Luxury Brands Double Down on Content for Chinese Audiences
Plus: Longer short video, Starbucks goes the content-commerce route, and the CCI Report Corner.
The past week has seen the release of financial reports from luxury brands showing unprecedented declines in revenues as a result of the coronavirus pandemic, with big names such as Burberry and Richemont reporting decreases in sales approaching 50%.
And yet China remains a bright spot for brands amid the global gloom, with double-digit sales growth reflecting consumer confidence in the country’s post-coronavirus era and the fact that almost all spending must take place locally due to ongoing international travel restrictions.
As luxury brands double down on the Chinese market, they are investing more heavily in local content-driven campaigns. These marketing initiatives seek to appeal to consumers with combinations of entertainment and culture that can boost brand awareness, create positive associations between luxury and society, and ultimately drive sales.
Hitting high notes with musical collaborations:
On July 11, Loewe and indie record label Modern Sky jointly hosted an offline and online concert to promote the latest collection for Paula’s Ibiza, the Spanish luxury house’s seasonal second line. The “Club Paula’s” event featured Modern Sky artists and former “Rap of China” (中国新说唱) contestants Vinida, Li Daben, OB03, and Tizzy T performing in Shanghai. While clearly promotional and aimed towards getting at least some of the Gen Z viewers or concert attendees to ultimately purchase products from Loewe and Paula’s Ibiza, the event succeeded in building an aura of coolness and exclusivity by requiring viewers to reserve their spots in specially created WeChat mini-program to watch the performances by popular — yet by no means superstar — young rappers, thus benefiting from the it-factor of both Modern Sky and “Rap of China.” Outfitting the performers in colorful Paula’s Ibiza outfits while projecting the Loewe logo onto the backdrop, the brand managed to embed both brands in the minds of the audience in attendance and watching at home. Read more on Content Commerce Insider.
Italian luxury brand Fendi recently partnered with the Poly Performance group in Shanghai to host classical music events in conjunction with the global Fendi Renaissance - Anima Mundi campaign. Taking Fendi’s hometown of Rome as its inspiration, the series used music as a link between the humanities and the arts, with the goal of using art to help heal the stresses of the pandemic while conveying optimism to the public. A mix of Italian and Chinese compositions was performed by singer Jia Fan, pianist Shen Zeyu, and violinist Yang Han, among others, and the show was livestreamed via Fendi’s Chinese website, its official WeChat account, and QQ Music.
Leveling up luxury through gaming:
To mark the second anniversary of Tencent’s popular kart-racing QQ Speed Mobile game, Rolls-Royce debuted its first virtual cars, a Dawn model and a futuristic 2035 edition QEX, with racing features and special skins to enhance the player experience. Rolls-Royce also offered a collection of virtual gifts and coupons for players who logged in to play starting July 11.
Burberry launched its “B Surf” game in a WeChat version in China as part of a campaign to promote the Burberry TB (Thomas Burberry) classic summer collection. With surfing as the main theme, players can customize their avatar, surfboard, and an exclusive selection of virtual TB summer outfits. The game encourages users to interact with other players by competing on a TB-shaped track to collect TB logos along the way, with appealing prizes for the top 100 players such as a logo bucket hat and a surfboard.
“B Surf” follows the release of Burberry’s first game, “B Bounce,” in October 2019 and a special Chinese adaptation, “Ratberry,” that was created for the Lunar New Year in January. According to player feedback, the interactive design and other features have been much improved since then, and multiple products have sold out through the game since its debut on July 13.
New frontiers in fashion shows:
With uncertainty surrounding travel as a result of the coronavirus, global luxury brands are looking for creative alternatives to present their upcoming collections. Louis Vuitton is reimagining the traditional concept of fashion shows for its Spring 2021 men’s line, which was launched via an animated film directed by Virgil Abloh, followed by a touring live runway show. Shanghai has been set as the first stop, on August 6, and will be followed by an event in Tokyo at a later date.
Adapting the hottest trend in Chinese digital commerce for a global audience, Gucci creative director Alessandro Michele turned to livestreaming, presenting his Epilogue collection as a visual narrative feature during a 12-hour event broadcast globally across various online platforms. In China, the event was shared via Weibo, drawing an audience of more than 16 million.
