Beauty and Luxury Encounters the Future

The 2022 Fashion Tech·T Summit was successfully launched in Shanghai.

Beauty and Luxury Encounters the Future

In the context of a fast-changing business environment and ever-evolving technological innovations, the fashion industry is currently confronted with unprecedented opportunities and challenges. Digitalization has served as a key impetus for brand transformation, generating infinite potential for brand value enhancement and marketing growth. Against the backdrop, firstly and jointly organized by Tencent Marketing Solution, the Omni-channel marketing partner for enterprises, top fashion media WWD, and leading consulting firm BCG, the 2022 Fashion Tech·T Summit titled 'Beauty and Luxury Encounters the Future' and Report on Digital Trends of China's Luxury Market in 2022 and Report on Digital Trends of China's Prestige Beauty Market in 2022 was successfully launched on December 12.

The conference invited fashion industry professionals from top media, consulting agencies, leading digital platforms, and famous brands in the beauty and luxury industry. Regarding the theme of 'Digital Innovation in the Beauty and Luxury Industry,' they analyzed the most cutting-edge market trends, presenting a holistic landscape of digital innovation in the beauty and luxury industry by incorporating the most iconic innovation cases of the year. The beauty and luxury industries are booming in recent years, especially in the China market there is unprecedented vitality.

Amid the rapid evolution and iteration of the market, how can beauty and luxury brands cope with it swiftly? Through the long-term generation of opportunities in the digital universe, the brands can construct the same frequency of growth both online and offline as well as in virtual reality. That is an inevitable theme in the development of the industry. Lena YANG, WWD China Co-Founder & Vice Chairman.

Ms. Lena Yang, WWD China Co-Founder & Vice Chairman, stated in her opening remarks on the subject of 'Digital Innovation in the Beauty and Luxury Industry' that from a media standpoint in today's market, 'volatility, uncertainty, complexity, and ambiguity are taking on significant trends. As a result, personalized contexts and social value expressions have gradually taken a new direction in the upgrading of user scenarios.

We must develop a more resonant narrative to deliver brand value and service in the new era. In this way, we can better engage the new generation of consumers and achieve the accumulation and multiplication of brand capital.' Lena Yang said that 'In this era of challenges, consumers' expectations for a better life and classic values remain high.' Moreover, the expanding middle class and emerging Generation Z set high anticipation for the beauty and luxury market. 'In this regard, digital innovation applications provide a shortcut for brands to connect different circles and break the boundary between public and private domains.

Ultimately, it also provides a broad potential for brands to grow online and offline at the same frequency.' Daniel Shu, Head of Beauty & Luxury Industry of Tencent Marketing Solution. As digital innovation gradually acts as a driver of sustainable growth for brands, Tencent Marketing Solution, the Omni-channel marketing partner for the beauty and luxury industry, is led by the value proposition of 'The Future is in Omni-channel Digital Solutions.' Leveraging the entire ecology and centering on users, Tencent helps brands deliver fashion aesthetics and create meaningful digital connections in Tencent's omni-channel through ongoing innovation and multiple approaches. Today in Tencent, the beauty and luxury industries are a thriving potential, and it shows robust growth trends from industry content interest groups to the correlative search volume to the Mini Program GMV.

Daniel Shu, Head of Beauty & Luxury Industry of Tencent Marketing Solution said in the long run, 'brand power is of the ultimate importance. We are constantly thinking about how to leverage the holistic and quality content to facilitate brands to build emotional connections with users and consequently build brand power. The essence of decentralized transactions is to offer efficient solutions in every scenario where the users are likely to generate transactions.' In the future, Tencent will also make continuous efforts in three areas: content technology, touch point interconnection, and Omni-channel transactions to further meet the dual needs of users and brands and bridge efficient communication between the two sides.

Focus on the frontier dynamics of the consumer market and gain insight into the potential value of core strength. The innovation of digital technology also continued to drive the overall upgrade of the whole market, and the driving force behind the innovation comes from the keen perception of consumers and market changes. Mastering the annual new trends of the consumer market will be the key to the success of the beauty and luxury brand planning the future digital layout.

