Video App Douyin is helping luxury brands reach Chinese consumers

Video App Douyin is helping luxury brands reach Chinese consumers

We can pretty much agree the Digital Lifestyle tailwind continues to change consumer behavior and shake up how companies do things. Early on it was with commodity items – books, CDs, DVDs, and the like – but as consumer became increasingly comfortable with digital shopping and the quick delivery times, the kinds of products they are buying online has expanded wildly. This includes luxury goods and this has also spurred luxury goods companies to increasingly adopt digital platforms to not only sell their wares but also reach potential buyers.

Nowhere is this more evident in China, which is one of the drivers of not only our Rise of the New Middle-class investing theme but also our Living the LIfe one that focuses the demand for luxury goods and services. When one video app has more monthly users than the entire population of the U.S., with a target rich demographic, it stands to reason that companies, be they luxury product ones or something else, will want to reach that audience.

 

Douyin, a hip short video app that is popular among China’s young social media users, has hit the radar of luxury marketers.

Despite some critics’ concerns that the app’s mass-facing content could diminish luxury brands’ prestigious image, that hasn’t stopped leading players like Christian Dior, Louis Vuitton, and Chanel from placing advertisements on the platform.

Christian Dior, one of the earliest adopters from the luxury sector, is highly bullish on using Douyin. “Douyin has the user base, who are young, female-oriented with high-spending power,” a spokesperson for the French luxury brand China division told Jing Daily. “They are the right people who luxury brands must acquire and retain in the longer term.”

 

The latest statistics released by Douyin CEO Zhang Nan (张楠) on January 15 indicated the app’s number of daily active users (DAU) reached 250 million and the monthly active users exceeded 500 million. Previous data also showed around 60 percent of Douyin users are female, and about 70 percent of them reside in China’s top-tier cities.

 

In recent months, Douyin has also started to expand its e-commerce functionality to further support brands and retailers to capitalize on their traffic. Christian Dior, for example, added a store on it, allowing app users to place orders there. In Chanel’s advertisement campaign, that account also added purchase links within videos to facilitate consumption.

Source: Is China’s Hottest Video App, Douyin, the New WeChat for Luxury? | Jing Daily

About the Author

Chris Versace, Chief Investment Officer
I'm the Chief Investment Officer of Tematica Research and editor of Tematica Investing newsletter. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."

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