades a consumer to keep buying is still the product.

"Consumers like us don't change our loyalty because of who Gucci picks as a spokesperson. Whether we're loyal to a brand comes down to quality, style, and level. Get those three right and I'll buy," Li Xue told us. "Look, these white sneakers are nice. I didn't have them made to order, but I bought one pair of every style in the collection."

She stretched out a foot, showing the roaring tiger head and the gleaming studs on her Gucci Ace sneakers.

Header and body images from theluxonomist.es