On this basis, TMI and Boston Consulting Group (BCG) jointly launched Report on Digital Trends of China's Luxury Market in 2022 and Report on Digital Trends of China's Prestige Beauty Market in 2022, which interpreted the latest trends and dynamics in the prestige beauty and luxury market. On China's luxury market over the last 12 months, An Lin, Managing Director & Partner of BCG and a core member of BCG's Consumer and Global Advantage practices, said: 'Different consumer segments' spending change varied greatly. Light spenders spent much less while medium and heavy spenders continued to increase spending.

Younger generations, in particular, have become an increasingly larger segment of luxury spenders. Among new consumers, 51% is post-95s and 18% is post-00s. We believe three consumer segments will become the main drivers of market growth in the future, including medium and heavy spenders, younger consumers and male consumers.' An Lin, Managing Director & Partner of BCG and a core member of BCG's Consumer and Global Advantage practices.

Meanwhile, value for money, classic and timeless styles, sense of achievement and product exclusivity have become the most buying factors, according to the reports co-published by TIM and BCG. As for categories and channels, the macro environment has led to increasing demand of high-end home products and luxury outdoor gears/sportswear, and domestic spending continued to increase at the expense of overseas purchase. 'Brand's official online channels including private domain traffic marketing are increasingly playing a very important role in stimulating consumers' interest, readiness of sharing and repurchases,' An added.

On China's prestige beauty market performance in 2022, Ding Yi, project leader at BCG and a core member of BCG's Consumer Practice in Greater China, shared that 50% of prestige beauty consumers are under the age of 30, contributing 48% of sales, while those over 30 show greater resilience during market slowdowns. In terms of spending contribution, heavy spenders' overall spending remain stable with growth in both prestige skincare and perfumes categories, while light spenders experience substantial declines. Future consumer expectations are promising, as Chinese consumers are becoming more conscious of personal image enhancement with economic and social development.

Amid major structural changes in the prestige beauty market, new opportunities are emerging in terms of categories, new consumer segments and new ways of interaction, the TMI and BCG study finds. 'For prestige skincare, consumers select products through experience and sample trials; prestige color cosmetics consumers are easily influenced by hits and trends; and for prestige perfumes, self-satisfaction and self-expression remain the key attributes of prestige perfumes, allowing consumers to relate emotionally to the brand story and spirit,' Yi noted. Ding Yi, project leader at BCG and a core member of BCG's Consumer Practice in Greater China.

Decode Omni-channel operation capabilities and uncover role models in technology innovation. Given the unlimited potential in China's beauty and luxury market, the constant upgrading of technology innovation incorporates virtuality with reality, online with offline. Increasingly, new technologies and new approaches have spurred brands and platforms to forge deeper emotional bonds and value recognition with consumers from the content level and to achieve a holistic upgrading of omni-channel operation capabilities.

In the session on omni-channel operation capability interpretation and industry benchmark case sharing, the guests probe into how digital innovation contributes to brands' long-term growth in three aspects: omni-channel innovation trends, consumer hyperlinks, and brand longtermism. Omni-channel Innovative Fashion The improvement of the omni-channel operation capability is to help brands deliver fashion aesthetics and embrace new opportunities and challenges. As an essential component of Tencent's omni-channel ecosystem, Weixin's huge social ecology is one of the crucial links between users and brands.

(Weixin is the Chinese version of Wechat). In the process of beauty and luxury brands conveying fashion aesthetics and creating innovative digital connections with consumers, Tencent's innovative approaches in the ecology provide vast possibilities and powerful support for them to exhibit creativity and communicate with consumers. George Xie, Head of Beauty and Luxury industry planning of Tencent Marketing Solution, gave a speech themed 'Resilient Growth by Integration.' He shared multiple omni-channel innovation practices including Weixin Moments, Weixin Search, Weixin Channels, and Mini Programs.

In his opinion, 'In Weixin ecology, Moments is the traffic entrance, while Search connects and dispatches traffic for brands. Meantime, Weixin official accounts, Channels, and Mini Programs link to each other and connect consumers.' Each touchpoint is a dot. By connecting the dots to the big picture, we can achieve maximum value and long-term resilience for the brand.

