What Does The Ups And Downs Of China'S Retail Industry Mean For Luxury Brands?

Today, China's retail sales are growing in the online and mobile sectors. Driven by e-commerce platform leaders, such as Alibaba and Jingdong, as well as small red book, WeChat and many other social commerce platforms, consumers are accustomed to buying goods online, or even buying large luxury items.

The latest research by eMarketer, a market research firm, found that although China's overall retail sales will slow down in 2019 despite geopolitical and economic uncertainties, the momentum of online expansion will remain strong. Through purchasing data from various institutions (including third party research institutes, retailers, government and electric business enterprises), eMarketer predicts that China's retail electricity supplier sales will grow by about 27%, reaching 1 trillion and 940 billion US dollars in 2019, accounting for about 37% of the total retail sales. 80% of retail consumption will happen on mobile devices. The company expects retail mobile commerce sales to grow by 30% to $1 trillion and 560 billion.

The report also highlights two important retail trends in China, which may bring a disruptive change to the luxury fashion industry. One is the "new retail" campaign, led by technology giants Alibaba and Jingdong. With the latest technologies such as AR, VR and data analysis tools, these business companies claim to provide advanced retail solutions to radically transform the way luxury, fashion and beauty retailers serve customers. Recently, many first-class luxury brands are accepting this trend. For example, Prada group has established partnership with Jingdong and professional luxury electronics retailer Temple library. Burberry has been in Alibaba's Tmall market for more than five years. A handful of high-end beauty brands such as Estee Lauder, Lanc me, La Mer and Givenchy Beauty have benefited from Alibaba's retail solution to stimulate sales in China, while Chanel Beauty announced last week that it will launch official flagship store with Tmall.

However, many luxury brands are still worried about cooperation with China's electricity supplier companies. "When it comes to luxury electric business, although the main platform can generate a lot of traffic, some brands are hard to create unique experience for customers in terms of visibility. More and more brands want to maintain their autonomy, and to tell their brand story in a unique and real way, and interact with shoppers. EMarketer research analyst and Man-Chung Cheung, author of the report.

Another important retail trend in China is the integration of e-commerce and social media. This is good news for luxury goods and fashion industries traditionally focusing on content marketing. China's Instagram Xiaohong book has recently attracted Louis Weedon, while the Z generation's short video app has welcomed the Christian Dior, Moncler and Michael Kors brands.

Overall, despite the increasing number of luxury goods, online shopping will continue to grow. This shows the importance of luxury brands in developing effective digital retail and marketing related strategies. But according to eMarketer's Cheung, most purchases will continue in a downward line in the foreseeable future. "Therefore, the technology enhanced channel strategy is very important, especially in China. "