1、1 2 Key outputs Sample size Tencent x BCG luxury consumer group insight study Tencent AMS platform Tencent platform users survey responses Chinese consumers interested in luxury goods 1,500 consumers (true- luxury buyers in past 12 months) True- luxury consumer group profile and digital behavior Lux

2、ury touchpoints and purchase pathway; category differences Insight source Tencent insightConsumer survey 3 Copyright 2019 by Boston Consulting Group. All rights reserved. Backup: This report focuses on the true- luxury categories listed below, and excludes accessible luxury, fragrances and cosmetics

3、 Personal luxury goods CategorySub-categoryThreshold price 1. Handbags 1 Handbags1,000 each 2. Shoes 2 Shoes350 each 3. Accessories 3.1 Sunglasses180 each 3.2 Scarves/small leather goods180 each 4. Ready to wear 4.1 Outerwear/ coats1,400 each 4.2 Dresses1,200 each 4.3 Suits1,600 each 4.4 Sweaters /

4、knitwear400 each 4.5 Shirts / Topwear200 each 4.6 Jeans / pants / skirts250 each 5. Watches 5 Watches2,000 each 6. Jewelry 6 Jewelry1,200 each 4 Copyright 2019 by Boston Consulting Group. All rights reserved. Contents 01. Insights into Chinas true- luxury consumer 02. Technology ecosystems re-shapin

5、g luxury marketing in China 03. New capabilities, new beginning 5 Copyright 2019 by Boston Consulting Group. All rights reserved. In 2018 Chinas luxury market exceeded 110 B, 33% of the global market, and is growing at 6% Note: Including purchases abroad; Including leather accessories, apparel, watc

6、hes and jewelry, fragrances and cosmetics Source: BCG Luxury Market Model Chinese personal luxury market maintains 5-6%growth CAGR True luxuryAccessible luxury 69% 73% 27% 28% 98 28% 73% 2015 72% 20162017 28% 72% 2018 32% 2025F 95 105 111 157-164 +4% +5-6% B, retail value 222 241 334 164 (41%) 111 (

7、33%) Rest of world 20182025F China 405 74% of global growth China will contribute 41%of global luxury consumption by 2025 B, retail value 6 Copyright 2019 by Boston Consulting Group. All rights reserved. Among true- luxury goods, ready-to-wear, watches 2. true luxury only, excluding perfumes and cos

8、metics Source: BCG X Tencent Luxury Study, 2019 Purchase penetration among luxury consumers1（%） 4261504454 24% Shoes 6 Ready-to-wear 23% Total 2 Watches the rest 27% are widely dispersed in over 2,000 lower tier cities Chinese true- luxury consumers can be classified into 9 segments. Absolute luxure

9、r, Megacitier and Rich Upstarter represent the 3 largest segments; collectively they contribute 46% of sales The path to purchase happens digitally. On average, 60% of the 4-5 touchpoints before final purchase are online; for handbags, the number of digital touch points for handbags is as high as 6-

10、7 Social media influence remains strong: 50% of consumers are influenced via the WeChat ecosystem; Chinese consumers prefer a highly curated, personalized social experience KOL is a key influence on consumers aged below 30; KOLs are becoming more diverse in their online personalities and their conte

11、nts older consumers core for handbags and watches 2.Touch points exposed per stage by a luxury consumer； 3. Proportion of digital touch points among all touch points Source: BCG X Tencent Luxury Study, 2019 Average touch points2 % of digital Touch points3 60% 5.0 Discovery 69% 4.1 Research 1.0 12%1

12、Purchase 1.0 10%1 Delivery 66% 2.5 Aftersales 15 Copyright 2019 by Boston Consulting Group. All rights reserved. Extremely complicated purchase pathway for handbags and shoes; highly digitalized discovery and research 4 1. Proportion of digital touch points among all touch points Source: BCG X Tence

13、nt Luxury Study, 2019 DiscoveryResearch 4.3 2.7 10.0 6.4 8.0 58% Avg. touch points% of digital touchpoints1 55% 63% 62% 64% Accessories RTW 2.2 3.4 6.9Shoes Watches/ jewelry Handbags8.1 5.1 Avg. touch points 71% 63% 69% 69% 73% % of digital touchpoints1 16 Copyright 2019 by Boston Consulting Group.