Each touchpoint within Weixin is not isolated. This is no longer just an advertising exposure of a single point, but an integrated operation, and a combination of brand marketing. Elsie Zhang, Client Development Director, DLG (Digital Luxury Group), and Joyce Cai, Head of Beauty and Luxury Industry Operation of Weixin Ads, further engaged in a discussion on this topic.

Having undergone years of growth in China, premium beauty professionals have keen insight and a profound perception of the diverse and segmented changes in the consumer market. Meanwhile, their pioneering exploration of digital marketing also provides a valuable reference for the entire beauty and luxury industry. In this regard, DLG (Digital Luxury Group), specializing in digital research in the luxury industry, foresaw through professional data analysis and industry observation that the digital landscape of beauty and luxury brands will contain culture and emotion part, rather than mere technical-level innovation.

Tencent offers multidimensional possibilities for that. Zhang Yi from DLG pointed out that recently, 'the membership system structure has placed greater emphasis on the early stages of the consumer journey. We target intentional and potential customers and boost their awareness and interest by conveying brand value and content.

Since the Weixin ecosystems of beauty and luxury brands have been completed, the next step for brands is to synchronize diversified touchpoints to maximize traffic and impact.' The drastic market changes inspire brands to break through and innovate, probing for more touchpoints to convey brand values and deepen market interactions. Based on its powerful digital innovation capabilities and extensive yet close user base, Tencent is producing new marketing innovation highlights for beauty and luxury brands by continually upgrading its omni-channel operation capabilities. Joyce Cai commented, 'Our perception of innovation can be captured in four words: User insight, experience balance.

The foundation of our innovation is rooted in our users. We leverage scenarios to get closer to users as well as bring emotional value to them. We have noticed a shift in user search habits toward vertical APPs.

For example, 50% of Weixin users have searched for brands. Thanks to the maturity of Weixin ecosystem, users can find relevant brand content and services here.' The above three points are the basis for the commercialization of Weixin search.' Concerning omni-channel innovation, the beauty and luxury brands, as industry role models, are aiming at the omni-channel distribution, realizing multi-point triggering through better content, achieving the closed-loop marketing from value delivery to value transformation, and accumulating momentum for long-term growth while preserving the brand tone and delivering brand value. Consumer Hyperlinks With the arrival of the consumer personalization era, one of the vital factors for beauty and luxury brands to lead the market is how to establish an efficient communication mechanism to reach consumers in various circles and build strong emotional connections with them.

Especially, identify and cultivate more consumers with shared values in different interest areas such as music and games. Music and games are the 'consumer hyperlinks' that effectively boost consumer reach and conversion. Their influence is enormous.

Liu Zheng, Head of Commercial Advertising of TME, delivered a speech on 'Listen to the Mighty Beauty' and ushered the audience into the magnificent auditory world to feel the power of sound. The innovative blend of art and music, the reinterpretation of 'sound' scenes, the dynamic 'sound' experience of the virtual world, and the renowned 'sound' across borders. Music is also penetrating circles of people with its infectious power, resonating and emerging as the new language between brands and consumers.

'Because music can be empathic, connecting to all scenes, it has a natural link to beauty and luxury brands,' remarked Liu Zheng. TME emphasizes the communication between people and nature and dedicates to things that carry warmth. For example, through artistic events, we use music and art to interpret the positive emotions among people.

We also use music to express the vast beauty of 'sound' and to communicate with nature through compelling content. Along with this trend, the brand innovation concept will also be enhanced by the cohesive power of music and digital innovation to achieve infinite 'sound' growth in different dimensions through crossover and circle-breaking marketing. Liu Zheng, Head of Commercial Advertising of TME.

Like the multi-sensory experience offered by music, the attempt to transcend dimensions is the communication between the physical world and the virtual one. Thanks to the continuous upgrading of technology, the constraints of space and time in the virtual world have been eliminated, thus facilitating interaction and communication. Meanwhile, appealed by the shared interests, the culture sphere formed by enthusiasts from different regions and fields has empowered such groups with unprecedented cohesive and leading power.

