From Fickle To Faithful: Building Loyalty Among China’s Luxury Consumers

From Fickle To Faithful: Building Loyalty Among China’s Luxury Consumers

JUN 11, 2013


The spectacular rise of the Chinese luxury market has created unprecedented opportunity as well as, arguably, the greatest challenge for the world’s top luxury brands. Faced with an influx of logos and labels, China’s wealthier urban consumers have found themselves surrounded by flagships, inundated with ads, and spoiled with choices. Still at a relatively early stage of brand awareness, this consumer class has distinguished itself as legendarily fickle, shifting from brand to brand based on friends’ purchases, dictums from fashion magazines and blogs, the broader social landscape, and price.

In China, yesterday’s Louis Vuitton lover is today’s Céline supporter and tomorrow’s Balenciaga buff. 

Given the myriad challenges they face in a highly segmented and complex market — from spontaneous government crackdowns on conspicuous consumption to an embedded “showrooming” culture, to an inherently price-conscious consumer base with expectations of seemingly endless perks – the focus for major brands in China has progressed from tireless expansion efforts to converting China’s mercurial consumer into a dyed-in-the-wool, loyal shopper. Yet this is far easier said than done.

China’s more sophisticated luxury shopper now knows her importance to major luxury brands, and is shopping around for the one that best suits her status and personality. As such, sowing the seeds of loyalty has overtaken expansion efforts as the key concern of leading luxury players in China, and now it’s up to the brands to proactively court the consumer. So what canthey do more effectively to boost loyalty among China’s more seasoned and savvy shopper?

First, they need to understand these fundamental facts about the mainland China market: trust is everything, word of mouth is the best way to build that trust and drive sales, and regular, direct communication with the consumer is imperative. Leverage all digital channels to interact with the target consumer, from social media to email and newsletters, providing shareable, compelling content that speaks to their interests and drives positive word of mouth. Neglect this responsibility and you will be forgotten.

Second, service and perks are now not so much appreciated as expectedamong Chinese shoppers – regardless of where they may be. More than half of all luxury purchases by mainland Chinese consumers are made outside of the country, owing to high import taxes, greater prestige and choice abroad, and (perhaps most importantly for the most seasoned shoppers) better service. While it’s important to improve service standards among China-based staff, brands need to train employees globally to provide Chinese customers with a great experience. If they get that in New York, they’ll stick with your brand (and shop locally) when they get back to China.

Another way to drive long-term sales among Chinese consumers in general and VIPs in particular is by catering to their high expectations. Offer exclusive access to a handful of limited-edition products only available in China, offer private previews for top consumers in their own homes, give them access to designers, artists, and brand ambassadors. In addition to giving VIPs serious bragging rights, going the extra mile in terms of personalized service paves the way for diehard loyalty.

Beyond personal touches for VIPs, however, don’t neglect the importance of the digital landscape in fostering brand awareness, interest and loyalty among the middle class.  Don’t just translate your website and messaging into Chinese and expect consumers to fall in love with your brand – actually speak their language. Build and email your mailing list, interact on social media platforms like Weibo and WeChat, give consumers a chance to learn about your brand via in-store or pop-up exhibitions, and connect with China’s tens of millions of globe-trotting tourists.

Above all, see the emerging Chinese consumer less as a walking wallet and more of a long-term investment, a relationship that — when properly cultivated — will pay off many times over


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