Forum examines how China's luxury market will evolve in the digital age

The impact of the sharing economy on the global luxury market, particularly in China, was the subject of a conference held in London this week.

International experts in luxury marketing, including brand specialists from McLaren and L'Oréal, attended the Warwick Luxury and Innovation Hub at the Warwick Business School.

The conference explored how consumption and brand communication techniques may evolve in line with new generations and a constantly-changing digital context.

Wang Qing, co-founder of the Hub, said: "Digital technologies, including social media, challenge a number of fundamental premises of luxury consumption and luxury brand management.

"The sharing economy, which is a growing part of our lives, especially for Millennials -- who are approaching their prime spending age -- fundamentally challenges luxury brands' values."

She said new technologies make the purchasing process more "enjoyable, interactive and sensual," particularly in China where e-payment methods are advanced.

The nature of the luxury retail world has changed, with digital technologies becoming more influential, according to analysis by Digital Luxury Group, which provides digital marketing and communication services for luxury brands.

"Today's luxury consumer is more digitally savvy than ever before and luxury brands have adapted themselves accordingly, with 20 to 50 percent of their budget dedicated to digital activities depending on the market," said the group's Chief Executive David Sadigh.

Speaking at the conference's panel discussion, Jason Smith, director for Western Europe at Exponea, a marketing automation software provider, said in the virtual social world brands should publish content with an emphasis on substance and quality to create higher brand connection.

"It is the fundamental strategy for brands to use the right platform to push the right content at the right moment to the right consumer targets," said Smith.

Bain and Company, the management consulting firm, says Chinese consumers buy more luxury products than those in any other country, accounting for about 30 percent of global sales in 2016. That is expected to increase to 35 percent by 2020.

In its China Social Media Impact Report 2017, the data consultancy Kantar showed how so-called 'key opinion leaders' (KOL) can influence buying decisions of their followers.

"Standing out by their unique personality and creative contents, a successful KOL can build a large fan base rather quickly and guide a targeted audience to e-commerce channels," said Linda Xu, head of research and consulting at Kantar.

Contact the writer at wangmingjie@mail.chinadailyuk.com