14、All rights reserved. Social contents and digital media draw 50% of attention; offline creative marketing gaining traction 5 1. Primarily Moments ads and OTV ads；2. Including short videos and other social media Source: BCG X Tencent Luxury Study, 2019 14% 100% 7% 8% 11% 15% 10% 10% KOL (on WeChat/ We

15、ibo/Red) Digital impression- based advertising1 Brand Social Media (WeChat and Weibo) Total 3% Third party ECTVC/Print/ Event/OOH Other social media2 3% Brand web and mini- program 20% StoreOffline word- of mouth Online word- of-mouth Organic traffic:20% Social content traffic: 24% Earned traffic:25

16、% Offline marketing:10% Online / mobile Offline Other digital media traffic:22% Strong increase，5% Increase of online WOM, including friends moment ads/chats, communication with sales assistant and customer service Discovery touchpoints by consumer attention Trend vs. 2018 Driven by offline creative

17、 marketing, i.e. fashion show, exhibition and innovative OOH marketing 17 Copyright 2019 by Boston Consulting Group. All rights reserved. During discovery and research, over 60% of the online touch points are on social media 5 1. Proportion of luxury consumers who were exposed to online touch points

18、； 2. Proportion of luxury consumers who were exposed to social media Source: BCG X Tencent Luxury Study, 2019 Discovery What triggered your interest in the product？ Discovery - % of luxury consumers Research Through which channels did you do research before making your purchase decision？ Research -

19、% of luxury consumers 83%69% Online touch point penetration1 Social media penetration2 84%67% Online touch point penetration1 Social media penetration2 18 Copyright 2019 by Boston Consulting Group. All rights reserved. WeChat is the most used social platform during discovery and research, followed b

20、y Weibo and RED 5 1.Base is all luxury consumers, numbers represent % of consumers who were exposed to the channel; 2. includes WeChat Mini Program, WeChat Official Account and WeChat moments of friends/sales assistants Source: BCG X Tencent Luxury Study, 2019 Discovery - % of consumers1 RED WeChat

21、ecosystem 2 Weibo Short videos 43 29 Others 35 3 3 19 Short videos WeChat ecosystem 2 Weibo RED Others 52 28 7 5 What triggered your interest in the product? Through which channels did you do research before making purchase decision? Research - % of consumers1 19 Copyright 2019 by Boston Consulting

22、Group. All rights reserved. Consumers increasingly prefer personalized social networking driven by unique digital ecosystems 5 Source: Desk research, BCG analysis Commute LunchDinner Evening Kid pick-upTea break BreakfastBedtime Commute LunchDinner Evening Tea breakKid pick-up BreakfastBedtime 20082

23、018 Undifferentiated mass social networking focused on information distribution More personalized, digitized 24/7 social networking occasions 20 Copyright 2019 by Boston Consulting Group. All rights reserved. More than 70% of consumers, mainly those young consumers aged below 30, are highly influenc

24、ed by KOLs 6 Source: BCG X Tencent Luxury Study, 2019 Fashion blogger None of the above Celebrity/ supermodel 21 OthersGrassroots celebrity 42 10 2 25 Fashion bloggers Many have started own e-commerce businesses via WeChat Mini Programs Some have launched collections in collaboration with brands, e.

25、g. Mr. Bag X Tods Celebrities and supermodels Rather than the traditional images, celebrities and supermodels with more down-to-earth and approachable fashion styles are gaining popularity Grassroots celebrities Grassroots celebrities are exploding, thanks to the growth of multi-platforms (WeChat ec

26、osystem, RED, ByteDance, etc.) that maximize followers Trends of fashion KOL Which type of fashion influencer has the highest impact on you? ? 21 Copyright 2019 by Boston Consulting Group. All rights reserved. More diverse types of fashion bloggers, stars and grassroots celebrities, and more fragmen

27、ted social media content 6 Source: Desk research, BCG analysis Global FitnessFood brand pop-up stores also help boost sales 8 Through which channel did you purchase your most recent luxury product? (Single choice) Daigou 43% 12% Overseas offline travel retail Domestic online 12% 32%Domestic offline

28、Source: BCG X Tencent Luxury Study, 2019 Purchase channel break down（%） 10 1516 13 11 15 16 17 17 13 19 20 21 60 72 65 49 46 Overall 4 Shopping mall 1 BJ/SH/ GZ/SZ Department store Tier 1 Brand pop-up store Tier 2Tier 3 brand own E-com (e.g. through Mini Program) is on the rise, currently 1/3 of tot

29、al online 10 12% 12% 43% 32%Domestic offline Domestic online Daigou Overseas offline travel retail Brand self-run E-com 2 E-com platforms 1 33% 35% Multi-brand platforms3 32% Luxury online sales is still at its infancy, consumer purchase penetration hasnt yet made a significant breakthrough Brand-ow

30、ned online channels growing fast, driven by the rise of brand WeChat Mini Program and Official Account Purchase channel break down（%） Through which channel did you purchase your most recent luxury product? (Single choice) Source: BCG X Tencent Luxury Study, 2019 27 Copyright 2019 by Boston Consultin

31、g Group. All rights reserved. Contents 01. Insights into Chinas true- luxury consumer 02. Technology ecosystems re-shaping luxury marketing in China 03. New capabilities, new beginning 28 Copyright 2019 by Boston Consulting Group. All rights reserved. Continued increase in digital marketing spend Ke

32、y observations Increase of digital marking spend driven by social media and e-commerce platforms (%)Trend Note: More than 10 luxury brands covered Source: Expert interviews, BCG analysis 50-60% 40-50% Digital Traditional 100 Trend(%) 2018 luxury marketing spend breakdown Spend on social media market

