October 19, 2021

Enterprise JM

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What Do Chinese Consumers Really Want From E-Commerce Platforms?

Key Takeaways:

  • Consumers under the age of 30 account for almost 50 percent of luxury purchases in China. 
  • It is now crucial for luxury brands to make their products readily available on e-commerce and social platforms in China.
  • Today’s Chinese consumer expects a suite of perks, both online and offline, from luxury brands. 

One trend that intensified in China during the COVID-19 pandemic and is sure to continue long after is the adoption of e-commerce to purchase luxury goods. While some luxury brands have been active on platforms such as Tmall Luxury Pavilion for several years, others have only taken the plunge in recent months. 

But simply selling products online isn’t enough to drive sales. Consumers in China are looking for much more in deciding when and where to make their purchases, and for brands this can mean the difference between realizing a sale now or in a year or two, when Chinese tourist-shoppers may finally venture back out into the world in anything approaching pre-pandemic numbers.

So what do Chinese consumers look for in a luxury e-commerce platform and from brands selling in China through online retail?

1. Seamless shopping via mobile and social

One truism about young Chinese consumers is that they have never been tied to a particular platform when browsing or buying luxury goods online. They shop pragmatically — driven by value, flexibility, and convenience — so it is crucial for brands to make products easily available on e-commerce and social platforms. 

As Jing Daily has previously noted, one feature that sets Chinese consumers apart from their Western counterparts is that Chinese loathe shopping via internet browser, and mobile rules. Everything from the discovery of a luxury item (for example, seen via a branded placement on streaming video) to researching every aspect of a product (such as on platforms like Xiaohongshu) and finally completing the purchase (perhaps through a livestream on Taobao Live) is often done solely via a mobile device, which is also used for post-delivery sharing of product posts on social media. 

Consumers under 30 make almost 50 percent of luxury purchases in China. As such, this younger cohort increasingly calls the shots in terms of what brands do in the market. Sandrine Zerbib, founder of Tmall Partner agency Full Jet, told Vogue Business, “Because the consumer is younger, he or she is also keener than Western consumers to shop online as well as to enjoy and share online content.”

In China, shoppers generally do not align themselves to e-commerce platforms or necessarily turn to them to discover brands. The online retailer is simply the point of completion for a sale that was a long time in the making, with the decision-making process conducted through a great deal of research and exposure across various other platforms, many of which are also increasingly shifting their focus to boosting their e-commerce capabilities. For a global e-commerce platform considering expanding into China, all of this must be taken into consideration. Strategies that are overly browser-focused or otherwise lacking in mobile experiences will fail to succeed in the Chinese market.

2. Ample information, visuals, and video

Another crucial element of a successful luxury e-commerce strategy in China is the ability to provide consumers with a wide array of product information and imagery. As Full Jet’s Zerbib told Vogue Business, “the Chinese digital scene requires content production at scale. [Operating on these platforms] means an endless need for visuals, from photos to videos. And this is not what luxury brands’ HQs are equipped for.”

As a result, brands active in China need to step up their content infrastructure, offering ample information about each product they offer, or, at the very least, a significant amount of photos and video or regular livestreams that show products up close from multiple angles.

3. Online and offline perks

Chinese consumers that have shown their loyalty to a brand or platform by making a significant number of luxury purchases have come to expect a suite of perks, both online and offline. One company that has built a loyalty program with numerous benefits into its China strategy is Farfetch. 

The luxury e-commerce retailer’s tiered “Access” loyalty program unlocks different perks for various VIP levels, which range from Bronze to Private Client, encouraging consumers to spend more to move up in the ranks and access ever more exclusive bonuses. In a featured interview in Jing Daily’s recent market report, Chinese Cultural Consumers: The Future of Luxury, Alexis Bonhomme, Vice President Greater China and Asia Pacific at Farfetch, explained the appeal of the program:

An important part of our business in China is related to our “Private Client”, our top tier spending customers for whom we offer exclusive and premium experiences, such as an exclusive visit to the Dior Shanghai exhibition, Private Client dinner in Chengdu, Master Class in Beijing, etc… We also create an exclusive communication channel for these clients, including a dedicated WeChat official account, dedicated mini program and newsletter, as well as personal stylists. 

When it comes to engaging Chinese luxury consumers, a personal touch and offline activations are essential. For our customers and soon-to-be ones, we launched Farfetch Community Gallery in Shanghai, Beijing, and Chengdu. We created top VIP activations in those cities and the most recent one [was] in the Bvlgari Hotel in Shanghai.

Other brands have rolled out invitation-only membership programs that include access to exclusive clubs, such as the Johnnie Walker House (previously on Jing Daily) in Beijing, Shanghai, and Chengdu. These hybrid strategies are important both for making the brand experience more tangible for consumers as well as building a community. As Farfetch’s Bonhomme noted in Chinese Cultural Consumers: The Future of Luxury: “Digital channels break the geographical barrier of consumers while physical channels provide in-store/ at-present experience. Therefore, a good combination of the two types of channels could be beneficial to engage with Chinese Cultural Consumers.”

Jing Daily previously pointed out how rewards can and do build customer loyalty over time, and an Ipsos China survey found that attractive membership benefits were a leading draw for beauty retailer Sephora’s classification as a premium brand. For luxury brands that are exploring or already offering e-commerce in China, figuring out the best ways to weave in offline VIP experiences — and promote them enough online to make them highly covetable — will be a must in 2022.

What Do Chinese Consumers Really Want From E-Commerce Platforms?