Louis Vuitton, Bulgari lead luxury push on China's WeChat

Brief:

Louis Vuitton and Bulgari are the top-ranked brands among luxury marketers that have expanded on WeChat, the Chinese messaging app that has more than 1 billion users and supports a range of mobile marketing activities. Cartier, Coach, Tiffany, Burberry and diamond seller Chow Tai Fook also ranked highly for embracing WeChat, according to researcher Gartner L2.
Louis Vuitton ran promotions modeled after streetwear "drops" of limited-edition products to drive sales at its virtual pop-up shop, which runs as a "mini program" inside the Tencent-owned WeChat app. The luxury brand generated online buzz by appointing former boy band member Kris Wu as its brand ambassador in November, per Gartner L2.
Bulgari, which also named Wu as a brand ambassador, expanded its WeChat functionality to let users customize products, check inventory, make store reservations and pick up online orders in stores. The portion of luxury brands that have at least one WeChat store jumped to 60% this year from 36% in 2018, with strength in fashion and watches and jewelry, per Gartner L2 cited by TechCrunch.

Insight:

Luxury brands like Louis Vuitton, Bulgari and Cartier are boosting their presence on WeChat, reflecting the messaging app's support for mobile commerce features such as transactions, loyalty programs and other services for a massive user base. Because WeChat acts like a miniature mobile operating system on Android-based phones — making its features more like Apple's iOS — the app appeals to a broad range of smartphone owners and to marketers that want to reach that audience.

The top-performing luxury brands have adapted to the Chinese market by adapting to Gen Z trends and preferences, such as the popularity of streetwear and sneakers. They also have recruited celebrities including Kris Wu, Hu Ge and Yang Yang as brand ambassadors who promote their products online. Those promotional efforts are necessary on WeChat, which isn't a centralized marketplace like rival Alibaba that indexes merchants on its platform for easier discovery through its search engine, as TechCrunch notes. Shoppers learn about WeChat stores by scanning QR codes at brick-and-mortar stores or clicking on banner ads on websites or in other apps.

These luxury brands are slowly coming around to social platforms. Cartier, for example, ran a video campaign for the Qixi Festival on Weibo, the popular social media platform that resembles a cross between Facebook and Twitter. Cartier's ads featured celebrity Lu Han and received significant engagement for the launch of a new product line. A video spot for the collection last year was one of the 10 most popular ads on Moments, WeChat's social sharing feature that resembles a Facebook news feed. Cartier also ran full-screen ads on social shopping app RED to let WeChat users reserve tickets for an art exhibit as the brand rolls out its Clash de Cartier collection.

Meanwhile, WeChat doesn't collect commissions from online merchants that set up mini program stores in the app, setting it apart from other marketplaces. It instead earns fees from its WeChat Pay digital wallet. Rival Alipay isn't available in WeChat's app, giving WeChat a chance to grow its payments business with ecommerce transactions, TechCrunch reported.

Earlier this year, WeChat parent company Tencent announced plans to add a voice-powered virtual assistant to the app to let users perform simple actions like playing music or hailing a ride with a voice command. The company also said it wanted to boost the monetization of advertising on mini programs and test more ad formats as users grow "ad blind" to more traditional formats. The expansion of its ad platform will give marketers, including luxury brands, more opportunities to reach Chinese consumers on the social app.