After successfully debuting its Autumn/Winter 2020 couture collection via a brand film and celebrity livestream on Weibo that garnered more than 11 million viewers, Dior introduced its Summer 2021 men’s collection to Chinese consumers in a similar fashion, releasing a brand film followed by a live broadcast with local brand ambassadors and fashion influencers on Weibo that drew an even larger audience of more than 12 million.
LVMH-owned Dior has a busy summer ahead in China. Later this month, the French fashion house will open the third edition of its couture-packed fashion retrospective “Christian Dior: Designer of Dreams” at Shanghai’s Long Museum West Bund, and it is expected to be more than twice as large as the brand’s last exhibition in London. Dior has also been named as an official partner and designated cosmetics and perfume brand for the upcoming Shanghai International Film Festival, the first major movie event to be held in China this year. This represents a strong comeback for the brand following its last-minute removal as a sponsor of the Golden Rooster and Hundred Flowers Film Festival in November 2019 as the result of a map controversy involving Taiwan.
Mentioned in today’s newsletter: Burberry, Bytedance, Dior, Douyin, Fendi, Gucci, Kuaishou, Lavazza, Loewe, Louis Vuitton, Luckin Coffee, LVMH, Modern Sky, QQ Music, Richemont, Rolls-Royce, Starbucks, Tim Hortons.
China’s Short Video Platforms Compete to Go Longer
In addition to competing on the music front (as reported earlier this week by CCI), China’s leading short video apps Douyin and Kuaishou have been expanding into longer-form entertainment content that goes beyond the standard 15-second clip.
Both have experimented with full-length feature films — Douyin was among the several Bytedance-owned platforms that made streaming video history when they debuted the hotly anticipated theatrical release “Lost in Russia” (囧妈) right after cinemas were closed in the early days of the pandemic, while Kuaishou picked up the indie film “The Empty Nest” (空巢) for distribution in May.
But it is the middle ground of shorter dramatic content that is drawing more attention from the competing apps, paving the way for potential sponsorship opportunities or new forms of branded content.
By the end of 2020, Kuaishou plans to develop more than 200 original content “skits,” and has set aside RMB 10 billion for this investment. The firm is reportedly engaged in negotiations with more than 1,000 production companies as it seeks to license more original content. The company has opened an official “Kuaishou Little Theater” (快后小剧场) account that aggregates original skits tagged by users from across the platform and currently has more than 6 million followers, which helps the featured content draw a broader audience. Since its launch in April 2019, the Kuaishou Little Theater has featured nearly 600,000 videos and drawn more than 6 million followers. The account also highlights content from Kuaishou investor Tencent’s own short video app, Tencent Weishi.
Douyin has also launched a plan to increase exposure for high-quality original content with a contest: The top five finalists will receive RMB 10,000 worth of Dou+ reward points and another five will earn RMB 5,000 in points. Dou+ points are used by Douyin creators to help them promote their content via the app’s algorithms, improving the likelihood of appearing on other users’ feeds.
The longer-form content sought out by audiences falls into two categories. One is the skit-type series in which each episode stands on its own in terms of plot, and these often combine inspirational content with humor and a punchline at the end, such as “Amazing Museum” (奇妙博物馆) which offers life lessons with a twist of magical realism. The other is serial content with a continuous storyline across multiple episodes, such as “Psychic Princess Tong Lingfei” (通灵妃) which is based on animation IP and was first released via Tencent Weishi. Now also available on Kuaishou Little Theater, it has become popular enough to launch a second season earlier this month.
- by Ginger Ooi, CCI Team
Brand Film Pick: Starbucks Shares the Power of Coffee
Persuading Chinese consumers to drink more coffee has been a challenge for Western brands that see untapped potential in the market’s low intake: per capita consumption is just 5.4 cups per year, compared with 341 in the United States and 591 in Europe, according to Euromonitor International.
Starbucks, with two decades in the China market and more than 4,400 stores (and counting), has been the envy of both local competitors such as the recently disgraced Luckin and global hopefuls, including Canada’s Tim Hortons and Lavazza of Italy. The American coffee chain’s partnership with Alibaba, which extends to mobile payments and delivery, offers a seamless purchasing experience for consumers.