As the main battlefield of the future scene, Super QQ Show, which pools together the youngest cohorts in China, enables people to have real experience in the virtual world through cutting-edge technology, and provides another dimensional space for brands and users to express their personality and have an enhanced interactive experience. Mr. Guo Zhaolin, from Super QQ Show Commercial Team, said: 'In the short run, Super QQ Show gives a leg up for brands to make advanced layout in markets favored by Generation Z population, gain the first-mover advantage in scene traffic in the new era, and provide brands with innovative marketing and opportunities to interact with consumers; in the long run, we aim to bolster the long-term accumulation and enhancement of brand value.' Guo Zhaolin from Super QQ Show Commercial Team.

Music, gaming, and other enriched cross-circle and cross-dimensional expressions are now used by a growing number of brands to engage and resonate with consumers. These communication approaches, grounded in different interests, allow communication to become much more heartfelt. As the leading force, Beauty and luxury brands achieve circle-breaking resource integration and value delivery through music, esports, digital collections, co-branding, and other enriched forms.

Brand Longtermism Meantime, the growth of omni-channel operations and the expansion of consumer circles are underpinned by brand longtermism. This longtermism is mainly reflected in the enhancement of consumers' perception of the brand. How to build the brand value system and differentiation through digital marketing, achieving brand innovation and trendsetting.

This requires constant breakthroughs in the process of practicing longtermism. As the market becomes increasingly segmented, online video platforms also showed a trend of specialization in content distribution, such as fashion, variety shows, dramas, virtual idols, and sports. While developing the mass track, Tencent Video continues to cultivate the niche track, providing more professional and in-depth content mechanisms for beauty and luxury brands and creating a better narrative atmosphere.

Chen Gezhi, Head of the Sales Service Center of Tencent Video, shared his opinions on 'Tencent Video's Layout of Longtermism and Outlook' under the theme of 'Beauty is Visionary' from a content marketing perspective. Chen remarked, 'Tencent Video has proposed the concept of IP+(Intellectual Property Plus)and is committed to diversity, quality, and customization. We strive to multiply IP value through multi-scene IP distribution and deepening to build brand momentum and most importantly, brand power.' Chen Gezhi, Head of Sales Service Center of Tencent Video.

In addition to content marketing, how to build the brand value system and differentiation through digital innovation, enhancing consumers' perception of brands. This requires constant breakthroughs in the process of practicing longtermism. Lena Yang, Co-Founder and Vice Chairman of WWD, then hosted a round-table session with Veronique Yang, BCG Managing Director & Senior Partner, BCG Consumer Products Practice Greater China Head, BCG Fashion & Luxury practice AP Leader, and Huang Jianxiong, senior luxury marketing consultant.

The speakers shared their insights regarding the topic 'Sustainable Innovation for Brands' New Chapter.' The three expressed their views on the return and innovation of longtermism, brand culture, perception building and output, omni-channel marketing, and the social value of longtermism. Huang Jianxiong pointed out, 'It is crucial for brands to identify their persona in order to select the most appropriate marketing tools. This is like choosing clothes.

Firstly, you need to know your traits. Then you know what suits you. 'When referring to long-term brand building and brand's social value, Veronique Yang said: 'Uni Marketing can help brands amplify the share of voice of their social value propositions and help such promise resonate with consumers, and we can disseminate these concepts to consumers in a very diverse way with localized language and in a form that can be understood by each other.' Lena Yang, WWD China Co-Founder & Vice Chairman; Veronique Yang, BCG Managing Director & Senior Partner, BCG Consumer Products Practice Greater China Head, BCG Fashion & Luxury practice AP Leader; Huang Jianxiong, Senior Luxury Marketing Consultant.

In the future, quality content and innovative technology will be equally important as Tencent's ecosystem evolves into a digital omni-channel platform. With depth and breadth, the value delivery of beauty and luxury brands will also form an online ecological omni-channel landscape through the connection of various touchpoints. As Lena Yang concluded, 'In light of advanced technologies and enriched marketing approaches for consumer connection, the core always lies in returning to the brand value and culture.' Subdivided professional tracks and multi-traffic scenarios will become a connector between online and offline, inside and outside of Tencent ecology.

It will generate infinite potential for beauty and luxury brands, empowering them to stay competitive in the rapidly evolving market to achieve long-term growth and lead the industry in transformation and upgrading. No matter how leading the new technologies are today, and how enriched the marketing approaches to interact with consumers, the core always lies in returning to the brand value and culture.