May 31, 2016
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Most luxury brands have WeChat but fail to reach Chinese consumers, says report

May 31, 2016

Most global luxury brands now have a WeChat account, says a new report. While the number has grown considerably since 2014, the industry still has much work to do to reach Chinese consumers.

Burberry is engaging well as a foreign luxury brand on China's WeChat

According to research firm L2 - and the recently released China luxury 'Digital IQ Index' - 92 percent of luxury brands are on WeChat, an 87% increase since 2014, when only around half of all brands had joined the platform.

Brands are also in tune with China's top mobile messaging app Weibo, which features profiles for 94 percent of global luxury brands.

However, the latest Digital IQ Index reported pointed out that most brands use the app as an awareness platform (similar to how they use Twitter, Facebook, and Instagram) therefore missing the benefits of its many features.

This includes push notifications, geolocation capabilities, e-commerce, and more sophisticated customer service capabilities like multiple agents and auto-reply functionality, said the report.

Some 77 percent of luxury brands opt for feature-friendly service accounts, yet less that 10 percent of luxury brands in both the fashion and watches and jewelry categories have links to online e-tailers or WeChat pay. 

Links to a direct-to-consumer e-commerce site are rare too, with only 30 percent of fashion brands and 23 percent of watch and jewelry brands featuring one on their site.

The report went on to say that only 17% of fashion brands and 16% of watches and jewelry brands offer loyalty programs through WeChat and less than 10% of brands in both categories leverage WeChat coupons and payments. These are "missed opportunities" as WeChat Pay reports more than 300 million users.

Adoption of customer service features lag as well. Just 13% of brands in the Index are manually responding to inquiries; 66% use auto-reply. Watches & jewelry brands have been the most receptive to manual replies – 44% have adopted the feature.

The report, however, praised several luxury brands who demonstrate best practices on WeChat. Burberry, for example, sends voice messages with the voice of Wu Yifan to promote a collaboration with the brand ambassador in Burberry’s London Fashion Week show.

Samsonite runs a lottery awarding free products to motivate users to share brand-related content.

Chinese jewelry brand Chow Tai Fook has a dedicated loyalty section where users can check loyalty points, coupons, orders, and sign up for brand activities.

Chaumet offers appointment booking on WeChat, a service unavailable on the brand site.

And Trollbeads is one of two luxury brands to have a WeChat store using WeChat Pay.

L2 said the top 10 most-viewed posts by luxury brands on WeChat included celebrity, lifestyle content, holiday greetings, product promotions, and coupons.

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