This 11.11 is Special for Luxury Brands
On Oct. 20th 2020, Tmall announced the starting of the largest post-COVID online shopping festival “11.11” in China, while it is also one of the largest e-commerce festival around the world.
Luxury brands are also actively participating the sales activities in China in the past years. Yet this year, under the hit of pandemic which froze the retail market around the globe, the brands are betting more on this online shopping festival for faster recovery.
Oct. 15th, leading luxury brand of LVMH group, Dior has launched its “Double 11” limited-edition collection. Though luxury brands are introducing special edition products for traditional Chinese festivals, such as Spring Festival and Chinese Valentine’s Day, this collection is the very first one that luxury brands developed for an e-commerce festival in China. This time, Dior, obviously, is aiming to attract and seize the Chinese consumers in advance, ahead of other brands. The action also expressed that the luxury brands are paying high attention to this year’s “11.11” and are expecting to boost the sales.
Oct. 24th, on the 4th day of the pre-sale period, luxury jewelry brand Cartier moved its exhibition on Taobao Live, created a “most expensive livestream ever”. Over 400 jewelry products were exhibited, including a necklace of 250 million Euro. In 2 hours, the show attracted over 770,000 viewers. This is also Cartier’s first livestream in its history.
Other brands are also trying hard to gain more attention, Vacheron Constantin moved its launch of Christmas special watch to “11.11”, while Balenciaga chose “11.11” as the global launch of its new sneakers.
11.11’s Powerful Boost
In fact, the boost from “11.11” for brands is enormous. Simply take Tmall Luxury Pavillon’s performance last year for example – on the first day of pre-sale period, there were 85 luxury brands presented, including 36 brands were participating the pre-sale for the first time. GMV last year saw an astonishing boost of 600% with consumer scale last year was increased by 550% comparing to 2018.
While for the “11.11” this year, the scale was never seen before – Tmall gathered 5 million brands and shops and over 800 million consumers. Also, Tmall “11.11” provided related online-offline services for brands to perform better. For international brands, the newest data showed throughout the “11.11”, there were over 26,000 brands from 84 countries and regions providing 1.2 million products for Chinese consumers. Facing the difficulty in overseas market, brands are performing more actively with more confidence in mind.
LY Insight | Post-COVID Market, online is the Key
On the back stage of the fiery situation of luxury brands in these two months on Tmall, is the fast recovery of China’s economy and brands’ strategy of digital expansion in China market.
The rebound of China market is bringing strong confidence for brands. LVMH released its Q3 report recently. The leather goods sector experienced a cheering rise of 12%, mainly contributed by the Louis Vuitton and Dior’s good performance in China. Top luxury brand Hermès, reported in Q3 a dramatic decline of 9.3% and 22.8% in the Americas and in France respectively, yet contributed by the sales recovery in China, the performance in Asian Pacific market was boosted by 29%.
The speed of recovery in the Chinese mainland market does give brands a boost. At the same time, the online channels is becoming a more important role for luxury brands.
As for Hermès, so far, the online sales is already the largest source of income. In the past 9 months, the brand’s online sales volume in China had increased 100%. Actually, Tiffany reported a high u to 90% online sales rise in Q2, even earlier in June.
COVID-19 has speed-up the development of e-commerce, but the speed in China is way faster than any other countries or regions. From Jan, Chinese online retail gross volume has increased 9.7%, sharing a 24.3% of total sales volume. As eMarketer’s prediction, by the end of 2020, Chinese e-commerce scales will reach in total of 200 billion USD, which will account for 35% of China’s total retail sales. In the United States, this proportion is only 10%.
The rapid recovery of the domestic market and the strong growth of online consumption capacity, is one of the key reasons for luxury brands to focus more on “11.11”. The brand hopes to use Double Eleven to further step into the vibrant Chinese market and seize the opportunities to accelerate its recovery in the post-epidemic era.