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Luxury Symposium 2021: New Retail Is Shaping China's Luxury Market

Luxury Symposium 2021: New Retail Is Shaping China's Luxury Market

The 5th edition of the Luxury Symposium went virtual on April 21, amassing leading industry voices who dove into the new luxury sector retail models.

On April 21, the fifth installment of the Luxury Symposium, hosted by the French Chamber in Hong Kong, went virtual with over 300 attendees who are top decision-makers and thought leaders in the luxury sector. Amid this unique and turbulent period, the conference amassed the leading industry voices from Mainland China, Hong Kong, and beyond to cut through the post-pandemic noise by diving into the booming new retail that’s shaping China’s luxury market. Here, Jing Daily has highlighted key conversations and talked to selected speakers to sketch out the ever-shifting luxury market in China and zoom in on pivotal topics such as Gen Z, sustainability, and the domestic offshore duty-free market.

The future outlook for China’s luxury market


By Bruno Lannes (Senior Partner, Bain & Company)

Lannes kicked off the opening keynote with an overview of China’s luxury market in 2020, claiming it was bolstered domestic spending in the wake of international travel. He recognized the four main engines as repatriation, millennials & Gen Zers, digitalization, and Hainan duty-free shopping, and the panel contextualized those opportunities for the upcoming year. In addition to recapping these key trends, Lannes addressed the dynamics of duty-free shopping destinations amid the current situation, especially Hong Kong losing out to Hainan, which is now attracting more Mainland luxury shoppers.

The future of luxury


By Erwan Rambourg (Author of Future Luxe: What’s Ahead for the Business of Luxury)

Rambourg elaborated on his book Future Luxe: What’s Ahead for the Business of Luxury, which identifies the major forces and emerging trends that will reshape luxury over the next decade in the context of the post-COVID-19 situation. In particular, he discussed the expansion of Chinese consumption, the surge of female spending power, and how the younger generation is redefining the luxury sector. The author also covered how brands and retailers should weather the current disruptions and shifting perceptions about luxury.

Curating superior customer experiences: Measurable digital engagements and connections


By Kim Leitzes (Managing Director, APAC, Launchmetrics), Thibault Villet (President, APAC, Tory Burch), and Jean-Laurent Vilon (Managing Director, APAC, Mazarine); Moderated by Yvon Le Renard (Partner and Managing Director, Clever Age Asia)

On this panel, speakers dove into China’s evolving digital market, including innovative digital marketing, disruptive e-commerce, and online-to-offline commerce. Though going digital tends to be irreversible for luxury players, Leitzes said that one of the main challenges brands face today when leveraging digital strategies is “maintaining exclusivity while allowing for a degree of accessibility.” Meanwhile, to balance the two counterparts, brands must “implement a fine-tuned and crafted approach that represents the brand’s DNA and values, yet also grants KOLs enough room for their own interpretations.”

However, the dynamic between online channels and brick-and-mortar was not a question of one or the other but about “balancing and developing a stronger, local strategy on both a commercial and marketing/KOL approach,” Leitzes added.

Gen Z: A quick peek at China’s next generation of consumers


By Xiaolei Gu (Innovation Director, FABERNOVEL Asia)

In Gu’s presentation, she explored the mindset and values that distinguished Chinese Gen Zers and how their purchasing habits are being shaped. As she pointed out, “China’s Gen Z pursue individuality while attaching greater importance to the sense of belonging or community than their peers in the rest of the world.” And this nuance can be attributed to the unique social, cultural, and economic environments in which this group has grown up.

Gu also shared her personal experiences about browsing on Bilibili for half an hour each day to learn Gen Z’s languages and behaviors. Throughout her journey on the video-sharing platform, she said that brands should consider Gen Zers as various interest-oriented communities and not an entire segment.

Sustainability in the luxury world: Where are we today?


By Michael Beutler (Director of Sustainability Operations, Kering); Moderated by Maxime Pruvost (Founder and Managing Director, BEE Retail)

Beutler shared Kering’s approach to measuring sustainability effort, named the Environmental Profit & Loss (EP&L), which accounts for carbon emissions, water consumption, air and water pollution, land use, and waste production across the supply chain. He also noted that awareness of sustainability and environmental agendas has grown in China’s market, yet each regional market moves at its own pace on the issue. As such, Kering has to capitalize on demands there and respond accordingly with the best solutions.

O2O strategies and customer experiences for luxury retailers and online platforms


By Alexis Bonhomme (VP, Greater China and APAC, Farfetch) and Wendy Chan (Senior VP, Digital, LVMH Asia Pacific)

Bonhomme and Chan exchanged their observations and initiatives on enhancing customer experiences in the highly competitive luxury market. Bonhomme identified a barrier that Farfetch encountered — a lack of communication with their clients across an online platform. Yet, its offline activations in recent years have improved customer engagement and helped the brand better understand its local shoppers.

Chan pointed out the retail shift from travel to domestic, due to the post-COVID-19 repatriation, demanded more devoted customer relationship management (CRM). Plus, the pandemic accelerated the integration of online and offline communications between salespeople and their clients, facilitating the digitization of CRM.

Building bigger markets: Hong Kong, Greater Bay Area, and Hainan


By Virginie Martignac (Global Travel Retail Director, Cartier), Stephen Phillips (Director-General of Investment Promotion, Invest Hong Kong), and Frederic Winckler (Executive VP, Chief Creative and Brand Officer, Melco Resorts & Entertainment); moderated by Rebecca Silli (Partner, Tiang & Partners)

COVID-19 has disrupted travel retail worldwide, and the market sizes of former hotspots of duty-free shopping have moved due to travel restrictions. The speakers touched on the bumpy ride for Hong Kong due to geopolitical and pandemic quandaries, especially for its luxury sector, which is now being challenged by Hainan. That leap has largely been attributed to the Chinese government’s position on the island as a shopping destination for domestic consumption.

Hainan: The lighthouse of travel retail


By Martin Moodie (Founder and Chairman, The Moodie Davitt Report)

The closing session shed light on the landscape of ever-evolving travel retail in Hainan and the impact of an enhanced duty-free shopping policy introduced in July 2020. Moodie showcased the booming turnover number of the outperforming travel retailer, China Duty Free Group. Aside from walking through the expanding footprint of Hainan’s offshore duty-free shops, Moodie also shared how the duty-free boom is attracting brands and industrial fairs like Watch & Wonders and the upcoming China Consumer Products Expo 2021, further fueling inbound travel consumption.

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