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China’s Crackdowns Could Make Luxury Marketing a Lot More Boring in 2022


The Chinese luxury market remained a rare bright spot for many global brands over the last 18 months, but it now finds itself in a tumultuous place as the fourth quarter of 2021 approaches. Beijing began the year with an antitrust-focused crackdown on domestic tech giants and moved to an emphasis on tightening controls over data security, roping in the biggest names in tech including Alibaba, Tencent, Meituan, and Didi.


As noted in the recent Jing Daily and Wunderman Thompson Intelligence report, Transcendent Retail: APAC, the government’s scrutiny is spreading more broadly to the platform economy, with new rules issued in February 2021 by the State Administration of Market Regulation specifically targeting tech firms, and numerous reports of fines being levied against companies for anti-competitive practices. And while these moves are unlikely to dislodge any of the giant players, they will require such players to work much harder for future growth, rather than relying on their market power.


Vey-Sern Ling of Bloomberg Intelligence told Wunderman Thompson Intelligence, “Alibaba, Tencent, Meituan, Pinduoduo, and JD.com have already signaled plans to increase investments substantially in the coming year. This means sacrificing profit to benefit users and merchants, driven by a need to compete in a different way.”


Since the launch of Beijing’s tech crackdown earlier this year, the Chinese government has turned its attention to a wider range of concerns, and these have major implications for international luxury brands. Increased regulation of sectors where luxury brands have invested heavily in marketing to Chinese consumers over the past year, such as livestreaming and gaming, indicates that brand optimism in using new online platforms may have been somewhat premature. And what that means is that we may be set for a 2022 in which luxury marketing in China gets a lot more boring, with brands hamstrung about what they can say, where they can say it, and who they can get to say it for them.


Read More at https://jingdaily.com/chinas-crackdowns-could-make-luxury-marketing-a-lot-more-boring-in-2022

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