Chinese people are the biggest luxury products buyers.

Sales in China

Chinese people are now the biggest luxury products buyers. According to McKinsey&Co, 35% of these worldwide luxury products purchases are made by Chinese.

Moreover, Chinese people are also the biggest online buyers all over the world. Yet, only a quarter of luxury brands are selling their products online directly to Chinese consumers.

online shopping

In order to order online, Chinese consumers mainly use Taobao. Taobao is the ecommerce platform created by the Chinese Internet giant, Alibaba. The reason is simple : Taobao is composed of many references from several brands. For example, the website possesses 190.000 Chanel references.

Taobao_Marketplace_Logo

Kering VS Alibaba

Nevertheless, Alibaba is not loved by everyone. Indeed, recently, Kering, before called Pinault-Printemps-Redoute which is a group which is part of the worldwide luxury clothes and accessories leaders decided to file a suit against Alibaba. The luxury brands accused the group Alibaba to be a chain selling fake products.

20130329_5657F635001395156908010.jpg

This kind of complaint is not a first time for the Chinese website. Indeed, earlier it was Apple and then Samsung which decided to sue the Chinese giant.

4 steps to follow

But these petits failures won’t stop Alibaba to be the ecommerce sector’s leader in China. That’s the reason why today it is Alibaba which wants to teach foreign luxury brands what they have to put in action to attract more Chinese consumers as possible. Here there are :

1. Localization

P201011301421251279921331

This first step suggest to luxury brands to soak up Chinese culture and to bring it out inside their brand when they want to establish themselves in China. To do so, they have to know the cultural differences between China and their country of origins, to adapt the language, to work with Chinese coworkers, to take advantage of existed platforms and to adjust their strategy to the country market.

Trying to attract Chinese consumers by talking to them in english and without adapting to their culture is an useless strategy.

2. Price competitiveness

xin_37050421065783422612

Luxury brands have to finally compete about products prices. No need to keep the original prices from one country to another. Chinese love luxury brands but they love promotions more.

Chinese consumers love promotions on products. Recently, a clearance sale has been organized by Gucci at its Shanghai store. Hundreds of people were queuing up in front of the doors.

3. Developing authentic ads

kol marketing

In China, advertisement is really important. Plus, it influences a lot Chinese consumers’ purchasing acts. Today, numerous brands want to possess an important place in consumers’ heart and mind thanks to sponsorship. But it is not working.

Brands that are the most smart know it now. In order to develop at best its promotion, the key point is KOLs (Key Opinion Leaders). These can be find on Chinese social networks such as Weibo or WeChat. We can also find then on Facebook or even on YouTube.

study weibo

Knowing consumer’s opinion is better. Indeed, this one is not supposed to lie when he is giving his opinion about a product, this other consumers believe in him and it can push to make a purchase.

4. Mobile phone ecommerce usage

people on mobile phones

Chinese consumers are very connected on PC and on mobile phones. Plus, Alibaba and WeChat are the most used on phones. That’s why, luxury brands should ally with them to get a better diffusion of their advertisement.

Indeed, it is through these two apps on mobile phones that Chinese consumers get most of informations et advertisements regarding a product of a brand and that’s these ones that help to persuade Chinese consumers to purchase.

chinese tourists buyers

Alibaba is ecommerce giant in China. Though it went throw lots of scandals because it sold fake products, it still is the leader of online shopping. That’s why today, it is teaching big foreign luxury brands on how to establish well in China by following 4 key steps. If brands want to enter China, they have to adapt their strategy to the country et to get an even better establishment, they should think about get a Chinese online shopping platform ally such as Alibaba. If not, they should adapt their own website payment system with a Chinese one such as China Union Pay or Alipay which are the only two that Chinese trust.