Screenshots of Clinique’s WeChat account.
With many of their fortunes tied to Chinese consumers, global luxury brands are faced with a slowing economy, infeasible store expansions, and an increasingly sophisticated and traveling customer. Long holdouts, luxury brands in China are being forced to turn to digital as a source of growth in the domestic market and as a tool to capitalize on cross-border shoppers.
WeChat is known as China’s fastest growing social mobile platform, boasting 600 million users and seemly new features being rolled out most months. With sophisticated capabilities for personalized accounts, WeChat also has rich potential for customer relationship management in the form of loyalty programs, in-app e-commerce, and live chat.
However, the majority of luxury brands in China are not using the platform to it’s full potential. L2’s Digital IQ Index showed few of the leading luxury brands actually took advantage of the more advanced client management features and the report highlighted how the brands simply used WeChat like they use Twitter, Facebook, and Instagram in the West and therefore were missing the benefits of many WeChat features.
The L2 reports, “Luxury China 2016” and “Beauty China: WeChat” offer some valuable insights about how Western brands are leveraging WeChat. These reports suggest that the WeChat app is mainly used as a “branding platform” for this sector as brands take advantage of its programming features. With 73 percent of beauty labels relying on four-post-a-month service accounts (rather than subscription, which allows one a day), this sector is particularly active with a focus on new campaigns to encourage user engagement.
For example, just 17% of Fashion brands and 16% of Watches & Jewelry brand 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.
Further, a total of 51% of the brands incorporate sampling, while the same percentage utilizes gamification in their WeChat accounts to engage followers. For example, the report highlights Estée Lauder’s “EyeQ” campaign, which featured an interactive “diary” of supermodel Liu Wen highlighting her favorite products and gave readers the chance to complete a quiz to win a gift.
Many beauty brands are also utilizing the app for CRM, with a total of 59 percent of them featuring WeChat loyalty programs. One of the best loyalty programs, according to the report, is that of L’Oréal Paris, which is featured in a report case study. As one of the most active beauty brands on the app, L’Oréal offers fans a loyalty program that spans its WeChat account, website, Tmall shop, and mobile app, rewarding fans with points for both online and offline purchase.
The report notes that Chinese beauty brands tend to have the most robust WeChat accounts, with 80 percent featuring a loyalty program—compared to less than half of Western brands. In addition, Chinese brands are better at integrating WeChat into their existing loyalty program while also connecting it to their Tmall shop. Clinique is listed as another Western brand with a strong loyalty program, allowing fans to earn points through interacting with the account.
When it comes to e-commerce on WeChat, L’Oréal and Benefit stand out among the pack of foreign brands, which is one area where L2 finds beauty brands are lagging. The brand is among only 20 percent of beauty companies to host a WeChat store or offer WeChat payment, despite the fact that “there are indications” that a WeChat store “should be considered along with brand sites and e-tailer platforms as central to any China e-commerce strategy,” says the report.
Several brands highlighted in the reports are identified as having the 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 incentivize 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.
So although WeChat is firmly held as a key platform for brands, it would seem the marketing practice is not matching the rhetoric in most cases.