We came to know Wuhan as a “ghost city” following the thriller of the first global outbreak of the COVID-19 pandemic. We witnessed a region with a population of 11 million suddenly turning into a deserted and dark city. Empty streets, closed schools and factories, record deaths, people sealed in their homes, and a permanent, unprecedented, sorrowful silence prevailing, terrifying the entire humanity. That was the image of Wuhan during the peak of the virus outbreak, which we hope never to see again. Today, the city has almost returned to its rhythm. Lights are lit, stores are reopening, and people, once again free, return to their routines.
Louis Vuitton chooses Wuhan for its new global exhibition, “SEE LV,” an exciting journey through the 160-year history of the house. It seems unbelievable that the French house selects a “challenging” city for such a special event, a move clearly aimed at highlighting its social profile in that specific country. Moreover, considering the power of the Chinese market, its role, and strong presence in the fashion industry, one can easily understand the smart strategy behind this decision.
The statistics provide the answer. On June 12, 2019, Kantar Millward Brown’s research (a global research organization specializing in advertising, marketing communication, media, and brand equity research, the relationship between consumers and the brand) revealed the top names of global fashion houses. In a report, it was noted that the overall value increased by 29% compared to last year. Specifically, Louis Vuitton appears to be at the top of the global list of luxury brands with a value of $47.214 billion. Chanel and Hermes took second and third place, respectively, revered houses that I will discuss in future topics, where we will explore their secrets together.
Taking a brief historical look into fashion, between 1997-1998, Louis Vuitton decided to select museum pieces with historical designs and create spectacular exhibitions in Beijing, Dalian, Chengdu, Shanghai, and Guangzhou. The house’s shows were greatly appreciated, and soon Chinese consumers identified with its name.
However, the need of the house to win over the Chinese market brings the next strategic step. In July 2012, Louis Vuitton opened its largest exclusive store in mainland China – Louis Vuitton House Shanghai – while in 2004, Louis Vuitton China announced its official website (with direct sales to Chinese consumers), aggressively entering the Chinese industry. Domestic sales include 40 offline stores and 3 online stores. These channels contribute to a significant 8% of sales between October 2018-May 2019.
The presence of the business-to-consumer (B2C) platform, the website, and the app are the main “weapons” of the house’s strategy. Observing the journey of the top luxury brand, we discern a very significant element. Louis Vuitton has managed to enter the hearts of Chinese consumers, and returning to 2020, at the most critical moment, decides once again to make the right move. If not now, when? It’s the perfect timing…
LOUIS VUITTON PLAZA 66 STORE IN SHANGHAI
The website in China with the option for direct online purchases is reaching new heights. Its performance surpasses all previous records. According to reports, the site’s traffic during the period from October 2019 to May 2019 increased by 14%, solidifying its position as the leading brand in online retail sales.
It’s particularly remarkable that the luxury brand has managed to capture the heart of the Chinese consumer so effectively, and another aspect of the research comes as a shock. The majority of searches originate from direct search. What does this mean? LV’s marketing strategy in China is now so robust that the consumer isn’t searching for a specific product on the internet; they’re searching for Louis Vuitton, they’re searching for the name, they’re searching for this particular luxury brand, even just to admire it. It could be called the vision of every brand and every designer. That’s why studying the strategy of every fashion titan plays a leading role in our evolution in fashion. From fashion bloggers to fashion directors and fashion designers, the history of fashion has never ceased to inspire us. We all share a common denominator: marketing. Without strategic moves, there is no room for advancement in fashion. Today’s review confirms this.
Here we encounter the competitive aspect. Let’s look at Burberry’s performance in numbers. It’s worth noting at this point that China represents Burberry’s largest source of revenue. For context, before I present the statistics, it’s important to mention that in 2018, sales in mainland China increased significantly by +20% compared to a mere +2% and +1% in America and Europe, respectively. These numbers show Burberry climbing to the top of the competition. However, despite this, comparing the conversion rate of 12.39% at the flagship store on Tmall, Louis Vuitton’s revenue-generating potential on China’s largest e-commerce platform leaves nothing to be desired.