33、ing keeps rising Diverse social media platforms Rich and visualized media format Noticeable spend on e-commerce platform Mainly for brands with e-commerce on platform Stable investment in More in WeChat ecosystem, i.e. Official Account and Mini Program Minimal spend on search engines or other digita

34、l media 10-20 40-60 5-10 5-10 Social Media Others 5-10 5 E-commerce B Editorial Search 100 29 Copyright 2019 by Boston Consulting Group. All rights reserved. Traditional marketing spend shifts to digital Key observations More investment in exhibitions and events to create social buzz and promote bra

35、nd spirit I.e. Volez, Voguez, Voyagez by Louis Vuitton, and Mademoiselle Priv by Chanel Investment in pop-up stores seems to drive both higher traffic and sales conversion Consumers are willing to share pop-up store experiences on social media Other traditional channels stagnant Print continues to d

36、ecline OOH requires more innovation in media format and interactive experiences Pop-up store and PR event the growth drivers of traditional marketing (%) 5 Print OOH PR/event 30-35 30-40 10-20 10 100 Pop-up store TV Trend Note: More than 10 luxury brands covered Source: Expert interviews, BCG analys

37、is Traditional40-50% 50-60%Digital 100 Trend(%) 2018 luxury marketing spend breakdown 30 Copyright 2019 by Boston Consulting Group. All rights reserved. As investment in digital marketing increases, luxury brands need to understand how to do it efficiently Data drivenSocial mediaOmnichannel 31 Copyr

38、ight 2019 by Boston Consulting Group. All rights reserved. Data driven: analyze consumer group profiles and needs to make data-driven marketing decisions Business data integration Real-time monitoringResult quantification Integrate business data across online and offline touch points, holistically m

39、anage business data along the pathway (from discovery to purchase and after sales) Integrate domestic and overseas sales data for Chinese consumers to do better CRM Advertising data monitoring, i.e. conduct A/B test together with marketing activities, to monitor marketing efficiencies Leverage data

40、results to adjust marketing spend in an agile manner Quantify results, optimize and make timely adjustments to marketing spend across touch points 32 Copyright 2019 by Boston Consulting Group. All rights reserved. Montblanc: utilized oCPA to improve WeChat followers recruitment efficiency Montblanc

41、continuously uses oCPA to recruit WeChat followers, and modify creative content. Cost for fans is MUCH LESS THAN industry average oCPA for followers For more Click For more WeChat Followers For more Sales Conversion 33 Copyright 2019 by Boston Consulting Group. All rights reserved. Social media: com

42、panies need to excel in four dimensions to achieve efficient social media marketing Source: BCG analysis Obtain customer group profiles, including demographics, emotional needs, fashion sophistication level, via internal CRM and media advertising data Manage and distribute varied content across diff

43、erent target consumer segments Accurate consumer group targeting In-depth understanding of potential partners follower base via big data to help build the most suitable media/IP/KOL mix Maximize marketing investment and efficiency through real-time monitoring and adjustment of media campaign The rig

44、ht media partner/KOL For new customers or customers have no access to offline stores, the roles of social media platforms range from discovery/research to purchase and aftersales For existing customers, social media platforms are a connecting point, allowing brands to conduct consumer analysis to he

45、lp offline stores better serve customers Consumer touch points expansion Rapid generation and distribution of content suitable for social media, i.e. for consumers with short attention spans and exposed to constantly changing hot topics Content with diverse perspectives (i.e. localized content) to t

46、arget desired consumers Try interactive technologies and encourage UGC content and social sharing Content creation optimization 34 Copyright 2019 by Boston Consulting Group. All rights reserved. Hermes: used ads retargeting on WeChat to provide customized content and closed-loop omnichannel experien

47、ce Customize interaction with branded product Customized silk mixClose-loop experienceAds retargeting Retargeting based on phase 1 engagement 1st practice leveraging mini-program data O2O experience WeChat ad Social sharing Event reservation Reminder Redemption Interaction on mini program Automatica

48、lly push reminder to users via SMS or service message on WeChat Generated 15,000+ songs, 43s staying per person Triple engagement rate of phase 1, engagement rate of mini-program group reaches 28% 87% mini-program traffics are driven by WeChat ads; 3500+ persons reserved event, 60% are from online T

49、arget on potential groups WeChat close-loop service enables O2O traffic driven Chinese Internet Valentines Day Mini Program Pop-up Store Haoran Liu Fans Economy Limited Edition Gifting Occasion Modern Keys Price2,500 Sold out in 6 days Like Rate 6xavg. Engagement Rate 3xavg. Tiffany: pop-up store for limited edition drives business effectively Click Interactive Gesture Hidden Pop-up Page Feel the charm of “Clash” Lead to Official EC Canvas Campaign Page Deliver Brand Spirit CTR is 6.0 xindustry averageCT