In contrast to the pressure felt by most sectors industries during the pandemic, Hong Kong’s luxury sector simply carried on strongly. According to the Census and Statistics Department, before the fifth wave of COVID-19, the retail sales value of jewellery, watch and clock, and valuable gift increased by 7.1% compared to the previous year. Notably, luxury brands such as Louis Vuitton and Chanel also announced price mark-ups as they entered 2022 – a clear signal that the sector’s development is well ahead of many others. What can brands learn from it?
One thing to note is that many luxury brands are aiming to expand market share through the metaverse and NFTs. A high-profile example of this occurred last year when a Hong Kong celebrity partnered with Christie’s on an NFT auction, with the items raking in more than HK$120 million in total. Following this, New World Development declared their acquisition of virtual land on The Sandbox platform for HK$38 million, in order to build an innovation centre demonstrating the commercial success of the Greater Bay Area.
Digital marketing platforms such as the metaverse can help brands communicate with a wider audience, but may also result in homogenised content. The general consumer meanwhile prefers localised content and a tailor-made experience. Hence even international brands are aiming to provide localised platforms and services.
For example, Tatler Asia has developed a local Hong Kong e-commerce platform called Tatler Unlisted, offering unique single items created for local audiences, each for a limited time. Another example is the Japanese luxury car brand Infiniti and their expansion into China. They appointed Pico to assist in creating ‘Infiniti Q Stores’ in several cities across the country, each with an interior design catering to local consumer preferences and offering localised interactive experiences.
Also, brands have long understood the importance of corporate social responsibility. Many consumers are sensitive about brands’ commitments to the environment, sustainability, equal opportunity and other issues. In response, many luxury brands have launched environmentally friendly product series, some of which use recycled materials such as plastic and wool to reduce textile waste. To get ahead after the pandemic’s market transformation, luxury brands must strive to cater to the new expectations of mainstream consumers.
Lawrence Chia
Chairman, Pico Group
