1ST QUARTER, 2017
China leads the way in e-commerce for luxury
E-commerce is changing rapidly in China as the boundaries between online and offline are being blurred and new technologies come to the fore.
Over 150 luxury industry executives from brands such as Dior, Swarovski, Bulgari, and LVMH took part in the second edition of the Luxury Society and Digital Luxury Group-hosted Luxury Society Keynote event in Shanghai last month.
Speakers at the event noted that augmented reality, virtual reality, and livestreaming are key technologies now being used in China. Brands are shifting their focus to appeal to millennials, who are seeking experiences and emotional connection as well as content.
World News
Korean retailers pessimistic about 2017 industry prospects
South Korean retailers’ business sentiment plunged to the lowest in four years in the first quarter of the year, affected by a protracted slump in domestic demand and the implementation of an anti-graft law.
The retailers’ business sentiment index stood at 89 in the January-March period, the lowest since a reading of 81 was posted in the first quarter of 2013, according to the data compiled by the Korea Chamber of Commerce and Industry.
The data were based on a survey of 1,000 retailers in Seoul and six other largest cities. A reading of under 100 means pessimists outnumber optimists.
Large-scaled retailers, convenience stores and department stores painted a gloomy picture of their business down the road, while Internet shopping malls and home shopping operators offered a relatively rosy outlook for their business, the survey showed.
They expected a slowdown in sales and increased competition, which will lead to a drop in their profitability. Tight cash flows and increased regulations were also cited as key risk factors for their business, it showed.
The Korea Chamber of Commerce & Industry said China’ s alleged economic retaliation against South Korea’ s decision to deploy a U. S missile defense system on its soil, coupled with the anti-graft law that took effect late last year, will affect retailers’ business performance.
Last week, the Bank of Korea( BOK), the country’ s central bank, cut its economic growth forecast for this year to a growth of 2.5 percent, from 2.8 percent projected in October, citing a slump in domestic demand.
The BOK said the South Korean economy could continue its moderate growth this year driven by improving exports and facility investments, though it said private consumption and construction investment will remain weak throughout the year.
The quarterly revision by the BOK also came amid political uncertainties following the parliament’ s impeachment of President Park Geun-hye over a corruption scandal involving her confidante.
For the whole of 2015, the economy grew 2.6 percent, much lower than the 3.3 percent growth the BOK forecast a year earlier.
Retail in Asia, 01 / 2017
DLG China Partner & Managing Director Pablo Mauron put it succinctly:“ The millennial generation in China, which already accounts for 300 million people, seeks experiences and emotional connection, they’ re not just a bystander.
Social media is another key tool to reach and engage customers in China, with WeChat a particularly significant medium. Four Seasons Hotels Director of Marketing in Asia Pacific John Hamilton said customer relationship management on social media allowed for highly-targeted messaging and engagement.
The Luxury Keynote event also explored the impact of celebrity and key opinion leader partnerships in China. Easy Entertainment Commercial Director Qing Dai said there were many success stories where luxury brands had been paired with appropriate celebrities, with a recent example being Cartier’ s collaboration with Lu Han.
Retail in Asia, 01 / 02 / 2017
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