Luxury Brands Not Warmed Up To WeChat Boutique, As Yet

A few days before, WeChat added “official boutique” function to its newest 6.6.0 release with the launch of “brand shopping mall”. The new channel attracted about a dozen brands including Louis Vuitton, Swarovski and Starbucks. Although being a relatively low-key event without much of a fanfare from WeChat’s official channel, this new release relates to its unequivocal ambition for e-commerce. As a further note, Louis Vuitton has never set up any flagstone with any 3rd party e-commerce platform, the WeChat boutique is its only official online outlet outside its own online store.

Typing in brand name on WeChat main page now brings users to an updated interface with Louis Vuitton’s official boutique, official public account and other options. One click brings the users to LV boutique to browse and choose products. Another click sends the users to its official channel – online shopping and information-checking are completed from here. The service and shopping process are consistent with LV’s official Chinese website with the only difference being the mandatory use of WeChat Pay.

For the time being, WeChat boutique only provides an entrance for its traffic just as any app does. Embedded in WeChat, the boutique allows a consumer to switch to purchasing mode without downloading any additional app. The biggest advantage over Tmall/Taobao is integration with WeChat ecosystem through a close-loop process, making it possible for brands to link WeChat’s social interaction with the boutique and at the same time, channeling more traffic for online shopping.

Besides, participating brands can use the boutique as an effective tool for ads conversion, since WeChat adverts on both “friends’ circle”and public account are linked directly to the boutique, it’s much easier for users to place an order – potentially improving their advert’s conversion rate to a whole new level. No doubt such prospects look very attractive to advertisers.

Already deeply integrated into people’s daily life, WeChat is the main traffic engine for Tencent. WeChat boutique is another product that allows merchants to connect directly with consumers after WeChat apps. Although the industry is already rife with rumours of Tencent’s taking on Tmall and JD.com to expand e-commerce marketshare, it’s more likely Tencent would rather rely on forming some kind of alliance with JD in order to improve its competitiveness on e-commerce. On its part, JD is planning to invest more resources into WeChat “shopping” channel and expand e-commerce function through more use of WeChat apps.

Several analysts believe that WeChat boutique will bring a lot of benefits to brands if potential traffic can be tapped properly. On the other hand, as several luxury brands launching on the boutique have never worked with any other 3rd party e-commerce platform, WeChat can be a very good place to dip the toe in. As for the brands, it is very much a place to have a voice in but not to jump start sales. 

Various Chinese social media and e-commerce platforms have become major battleground for western luxury brands in 2017. WeChat just offers a new way to play the game off Alibaba and JD. From the original public account, to embedded ad in “friends’ circle” and HTML5 page, to apps and boutique, WeChat has attracted substantial number of luxury brands joining the platform. According to a global survey on social media users, WeChat user base ranked number 5 in 2014 but reached 890 million in 2016, more than the combined population of US, Japan and Russia. WeChat has become so influential in China that western fashion brands could no longer turn a blind eye to its phenomenal growth. 

So far, Burberry, Cartier and IWC have already set up online stores with WeChat, Longchamp started selling bags and clothings, Givenchy and Dior are actively using flash sale to test consumer demands. Michael Kors on the other hand has chosen to launch an official app to streamline its customer service process. Prada CEO Patrizio Bertelli said in a recent interview:“We hope to convert our influence on social media to sales through channels like WeChat.” Even Celine, a brand most resistant to digital transformation relented by openning its official WeChat public account.

Swarovski presented a perfect case study for WeChat platform during the last Christmas season. After releasing new adverts via WeChat, it not only increased consumer participation and improved brand recognition, but also successfully increased sales in China. Furthermore, a specially crafted calendar gift box consisting of three full-price products and twenty one free gifts selling for US$458 was sold out within ten days on WeChat. This is not the first time Swarovski tested water on WeChat. On last year’s Mother’s Day it placed a one-click shopping link inside Mother’s Day gift guide (in WeChat public account article) and aired HTML5 interactive adverts through an app.

For Christmas, Swarovski displayed a QR code at its brick-and-mortar stores with a link to WeChat ads to increase offline sales and raise awareness of the brand’s WeChat account. Consumers who “liked” Swarovski WeChat account received a reward and those participating the promotion or sharing it with friends got a special present from the brand. According to Luxury Society, as many as two thirds of consumers who liked the account took part in this promotion.

As a social media software backed by enormous ecosystem, WeChat can meet most needs of everyday life by combing all of the social functions in one place, such as group booking movie tickets or booking a cab, paying utility bills, booking doctor appointment, train ticket and shared car ride and shopping. WeChat has extraordinarily strong users stickiness and high rate of usage that is no where to be matched by other pure shopping apps, rapid growth of active users’ numbers plus proliferation of payment function don’t fail to catch the imagination of retailers. Some analysts are convinced that if used properly, the platform’s unique characteristic of sharing information within and among selected circles was a perfect fit for the promotion of luxury brands via new media. In addition, unlike PC platform and app, WeChat’s strong interactiveness makes it much easier to achieve O2O (Online to Offline)  integration.

But from luxury brands’ perspective, WeChat might not be a suitable long-term partner. Both Alibaba and JD had set up their own luxury platform helping brands directly sell to consumers and hire luxury consultants to establish lasting relationship with them. In comparison, luxury brands mostly did one-off promotion on WeChat to test the result. A 2017 luxury report indicates that only 8% of the top 89 luxury and jewellery brands had made some appearance on WeChat in Q2.  According to another analyst, most of these brands venturing into WeChat was only engaged with one-off flash sale event, as brands are not yet sure about the expandability of the platform. Selling on WeChat is no doubt becoming increasingly more popular but nevertheless seems to be limited by the methods used.

For those luxury brands that recently launched e-commerce business in China, WeChat is a good choice in promoting small-scale sales, but setting up online store on Tmall or JD or their own online store is still the “conventional” business model western brands feel very much comfortable with.

Leave a Reply

Your email address will not be published.