China is a unique market. For luxury brands, a WeChat-focused strategy is a crucial step to gaining a foothold.
While China’s social landscape is complex and highly segmented, WeChat remains the go-to place for brands to acquire, communicate with, and maintain customers. The superapp has gained a reputation as being a center for brand marketing (luxury or not) thanks to its more than one billion users and plethora of services.
While the luxury market is centered on offline sales, online marketing, and digital communication with users significantly influences purchasing intent among customers. By using WeChat features, brands can engage with users and send content to followers while also giving access to loyalty schemes and promotions.
Digital Luxury Group (DLG) and marketing automation specialist JINGdigital have jointly released their WeChat Luxury Index 2019 report. Shedding light on how brands can leverage the platform to build lasting relationships with clients, the study looks at 24 brands with community sizes ranging from 3,000 to 3 million.
Inactivity is expected
Despite the lengths brands go to tap WeChat users, less than half of followers actually interact directly. In fact, a mere 8.2% of a brand’s community interact with them every month.
Engagement Rate of WeChat Official Account Followers (Image credit: DLG and JINGdigital)
“They are not necessarily fake fans, but they are definitely inactive fans,” Aaron Chang, founder and CEO of JINGdigital, told TechNode. “This is not necessarily a bad thing because the function of WeChat is to interact with people when they are ready to interact,” he added.
Followers will often engage via WeChat official accounts to access brands’ loyalty programs, seek out answers to specific questions, or if they plan to make a purchase, the report noted.
Scheduling articles, events, and promotions around seasons and special occasions like Valentine’s Day, Spring Festival, and Mother’s Day is a common tactic to boost user engagement. For instance, Louis Vuitton chose a pig motif in its campaign for this year’s Spring Festival—the Year of the Pig. Many luxury brands like Burberry, Channel, and Balenciaga launched special campaigns for Qixi, China’s version of Valentine’s Day earlier this month.
Making use of chatbots for authentic and conversational message replies or live customer chats is also an efficient way of boosting engagement. Brands, however, have a lot of room to improve in this area as two-thirds of inquiries sent via WeChat chat windows are not answered, the study found.
Shareable forms and interactive quizzes with prizes or free trials help brands to collect more detailed data from customers, in turn, helping them create tailored content.
“Personalized content is the future for the WeChat experience, but unfortunately one size does not fit all,” said Kun Hsu, Partner at JINGdigital. “Only when followers get content tailored to them will the brands receive a sustained boost in engagement.”
The 48-hour window after a user initially follows a brand is the most crucial stage for engagement and inspiring return visits, the report said. A user will be the most active within the first six weeks of following. Activity peaks in the first week and sharply drops off by the second week, before gradually declining over the next month.
Besides offering general brand information, Swarovski includes clear calls to action in its welcome journey, directing users to its loyalty program, gift ideas, and store locations.
Room for growth on WeChat
Official accounts on WeChat remain most effective as customer relations management (CRM) tools for luxury brands, although Tencent has been trying to bolster e-commerce functionality.
The report shows that a little over half of all actions carried out by users are CRM-related, including retrieving membership information and contacting customer services. Some 30% of engagements were focused on seeking out information about the company, events, or products.
Engagement Type of WeChat Official Account Followers (Image credit: DLG and JINGdigital)
E-commerce represents only 17% of these actions, indicating that most brands still struggle to gain traction with WeChat e-commerce strategies. Most sales that happen on WeChat are campaign-driven at present, and it is a challenge for brands to create a steady and sustainable stream of business from the platform.
WeChat is also a major tool for offline stores to maintain customers. Stores and salespeople send out messages to consumers to drive purchasing decisions. Over one-fifth of respondents in the McKinsey Luxury China Report 2019 considered WeChat messages an impactful offline channel for their decision-making, after suggestions from in-store assistants and trying products on-site.