- Mobile Applications
Once again, LV’s strategy is born through the technology of mobile phones, which we all carry almost 24/7. Apps constitute the largest part of our engagement on mobile, especially for the Chinese. Louis Vuitton has capitalized on today’s digital opportunities by creating an ideally crafted app where users can easily find desired products by simply scanning the corresponding QR code using artificial intelligence. User-friendly, simple, and miraculous. Moreover, the luxury brand continues to refresh the app with frequent necessary updates and additional changes.
Source: shorturl.at/jwDFI
Louis Vuitton is intertwined with technology. It follows, participates, walks alongside it, and ensures its presence is felt on the most popular online platforms in China. After all, let’s not forget that this is a country with a long history and technological superiority. Speaking with today’s data, China has rapidly ascended the value-added chain, creating world-class industries in every sector, from 5G technology and artificial intelligence to biotechnology and quantum computing. China’s rapid technological progress has shocked most observers in the United States. However, for Chinese leaders, it reflects a movement dating back to the early days of the People’s Republic. It is true that it has much deeper roots, but this is not the present focus.
With all the aforementioned elements, one can easily understand the crucial role of technology in fashion and marketing in general. It is here that secrets and strategies are born. In 2019, Louis Vuitton opened its own WECHAT Store for sales and promotions for the first time, a move quickly followed by other major names like Prada, Dior, and Burberry.
The WECHAT platform is one of the most popular apps created by Allen Zhang in 2011, and in the last three years, it has played a leading role in China’s e-commerce market. It is a “multitool” application, providing users with everything from instant messaging to online shopping, from social networking to financial management. WECHAT is literally part of the daily lives of Chinese consumers. It’s worth noting that apps like Facebook, Twitter, WhatsApp, and many others are not available in China. With 1.7 billion users, the app penetrates into England and America, supporting an additional 20 languages. The tremendous popularity of the app attracts the attention of every marketer, while offering business accounts (subscription, services, and corporate), customer service, and advertising opportunities.
Source: Value China
- Promotion
The power of promotion has proven to be particularly influential in the fashion industry, and Louis Vuitton knows this very well. It always strives to create the ideal image and win over the Chinese consumer with various promotional strategies. Building a perfect business ecosystem that includes a range of social media platforms, search engines, WeChat public accounts, and newsletters to meet every market demand.
Another innovative idea in Louis Vuitton’s strategy was the significant initiative to invite fashion bloggers for the first time in the history of luxury brands in mainland China to take over the house’s official WeChat account.
However, Louis Vuitton does not stop here with its business plan. In June 2019, during the same period, it earns yet another title. It becomes the first luxury brand in China to open a Xiaohongshu account. Based in Shanghai, the widely known Xiaohongshu, or “Little Red Book,” serving over 10 million users, ranks among the most popular and useful shopping platforms for luxury brands. In subsequent articles, we will encounter houses like Chanel and Dior coming as LV’s first competitors.
The first livestream by Louis Vuitton on Xiaohongshu attracted 15,000 viewers in a nearly 1-hour and 10-minute timeframe.
As I have outlined up to this point, all the aforementioned platforms bear some resemblance to our European apps like Depop, Instagram, TikTok, Pinterest, and operate in a similar manner. However, it’s the attention to detail that sets them apart. The upgrades, features, and capabilities of Chinese applications make them “multitools” that, compared to European standards, have yet to be matched by an app with such ambitious design.
- Targeting the ‘Netizens’
Louis Vuitton’s marketing goal is to win over the so-called ‘Netizens’ of China. This term is coined from the words ‘Internet’ and ‘citizen’, essentially meaning “citizen of the net” or “net citizen”. It’s true that netizens, primarily the youth, represent both the present and the future. They are the consumers that every brand seeks, and their preferences shape the strategies of brands like LV. Within this framework, the luxury brand has effectively penetrated every popular platform. Advertisements seem to be omnipresent and highly targeted. The equivalent of Google’s search engine, Baidu, stands as one of the largest advertising pillars for LV, with an application boasting over 174 million users and a steady increase (+28% annually). Among the top online platforms, I couldn’t overlook Douyin, the Chinese version of the globally renowned TikTok. With over 400 million netizens users, Louis Vuitton has found itself within the ideal resources of a vast and ambitious business ecosystem.
