Is the future of luxury in China augmented reality?
The second edition of the Luxury Society Keynote event took place last week at the Four Seasons Hotel Pudong in Shanghai, highlighting the need for brands to adopt new technologies in China to reach Millennials, such as Virtual Reality (VR), as well as investing in digital content like live streaming.
Designed to educate and motivate luxury industry professionals across fashion, beauty and lifestyle sectors, the Luxury Society and Digital Luxury Group hosted a series of keynote presentations that provided exclusive industry data releases and insider perspectives -- all making for an engaging conversation between industry experts and professionals.
Augmented reality was a major topic. Pablo Mauron, partner and managing director atDigital Luxury Group, China, said that in 2016, despite VR being in its infancy, brands need to be clear on how to use it and bring new experiences to consumers, especially Chinese Millennials.
"The millennial generation, which already accounts for 300 million people in China, will be the opportunity for the future," said Mauron.
"Their way of thinking is more complicated and they want to be inspired; they seek experiences and emotional connection, they’re not just a bystander. As a result, live streaming has become a medium for them to express themselves.”
Some 300,000 VR sets were sold on Taobao last month and companies like TMall and Mei.com are already experimenting with the technology.
Talking about the need for luxury brands to adapt to change and new technologies, a panel -- made up of Jenny Tu of Yixia Tech, maker of YiZhiBo, a leading live streaming platform; Di Fu from Baidu, whose main focus is research on augmented reality technologies, Oosha Zheng of Blackbow, an organisation that builds interactive experiences for its clients, and Thibault Villet, from Mei.com -- discussed the role of technology in luxury brand communications.
The panel said that especially in China, young customers are embracing new technology. VR is the future platform for carrying digital content, said panellists, and brands must learn to leverage on the new technologies to build engaging content
Meanwhile, the Chinese tend to work with celebrities or KOLs to do the live streaming, because their followers are young and active on these social platforms, they are the targeted audiences for the brand, added the speakers.
The digital saviness of these online Chinese platforms was highlighted by luxury fashion e-commerce platform, Mei.com, at the conference. This year, Mei.com launched a Tmall collaboration on October 23rd that live-streamed a major fashion show, receiving over 5,000,000 interactions from their online audiences. The firm also witnessed a quick return on investment and immediately sold 65% of the products.
"We want to deliver customised and targeted content for all our different customers, and in turn help to drive sales," said Thibault Villet, Co-Founder and CEO of Mei.com, during his presentation.
However, not all brands believe live broadcasting leads to a conversion of online sales, conduced a conference panel made up of Arthur Zhang, CEO of UCO Cosmetics; Vanessa Qian, digital manager, Sephora China; and Robin Kerawala, from Kung Fu Data. Although, most brands agree it does offer good brand exposure, they said.
The group said that luxury and premium brands are still faced with the challenge of massive parallel import, or 'daigou' (using overseas persons to purchase luxury goods for a customer in mainland China as prices can be 30 to 40 percent higher in China), which may have played a role in Coach’s exit from Tmall this year, said the panel.
Meanwhile, for many brands, particularly beauty brands like Estee Lauder, Clarins, and L’Occitane, learning how to navigate online sale rushes is imperative. Some 30% of annual revenues can be made on Single’s Day (each November 11th in China, and known locally as 11.11), with some even higher, the panel added.
The 2016 Luxury Society Keynote event gathered representatives from Baidu, Baume & Mercier, Bulgari, Dior, LVMH, Mei.com, Michael Kors, Nars, Sephora, Swarovski, Shiseido, Qeelin, UCO Cosmetics, Yixia Tech, as well speakers, panelists and delegates from the luxury and digital industries.
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