SHANGHAI — Using new technology isn’t as important as finding synergies between technological advancements and traditional brand building.
This was the predominant message of the second annual Luxury Society Keynote, which was held for the second year running here last week. The conference invited 120 luxury industry executives from more than 30 companies to hear presentations about new technologies such as virtual reality, live-streaming apps, e-commerce and more.
“Technology is really setting the scene for marketing and communication, even for more traditional luxury brands,” said David Sadigh, founder and chief executive officer of Digital Luxury Group, which acquired Luxury Society two years ago and organized the conference.
“My perception is that there are lots of innovations, technological tools, etc., but the key is finding the glue; how do you make these technologies relevant? How do you connect the dots between the different elements, particularly between the online world and the off-line world?”
Along the same lines, Arthur Chang, founder and chairman of beauty e-commerce experts UCO Cosmetics Ltd., said he has seen plenty of brands keen to embrace new technologies, with middling results.
“From the beginning of this year, live broadcasting has been very popular. Though we have seen them capturing the attention, we haven’t seen them converting sales. It’s good brand exposure, but it depends how you use it,” he said.
“Whatever new technology you are talking about, the most important thing is how the marketers use the technology to link with the brand, to communicate the message, to really actually building awareness.”
Also on the agenda was a presentation from China’s most used search engine Baidu about the search habits of Chinese Millennials, known locally as the “post-Nineties.”
According to Grace Zhang, general manager of Eastern China for Baidu, the 300 million-strong demographic accounts for 58 percent of Baidu’s total searches and “cute and simple” messaging is key.
“They don’t have time to consider very long content. Post-Nineties really respond to a quick and effective style of content,” Zhang said.
There was also particular interest in the prestige category, compared with aspirational and accessible segments. Cartier was the most searched-for prestige brand, thanks in large part to the brand’s partnership with Lu Han — a key opinion leader described by Zhang as “key” to the post-Nineties demographic.
During a panel discussion on e-commerce in China, Robin Kerawala from Kung Fu Data, a private e-commerce intelligence service, spoke about the challenges facing luxury brands in China’s e-commerce environment, particularly in regards to the massive parallel import, or “daigou,” industry for luxury goods and the potential role it played in Coach’s exit from Alibaba’s Tmall platform in September.
According to Kung Fu Data’s estimates, for the six months to November, Coach branded products sold 500 million yuan, or $72 million at current exchange, on Alibaba’s platforms, 80 percent of them on Taobao, with an average price of 1,200 yuan, or $174.
“Given the environment, how to you make a 500 million [yuan] daigou market go away? Well, for brands like Coach, you want to get in there with an official presence, and show the real products and prices. But as a marketing and brand building channel, I think it’s still worth having that presence and it’s worth reconsidering their stand,” Kerawala added.