The “business challenges” faced by global luxury brands have intensified, becoming a widely recognized issue in recent years. According to the 2024 “Luxury Goods Worldwide Market Study” jointly released by Bain & Company and the Italian luxury goods manufacturers’ industry association, Altagamma, the global luxury market is projected to decline by 1% to 3% in the first quarter of 2024. Most regional markets are experiencing a slowdown in growth, prompting major luxury brands to adjust their business strategies by raising prices, exploring new opportunities, and transforming their approaches. The industry is at a pivotal point of divergent development.
Amid this pressure, luxury brands face three major marketing challenges: How can they accurately identify the target audience and gain precise insights into their needs? How to effectively communicate with consumers and initiate connections quickly? How can they assess the effectiveness of online and offline omnichannel marketing? Opportunities are often present after challenges. In the first half of 2024, the GMV (Gross Merchandise Value) of luxury goods on Douyin surged by over 45%, highlighting Douyin’s emergence as a crucial business platform for luxury brands. However, success will depend on whether brands can leverage Douyin’s opportunities and effectively address these challenges.
For the luxury industry, it is not easy to find the right people, especially to capture the hearts of the GEN Z generation who are at the forefront of technological and cultural change. According to industry data, GENZ (born between 1995 and 2009) is expected to contribute 100% of the incremental growth in China’s luxury market. The GEN Z gathered on Douyin are exactly the core competitiveness of future consumption that luxury brands are looking for. Douyin has reached the next level by letting GEN Z “get into” luxury brands in various ways.
With a user base of over 600 million daily active users, Douyin has established a rich and varied community of content creators and attracts a broad, cross-generational audience that presents substantial consumption opportunities. For luxury brands, the key challenge lies in effectively pinpointing their high-net-worth, culturally aware, and quality-oriented consumers within the vast repository of user data. This dilemma ranks as one of the most critical in the realm of luxury brand marketing currently.
By 2024, Ocean Engine Yun Tu had provided over 2.3 million viewer personas. Leveraging the targeting of key, prospective, and interest-focused premium users, it facilitates accurate audience segmentation across different contexts, allowing luxury brands to swiftly pinpoint their perfect clientele and accomplish effective interaction and conversion.
From branded content to the social scene, Douyin is constantly innovating.
From the perspective of the brand, Douyin maximizes the efficiency of conventional brand content assets with the help of innovative brand advertising co-creation. The interactive advertising method makes brand content full of vitality and significantly enhances the influence of communication. In addition, Douyin has successfully created an exclusive courtesy node, making it a must-have for luxury brands’ advertising traffic. During the holiday season, when users’ attention to new products reaches a peak, it uses large exposure to attract users’ attention and then converts users into brand crowd assets.
Tiffany”more than one screen” LAMER”polaroid”
This year, Douyin’s innovative “OPUGC” (Occupationally Generated Content (OGC) – Professional Generated Content (PGC) – User Generated Content (UGC) ) interaction model has introduced new opportunities for luxury brands in content marketing. It deepens connections with users and transforms into an impactful marketing scene for luxury brands. Unlike traditional integrated marketing strategies, the “OPUGC” content integration approach focuses on content, enhancing its value through impact, coverage, and authenticity to drive consumer engagement and brand conversion.
In practice, the value of content relies on collaboration with the platform’s ecosystem. Douyin’s “DOU Content Lab” enhances content originality, with a dedicated production team familiar with the platform’s users, offering customized on-site content ideas for global luxury events, and leveraging the platform’s IP to maximize brand content value. For example, the Chinese women’s football blockbuster co-created by PRADA and “DOU Lab” has a total exposure of over 240 million on the entire network.
In March this year, GUCCI and Douyin jointly let “Rosso Ancora” go off the screen, setting off a storm of Italian aesthetic colors. In this iconic global event for luxury brands, Douyin created full-link content marketing for the brand’s offline activities online and offline. In the preheating period, the end resources were connected, and keywords were pre-buried at multiple points before the brand event to promote the first popular color of 2024. Big Day and DOU came to the show to directly hit the event site, and amplified the exposure of the brand event through the first release of exclusive creative content on the entire network. The joint interpretation by celebrities and experts detonated the trend hotspot, successfully making “Ancora Red” a hot search. GUCCI’s experience space created in Beijing, Shanghai, Chengdu, and Shenzhen, with the help of the Douyin KOL matrix, created a trend across the entire network, transforming the new trend concept into high-quality content. The total exposure of more than 800 million on the entire network and the duration of the hot spot on the list for more than 24 hours prove the diverse potential of the Douyin platform in building trend consumption in the luxury industry.
At Dior Fashion Week, the “DOU Content Lab (DOU来内容实验室)” segment “DOU Fashion Show (DOU来看秀)” marked its international collaboration debut with the brand by providing live-streaming technical support. It delivered a fashion show experience that consumers could fully immerse themselves in, from the opening of the show to backstage and guest interviews, all from the comfort of their homes. This format showcased and interpreted the inspiration behind the brand’s new season designs in a diverse manner. The panoramic online and offline show format allowed more consumers to experience the allure of fashion up close, enhancing the brand’s global influence.
In addition to audience insights and content marketing, the synergy between Douyin e-commerce and Douyin Local Services—both online and offline—has brought new omnichannel business opportunities for luxury brands. Additionally, Ocean Engine offers key scientific tools for verifying omnichannel marketing effectiveness through a holistic approach, helping luxury brands seize new opportunities.
Integration with CRM systems empowers brands to entice new offline clientele via digital platforms, thereby generating fresh traffic. A smooth melding of the product pipeline enables brands to execute a complete journey from target audience engagement and guided interactions to boosting foot traffic in physical stores. This approach delivers a holistic luxury shopping experience to consumers, featuring product launches, physical showcases, and scheduling appointments, thus unlocking additional business potential in both the digital and physical realms.
At the same time, the new linkage of brand-owned groups and the efficiency tracking of third-party platforms will highlight Douyin’s ability to help brands achieve precision marketing.
Therefore, for luxury brands, with the above set of combined moves, cooperating with the Douyin platform is undoubtedly the best way to occupy the mind of GENZ and achieve brand-effect integration.
The collaboration between Douyin and the luxury industry continues to explore new possibilities. In the future, with the support of Douyin, how luxury brands will dynamically connect more closely with Gen Z consumers and achieve business growth is all worth looking forward to.