As the Chinese luxury market booms toward never-before-seen dimensions, many Western brands now believe it to be a pot of gold. Over the past few years, many of them, including Louis Vuitton, Hermès, and Ralph Lauren, have massively increased their presence in China by opening new stores across the country and expanding deeper into smaller Tier-3 and Tier-4 cities.
At the same time, many brands expanded their digital capabilities, including Gucci’s launch on Little Red Book and the short video platform Douyin, Louis Vuitton’s K-pop collaboration, and countless KOL integrations. All of it is meant to reach a much younger, dynamic, and affluent target group.
However, there is a big difference between playing to play in China and playing to win. While some top brands have dramatically stepped up their local digital capabilities, the sheer speed of change within China’s digital ecosystem is challenging for Western brands that must create relevant content and connect with local customers in real-time.
The same holds for in-person retail, where Chinese customer expectations of top-notch, personalized services have eclipsed what brands are doing in other markets. It is no longer enough to simply think of digital acceleration or omnichannel excellence. Instead, brands have to create an ecosystem around their customers where they serve them independently at their favorite brand access points with extreme speed, competence, and proactivity.
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