Burberry And Tencent Join Forces To Attract More Customers In China

A partnership with the Chinese tech firm Tencent has been struck by British luxury brand Burberry with the aim of initiating a new and aggressive digital marketing and sales strategy for attracting customers in Chinese market who is characterized as being very tech and social media savvy, Burberry said on Thursday. China is a critical market for most luxury brands of the West.

Within the first half of next year, technological assistance will be taken from Tencent by Burberry for developing and starting a so-called “social retail” store in Shenzhen which is also known as the technology hub of China, Burberry said. The concept of the “social retail” store entails blending of the retail and social media characteristics to develop digital and physical spaces which the company feels will be innovative and be able to attract customers. The company however gave very little details about the concept.

Tencent offers Burberry a one-stop shop for marketing and selling its products online and in stores because it owns and operates the very popular Wechat Pay online payment platform as well as the social media platform Weibo in China which has a significant clout in China – one of the largest markets for luxury products in the world. Tencent’s Wechat is China’s dominant chat app.

“Social media is becoming such an important part of the luxury customer journey, particularly in the inspiration phase, and retail needs to keep pace with this,” Burberry Chief Executive Marco Gobbetti said in a statement. “China was the obvious place to start as it is one of the leading hubs for innovation and technology and Chinese consumers are some of the highest users of social media.”

Hong Kong –outside of the Mainland China and a city that has in recent times been facing political trouble that has seen a reduction of tourists and where business has been rattled, is the place where luxury shoppers from Mainland China usually go to purchase luxury products because of a weaker yuan. However the recent political turmoil in Hong Kong has forced shop closures resulting in drop in luxury shopping.

In its latest earnings released on Thursday, Burberry posted double-digit declines in Hong Kong sales even though company noted that its overseas sale was boosted by the popularity of collections by designer Riccardo Tisci. Burberry is known for its traditional tartan patterns. Analysts see this as the reason for Burberry to focus on Mainland China.

The lucrative luxury goods market of China is also being eyed by Chinese retail giants such as Alibaba and JD.com as both the companies have drawn up strategies to penetrate the market. Both the companies launched their luxury sites in mid-2017 that offer international brands such as Hugo Boss.

(Adapted from Reuters.com)

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