In January 2018, Louis Vuitton launched its own stickers on iMessage, allowing all iPhone users in China who download the LV app to have automatic access to them.
The surprise collaboration LV x LOL (League of Legends) Chinese Edition in 2019 was unexpected.
No, it’s not a troll, nor is it a random strategic move. In 2019, the new LV x LOL campaign was announced, a campaign that left us all stunned. League of Legends is a team-based strategy game with over 115 million users worldwide. Considering its position at the top of the gaming industry and its reach to such a strong percentage of netizens, one can understand the clever strategy behind this seemingly “illogical” and unexpected collaboration. At this point, I urge you to read a fantastic article by Zhuoxuan Peng that elaborately describes why every luxury brand should focus on China’s online gaming. I highly recommend it; it will give you deeper insights into the world of marketing, and within a few minutes, it will truly broaden your perspective. Take some time and dedicate it to this article; you’ll remember me. In China specifically, the number of netizens who avidly play League of Legends reaches the staggering figure of 111 million users. Now, consider, among such a significant number, consisting of netizens, active players, predominantly young, with a strong female percentage – as women gamers are increasingly thriving – to what extent has Louis Vuitton succeeded in achieving its ultimate goal? In the world of fashion, nothing is coincidental; every move operates through strong coordination teams, dedicated and composed of top-notch professionals. Louis Vuitton is the luxury brand that hasn’t casually entered the heart of the Chinese consumer. The business ecosystem it has created is so “aggressive” that it resembles no other. However, such an enviable model is directly placed in competition, while for others, it becomes a model strategy. Zhuoxuan Peng, the writer for Jing Daily (a site dedicated to luxury trends among consumers in China), had written, among other things:
“The LV x LOL collaboration ’embraces’ the brand’s image of authenticity and heritage to the global e-sports audience. LV’s capsule collection model allows users to travel through the brand’s history via virtual reality. This experience, which blurs the boundaries between the real and fantasy worlds, is something innovative for most Chinese consumers who have embraced it with a mix of excitement, curiosity, and welcome. Surely, it’s a trend that is undoubtedly in perpetual evolution.”
With today’s data for 2020, China’s lockdown dealt a huge blow to the entire country’s industry, resulting in a significant drop in sales for every fashion brand worldwide. However, today, a few months after the reopening of stores, the country and its commerce are bouncing back strongly. Illustratively, we see Louis Vuitton and Dior doubling their monthly sales – from around the end of March onwards – and the Chinese market skyrocketing once again. According to the local economic platform Xueqiu, LV is bouncing back dynamically, recording profits of $21.7 million for August, something that the house, of course, refuses to admit. However, Xueqiu maintains that this is a record in monthly sales in the Chinese market, and if we consider three significant factors, we can do nothing but confirm it:
- LV men’s spring 2021
The LV men’s spring 2021 fashion show, which took place in early August in Shanghai, China, was also broadcasted online, reaching a spectacular viewership of over 100 million views across countless platforms.
2. Qixi Festival
Louis Vuitton played a leading role in the Qixi Festival, the equivalent of Valentine’s Day and a pan-Chinese gift-giving day, where on August 25th, the brand generated such significant profits that it caught the attention of the local press due to the long queues.
3. Lockdown
While the lockdown may have posed challenges for the wider industry in China, it also had its positives. With restrictions and the inability of consumers to spend their savings on planned trips, Chinese citizens had more disposable income to spend on their favorite luxury brands once the lockdown lifted. This magical shift resulted in a significant spike in Louis Vuitton sales.
Louis Vuitton has firmly entrenched itself in the heart of the Chinese consumer, penetrating even their wallets. A series of strategic moves, a robust business model, a powerful industry, and perpetually aggressive marketing are the components of its success. How this is accomplished in practice, I won’t tell you. If it were that simple, after all, we would all be successful. What I want you to take away from today’s topic and deeply understand is that nothing is random in the magical realm of fashion, neither success nor the need for social profile elevation and awareness. Everything stems from somewhere, everything has its purpose and serves something. Perhaps therein lies all the magic after all. After all, “the hunt for treasure” has always been our favorite game.
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