Start the weekend with a nibble!
Category
From 2012 to 2018, more than 50% of global luxury market revenue came from China. This has also led to the development of a vibrant market of second-hand luxury goods that is now worth over RMB 300 billion. That said, the vintage luxury market accounted for less than 1% of the total industry in 2018. Click for more…
INSIGHT & IMPLICATION: C2C second-hand eCommerce platforms like Xianyu (闲鱼) and Zhuanzhuan (转转) started springing up in late 2015. Today, they are industry leaders with millions of daily active users (DAUs). Vintage luxury is different from second-hand as most vintage goods are unique or at least rare and consumers pay for the personality and nostalgia that these products represent. Traditional luxury brands used to be defensive about vintage as it took one part of the market away from them but after seing the potential of this category, even Gucci and Prada launched partnerships with The RealReal (a second-hand trading platform for luxury goods) in 2018. In the age of the superfluid market, brands need to break existing stereotypes and work harder to find meaningful consumer and category insights. Keeping an open mind towards emerging business models and, if possible, integrating them into their current ecosystem to provide a better consumer experience can be one way to win. However, brands also need to be brave and question their own heritage and values in order to transform and ensure long term business growth and development.
Consumer
According to Tencent, in 2019 81.9% of white-collar workers commute use public transport in tier 1 cites while in tier 2 and 3, more than 60% of them use private cars or simply walk. On average, consumers in tier 1 cities spend more than 40 minutes commuting, while their lower tier counterparts spend only 29. Click for more…
INSIGHT & IMPLICATION:White collar workers have high consumption intention and spending power. However, because of geographic differences, they have different lifestyles and day-to-day behaviors. This does not refer only to the time they spend commuting, but also their life values and brand experience expectations. For example, according to a survey by Mintel, Uniqlo – a Japanese sportswear brand that is highly successful in upper tier markets – falls flat in the lower tier markets due to disappointed consumers who expect a more personalized shopping experience where staff can help them choose the right item. This is why businesses cannot simply export a brand experience approach that has proven successful in upper tier markets – they need to develop an approach that will specifically address the needs and values of consumers in lower tier markets in order to meaningfully connect with them.
Culture
Since 2012, more than 20 eCommerce and 50 social platforms targeting China’ssenior consumers have been founded, and this does not include over 700 startups specializing in services for that market. Click for more…
INSIGHT & IMPLICATION:The great potential of the ‘silver’ market is not just a theory anymore thanks to the increasingly strong spending power of China’s senior consumers. However, according to China’s top square dancing mobile app Tangdou, it is challenging to convince their users to pay more than 3 RMB for online dancing lessons which is a primary source of revenue for the platform, showing that brands need to invest significant effort to demonstrate their value to this consumer segment. That said, the Beijing statistics bureau revealed that senior citizens in China spend most of their money on food & beverage, healthcare and entertainment with travel accounting for more than 50% . It shows that the senior generation has a pragmatic attitude towards consumption and are still willing to pay for what they perceive as tangible value. This is a challenge for brands, but also an opportunity because brands who build a successful experience approach will be creating a significant long term source of business.
Media
According to technology media outlet 36Kr, Meituan currently has 400 million active users and 5.8 million merchants. On October 29th, it became the 10thplatform to launch a mini-program service in China. Click for more…
INSIGHT & IMPLICATION: Following WeChat, AliPay, Baidu and Jinri Toutiao, Meituan has finally joined in the mini program “battle”. While there little official information has been revealed so far, the platform currently hosts only Moji Weather and several gaming mini-programs. With more Internet platforms launching their own mini-program features, brands need to better understand how users behave within each platform. For example, in spite of its numerous features, AliPay is still seen primarily as a mobile payment platform by its users, which is why a coupon and loyalty mini-program would probably make sense for most brands. WeChat on the other hand is a multipurpose platform and pioneer of mini-programs, which is why the types of mini-programs can be more diverse and include product customisation, virtual gift cards, customer service, eCommerce and more. This is why brands should utilise a platform’s primary function to further enhance the experience, while ensuring they reach their own marketing and business objectives.
Have a great weekend!
