“There’s rich, there’s filthy rich, and then there’s crazy rich.” — People.com while reviewing Kevin Kwan’s New York Times bestselling series that reveals the outrageous world of high net worth Asian society with humour and heart.
Remember, funnyman Russell Peters’ sketch about him bargain-hunting in a seedy Toronto mall, manned and frequented by Asians selling knock-off brand name goods?
Well, the joke is on Peters.
According to Bain & Company, a leading management consulting company, Chinese consumers constitute the largest portion of luxury purchasers (31 percent) globally. We’re talking about the kind of Chinese customer that has the spending power to fork out $500 for an authentic Coach handbag and a silk Hermès scarf ($300) in the same afternoon.
How’s that for a dichotomy, Mr. Peters?
USA: fertile ground for luxury shoppers
At malls all across the country, many of the customers flocking to buy the high-end items are Chinese. Given that this trend is happening globally, some luxury retailers in Paris have hired Mandarin-speaking sales staff, and some hotels in tourist-rich areas are offering congee (a Chinese porridge) on their menus. While the regional cuisine is a great idea, building a long-term relationship requires a marketing plan with depth. More so, if the luxury brand is not well-known.
Chatting up a sale
Marketers should harness the power of Chinese social media platforms and messaging apps such as WeChat. Christian Dior did that when it launched its special gift-card program on WeChat.
In 2012, Tourism New Zealand hosted the wedding of Chinese actor Yao Chen in Queenstown. Chen, a social media darling had some 66 million followers on Weibo (Chinese Twitter) at that time. Her nuptials generated over 40 million posts, comments and, threads. With just the right amount of product placement and endorsement, a luxury brand could have easily raked in millions of dollars’ worth of organic engagement. See where we are going?
Understanding the Chinese consumer
According to this report by McKinsey & Company, in eight years since China hosted the Beijing Olympics, over $65 billions of luxury purchases, both in China and globally, can be attributed to the Chinese customer. The report says in order to capitalize on the trend, brands must make a conscious effort to lure customers on each stage and step of their journey: From recruitment to retainment.
Tap into online markets
The McKinsey report notes, only seven percent of Chinese luxury sales now occurs in official online channels. Imagine the possibility of crafting special campaigns that can take advantage of the Chinese consumers’ huge appetite for online buying. A good marketer will integrate and bridge the current gap between digital and traditional channels.