Watches & Wonders Live in China；Sequoia China Teams Up With Starbucks | Luxe.Co News Brief, Issue 3 of 2020

Brand

Starbucks Invests In Retail Innovation in China, Strikes A Strategic Partnership with Sequoia Capital China 

Starbucks China has announced a strategic partnership with Sequoia Capital China to focus on the new generation of restaurants and retail technology. In this partnership, Starbucks will actively explore digital innovation opportunities across all aspects of its retail business. These include, but are not limited to, looking for creative solutions; strengthening business operations with data-driven analysis and models; managing the growing retail business in China with machine learning and intelligent forecasting; and optimizing the Starbucks supply chain through accurate real-time inventory management. (Source: Sequoia Capital China)

Neil Shen, Founding and Managing Partner of Sequoia Capital China (upper left)

Kevin Johnson, President and CEO of Starbucks (upper right)

Belinda Wong, Chairman and CEO of Starbucks China (lower left) and others attended the online launching ceremony. 

“Watches & Wonders” Shifts to Virtual by Cooperating with Tmall

The Watches & Wonders & Tmall Online Exhibition was held from April 25 to 29, and was jointly organized by the Fondation de la Haute Horlogerie (FHH), Richemont, and Alibaba. It was hosted on the Net-a-Porter Tmall flagship store.

Watches & Wonders, which has historically only admitted industry insiders and VIP customers, is considered the most difficult closed-door watch show. Breaking the 30-year tradition, the exhibition was fully open to the public for the first time. The brand lineup was exceptional, including nine brands under the Richemont Group: Cartier, A. Lange & Söhne, Baume & Mercier, IWC, Jaeger-LeCoultre, Panerai, Piaget, Roger Dubuis, and Vacheron Constantin. About 800,000 people watched the first day of the exhibition as of 6pm on April 25.

The success of this online exhibition sends a strong signal that the digitization of the "hard luxury" industry is accelerating. According to Bain & Co., the share of online luxury sales will grow to 25 percent by 2025. The particular crisis brought about by COVID-19 has also demonstrated the importance of online business to secure sales. The means of recovery for the luxury watch industry in the China market may also be the beginning of a long-term shift to online business in the future.

The latest report from the Federation of the Swiss Watch Industry shows that in March, due to the COVID-19 outbreak, Swiss watch exports fell by 21.9 percent year over year to 1.36 billion Swiss francs. Swiss watch exports to mainland China bucked the trend by growing 10.5 percent.

E-commerce

In Q1 2020, L’Oréal Group’s E-commerce Sales in the APAC Region Grew By More Than 60 Percent, With the China Market Up by 6.4 Percent

The French beauty giant L’Oréal Group reported key financial figures for Q1 2020, with sales down 4.8 percent from a year earlier. But L’Oréal Group’s e-commerce sales in the APAC region grew more than 60 percent, driven by markets such as China, Japan, Australia, Thailand, and Indonesia. The China market bucked the trend and grew by 6.4 percent -- in the next April-June period, revenue in China is expected to grow by more than 10 percent.

Armani Launches Its Newly Upgraded Official Chinese Website

Armani has just launched its newly upgraded official Chinese website with more features that are in line with the consumption habits of Chinese users. Consumers can buy men's and women's ready-to-wear, bags, shoes and accessories directly from the website. WeChat Pay and Alipay payment options have also been added as available payment methods for use by Chinese customers. In addition, consumers can watch videos of the Armani fashion week shows on the website.

Delvaux Embarks on Its E-commerce Journey via JD.com

On March 5, Delvaux officially opened the first online flagship store in the brand's history on JD.com, marking an important step in implementing a multi-channel strategy in the China market. It's also worth noting that all items on Delvaux's official flagship store will be in line with the physical store, with the Delvaux Memorable Anniversary collection, the new Spring/Summer 2020 collection now on JD.com, and even the New Year limited edition.

In addition to Delvaux, luxury brands such as Prada, MiuMiu, Mulberry, Salvatore Ferragamo and Tod's have also opened online stores on JD.com in the past two years.

Japan's Largest Furniture Chain Brand NITORI Officially Opens Its Flagship Store on JD.com

Japan’s largest furniture chain brand NITORI has officially opened its flagship store on JD.com. On the opening day, nearly 1,500 furniture products were launched online with nationwide distribution. To ensure that Chinese consumers enjoy excellent quality and reasonable prices, the NITORI official flagship store sells everything at the same price as in Japan. In terms of furniture delivery, NITORI is cooperating with JD logistics to provide efficient and secure delivery services to consumers nationwide.

NITORI's vision for the future is "to open 3,000 stores globally by 2032 and expand in China", and working with JD.com is an important step towards this goal.

Offline Channel

Shopping Mall Marketing Campaigns Across China Hit The 'Reset Button'

After the lockdown was lifted, traffic flows in major shopping centers have recovered to a certain degree. Nevertheless, offline consumption is still significantly lower compared with the same period last year. In order to further stimulate consumption, more and more shopping centers are restarting their marketing activities. These marketing activities mainly include art exhibitions, IP exhibitions, promotion marketing, and online runways.

The marketing activities primarily have the following characteristics:

- The themes of spring, hope, and nature.

- The goal of promoting food consumption with vouchers, food festivals, and the like.

- Offline marketing activities coordinated with online activities through live stream platforms and social media.

- The goal of attracting consumers with the help of strong brand recognition.

Acne Studio Opens A New Store in Hangzhou, China

The Stockholm-based fashion house Acne Studios is actively investing in a network of boutiques in China’s affluent second-tier cities. Following the launch of a store in Nanjing, the brand has landed in Hangzhou, opening a store at Hangzhou Tower. The new Acne Studios store carries the brand’s full range of men’s and women’s apparel, accessories, shoes, and bags.

LOEWE, Balenciaga, lululemon, and Others Open Their First Stores in Kunming in Southwest China

Spanish luxury brand Balenciaga opened its first store at Kunming Spring City 66 Mall on April 12. Spanish luxury fashion house LOEWE opened its first boutique at the same mall on April 25. Canadian athletic apparel brand lululemon also opened its first Kunming store at Kunming Spring City 66 Mall, its 29th store in China. Kunming Spring City 66 Mall has secured a large number of first stores to Kunming in the early days of its opening, with over 30% of the first-store brands in the city.

| Editor: Maier