March 6th, 2023 · Written by Samuel Jesse
A total of $53.16 billion will be spent on luxury goods in China in 2023, with an annual growth rate of 4.15%. It is no wonder many luxury brands, both local and global, are trying to capture the growing affluent Chinese market. But, often, things do not go the way brands plan.
Rapid technological adoption, rising disposable incomes, and an increased preference for convenience in China have provided luxury brands with many opportunities but have also presented new challenges. Many brands need guidance with their ecommerce strategy to adapt to the turbulence caused by these changing consumer and technological trends.
Tmall has long been the go-to strategy for luxury brands in China. The Tmall Luxury Pavillion provides a powerful ecosystem of luxury consumers and a platform providing a range of services to sell and market their products. It has proved to be a successful channel for many. But as consumer pools diversify and customer acquisition patterns mature, many luxury shoppers seek more personalized shopping experiences. To create more bespoke and nurtured customer experiences, many luxury brands are turning to direct-to-consumer (DTC) through WeChat ecommerce. But the benefits of DTC ecommerce in China for luxury brands go far beyond optimized user experiences.
Customer data ownership is the key benefit driving luxury brands to DTC ecommerce in China. When selling on Tmall, the customer data provided to brands is focused on the transaction, not the acquisition. The complete overview of the customer journey and the customers' personal information and demographics cannot be fully collected and used for advanced clienteling and marketing purposes. This is where direct-to-consumer, custom-built ecommerce solutions on WeChat can shine.
Direct-to-consumer (DTC) WeChat ecommerce is the practice of brands selling their products directly to customers via a brand-owned WeChat official account. This approach bypasses traditional channels, such as Tmall, allowing brands to own and control their customers’ data and tailor the user experience.
For luxury brands in China, most direct-to-consumer ecommerce will be driven through a custom-built WeChat mini program. A custom WeChat mini program provides an app-like experience inside the WeChat ecosystem built from the ground up, incorporating rich and unique features based on your brand’s business requirements and your customer's needs.
Unlike out-of-box ecommerce solutions, a custom-designed and developed WeChat mini program will give you complete flexibility and creativity in presenting your brand and customer experience. Each step of the design and development process can be researched, tailored, and optimized according to your clienteling strategy, business goals, and objectives.
With DTC WeChat ecommerce, brands can cut out any intermediary third-party ecommerce marketplace and allow direct interaction and communication between the brand and the customer.
WeChat has over 1.2 billion monthly active users. Luxury consumers are already using WeChat and can effortlessly enter your brand ecommerce WeChat mini program with frictionless login, payment functions, and social features that make sharing easy. When you sell DTC ecommerce on WeChat, you can create powerful acquisition funnels for your WeChat mini program through written content marketing on your brand's Official Account, video content through Channels, advertising on Moments, QR codes for instant offline to online access, and viral campaigns through users sharing on instant messaging, in groups and on their Moments.
When selling ecommerce on WeChat, all of the customer’s data throughout their journey can be captured and owned by the brand their WeChat official account. Data can be collected on customer demographics, user behaviors from acquisition to browsing, purchasing, and customer support and communications. It should be noted that it is essential to collect customer data lawfully in China, abiding by the country’s Personal Information Protection Law (PIPL).
Through the collection of rich customer data, luxury brands can create more personalized experiences for customers, provide more meaningful customer support and communications and tailor marketing campaigns to segments or individual users. This creates powerful clienteling opportunities to help luxury brands build stronger relationships with their customers and increase engagement and boost sales.
When you build a custom ecommerce solution on WeChat, you’re in control of the design, content, interactions, product presentations, checkout, and communication - the overall user experience of the shopping journey. This means you can optimize the UX and create a memorable interaction with your customers that stands out from your competitors, leading to forming loyal relationships with luxury consumers in China.