But to persuade more Chinese to consider a shift from tea — the preferred form of caffeine — to coffee requires greater emphasis on the product and its unique characteristics. Last month, Starbucks began offering Rwanda Abakundakawa coffee at all of its Chinese Reserve locations, where the high-quality coffee bean is used to develop uniquely flavored roasts. However, as the recent short documentary, “The Story of Rwanda Coffee” (卢旺达咖啡故事) tells it, it is not just the bean, but also the story that makes the product so special.
The documentary follows Anita Mo, a Starbucks coffee roaster from China, on a visit to Abakundakawa Cooperative, located on the volcanic slopes of Rwanda’s mountainous Gakenke district. In 1994, this beautiful land and its people suffered through a 100-day genocide of the Tutsi ethnic group by Hutu radicals, leaving a majority of Rwandan men either dead or imprisoned for war crimes. Today, many of cooperative’s 2,000 members, including its leadership, are women, something of an anomaly in the coffee world.
The film features moving testimony from several workers about the genocide: Some women lost their entire families or were badly beaten, while others’ husbands were perpetrators and were later imprisoned. Despite a history of conflict, the women at Abakundakawa Cooperative have endeavored to reconcile their country, and working together to grow coffee is one way to achieve this goal.
In this new era of consumerism, value is no longer limited to the product itself, but extends to an understanding of the history and culture associated with the product. Traceability has become an important marketing tool, as it feeds the consumers’ curiosity and builds a stronger brand image. In "Rwanda Coffee Story,” Starbucks not only focuses on the coffee bean's place of origin, but also tells the story of those who harvest the crop. Starbucks embraces Abakundakawa coffee as a symbol of female power and further incorporates this value into the motto, "Be strong like coffee."
Ultimately, the documentary transforms the consumer experience, making coffee as much a product of the people who harvested the beans, as the beans themselves. Through sharing the enjoyment of exceptional coffee, Starbucks’ consumers can empathize with the dreams of the Rwandan women and their hopes for better lives.
- by Ben Guggenheim, CCI Team
Report Corner
A study of Douyin’s 100 top-performing e-commerce campaigns from WalktheChat shows that Tmall dominates as a sales platform, although Vipshop and JD.com perform better in terms of generating gross merchandise volume for each campaign.
China’s beauty consumers plan to spend far more online and less in stores, according to the “2020 China Premium Beauty Report” produced by Ruder Finn and Consumer Search Group: 49% of those surveyed said they will visit brand stores online more often, while 28% plan to decrease their shopping at department stores.
A report on China’s media industry from GroupM forecasts that the advertising market will contract by just 2.8% in 2020, compared to 11.8% globally.
While Chinese audiences are eager to return to movie theaters, nearly three-quarters of respondents have paid to watch a film online, and 64% can accept the need to pay for such content, according to a movie market report released by Maoyan Entertainment, iQiyi, and Weibo.
News in English
The live fashion show will return for Shanghai Fashion Week in October, but with more livestreaming and e-commerce integration capable of expanding the audience and driving sales. WWD
Are consumers over celebrity e-commerce livestreaming? Despite drawing 26 million viewers during her debut sales broadcast on Douyin, actress and influencer Angelababy sold only $1.8 million worth of products. Radii
British brand boycott: Chinese state media named the luxury firms Burberry and Jaguar Land Rover as potential targets of a consumer boycott amid rising geopolitical tensions between the U.K. and China. The Telegraph
The U.S. blacklisting of more Chinese firms linked to forced Uighur labor could cause supply chain disruptions for brands that have done business with them such as Apple, Ralph Lauren, and Tommy Hilfiger. Wall Street Journal
Swiss watch exports to China continue to be a bright spot for the otherwise battered sector, with a 47% increase in June. WWD
Weibo announced that it will crack down on overzealous behavior by celebrity fans such as personal attacks and efforts to manipulate rankings. SCMP
Nestle may sell some of its local food and water brands in China, partly as a result of increasing competition from Chinese rivals and partly due to a strategic overhaul aimed at focusing on premium products. CNN Business
How a knock-off version of a Linkin Park t-shirt became a streetwear phenomenon across China. Wired
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Thank you for reading! We hope you have a productive rest-of-your-week and look forward to seeing you again this coming Tuesday.