Localization is essential when reaching out to global markets. Luxury brands particularly cannot succeed without it in today’s business environment. Every market perceives luxury goods differently and this is especially true for Chinese luxury consumers. China is the largest market for luxury goods and every luxury brand from Prada, Gucci, Louis Vitton, Michael Kors, etc. is looking to get a greater share of the pie.
To accomplish this, localization is the key to attracting more Chinese luxury consumers. With this article, you’ll find out why Chinese luxury consumers are a difficult market to tap into and how luxury brands plan fine-tune their localization strategies to accommodate China’s dynamic consumer behavior. This article will also highlight how small luxury brands can properly compete with big-name luxury brands with localization and adjusting to the changing preferences of the Chinese luxury consumer.
Why Luxury Brands Need To Localize
Localization Is Necessary For International Businesses
Localization is simply altering content until it is suitable for a target market or audience. It’s really that simple, but don’t let that fool you into thinking that a simple Google translate can solve all your problems. Localization involves knowing your target market’s language, habits, preferences, cultural and social norms, and even their prevailing taboos. This can be incredibly important in guiding your marketing strategy and informing you of exactly what not to incorporate in your campaigns.
Localization is, in fact, a key mainstay in international marketing. You can take a quick peek on these international business marketing strategies and you’ll see that getting it right the first time involves employing localization. In fact, professional translation is best paired with localization strategies as localization is the missing piece that translation lacks.
Localization usually begins with translation but many often end up thinking translation is also where it ends. Even with the most accurate translations, there is no guarantee that the resulting translation will result in effective marketing content. It’s important to consult with native speakers and marketers on your website and product translations to ensure they will resonate well with the target market/audience.
Small businesses usually make the mistake of thinking that quality translation is enough in an international business strategy. Although it is a stepping stone, it’s not enough for them to become truly competitive, let alone be successful in the international arena. Global companies know too well the cutthroat nature in international business and that is why they routinely hire the right people to get the job done.
Translating Western Languages to Chinese is Exceptionally Hard
They say that you need to know an average of 2,000 Chinese characters to read a Chinese newspaper. In reality that’s just the basics. There are tens of thousands of Chinese characters in the Chinese language (Mandarin). Apart from their writing system, Chinese grammar rules are completely different from English and Western languages in general. This makes Chinese translations very hard, but not impossible with the right people.
So if you’re a small business or a multinational corporation with English as a working language, you will need a native translator who can flawlessly translate English to Chinese and Chinese to English. Your Chinese translator will also find the appropriate angle in relation to your content’s context to make a final translation that will resonate well with native Chinese speakers.
Depending on how much material you need to get translated, you might even need a team of Chinese translators. They’ll take care of your marketing translation, product translation, website translation, and even video translation for your content marketing needs.
Times Are Changing For Luxury Brands
It wasn’t long ago when luxury brands could simply rely on their logo’s prestige to sell. But now things have changed. If luxury brands routinely market their products as timeless, marketing strategies, on the other hand, need to be constantly updated. Localization is about transcending beyond language barriers. This means translation, no matter how perfect and well-intentioned, simply isn’t enough.
Luxury brands also can’t rely on ‘cheap’ Chinese localization tricks such as painting everything with red and slapping a dragon or other traditional Chinese motifs. Chinese consumers aren’t not buying it either and it’s a big mistake for brands to assume that’s all there is to attract Chinese consumers. For some examples of successful use of Chinese motifs check out our article on products made specifically for Chinese New Year below.
Getting Localization Services You Need From a Localization Company
Localization is highly complex and there are many “horror” stories you can find online of localization fails and faux pas. It’s best done through a localization service from a localization company. Localization companies are also known as professional translation agencies as they offer both localization and professional translation services.
In this case, you need localization experts that have a thorough knowledge of China’s luxury markets. You also will need Chinese translators as explained earlier to translate your marketing materials, product descriptions, website, and any relevant content that you need to share.
In the end, localization services and professional translation services are your best and only option. As mentioned earlier, localization is more complicated than just a quick Google search. Likewise, professional Chinese translations cannot be obtained in any way through free online translation tools such as Google Translate.
Chinese Consumer Habits Are Rapidly Changing
The rise of China from one of the most impoverished nations to one of the richest is nothing short of an economic miracle. This economic revolution also resulted in a dramatic shift in consumer spending habits. A great place to look at in detail in the luxury goods market.
The Chinese luxury market is now the largest in the world which obviously makes it a prime market by luxury brands. The Chinese luxury consumer’s growing demand for sophisticated Western goods is a result of two factors, China’s growing economy and the rise in Chinese tourists traveling the world. Just check out the graph below prepared by Bain & Co. to get a better sense of how important Chinese consumers are for the luxury goods sector
Many Chinese families have seen their purchasing power and disposable income growth due to China’s rapidly growing economy. Likewise, they then have more opportunities to travel abroad and become acquainted with Western brands. But as to why luxury brands are a particular indicator of their evolving consumer choices also has to do with Chinese culture.
Chinese culture is deeply rooted in social acceptance and normative behavior. Thus conspicuous spending of luxury goods is a normative way of showing off one’s wealth and social hierarchy. With their newfound wealth, Chinese families have more than enough to indulge more in luxury goods.
The Latest Trends in the Chinese Luxury Goods Market
We briefly talked about this earlier but we can now go into the details. The majority demographic that makes up today’s Chinese luxury consumers are actually younger or millennial consumers. They have more disposable income and the overall urge to spend on luxury goods.
Contemporary Chinese Luxury Consumers Love to Shop Online
Compared to previous consumer generations, Chinese millennial consumers are accustomed to the digitized and curated shopping experiences and expect luxury brands to cater to those preferences. Chinese consumers are big on online shopping. In fact, the country hosts the biggest annual online shopping event known as Singles Day or Double 11 that brings in more revenue than the U.S.’s Black Friday and Cyber Monday combined. For more on Double 11 check out our article below.
However, this doesn’t mean that luxury brands should completely transfer all of their transactions online. Traditional brick-and-mortar stores still have their place. In the end, it’s all about offering diverse shopping experiences to Chinese luxury consumers with different preferences. While the emphasis on exclusivity might have worked decades before, younger luxury shoppers today value brands that engage with them on a deeper level.
Luxury brands are expected to have a greater and more engaging presence in online platforms such as websites and social media. Luxury shopping was entirely done through traditional brick-and-mortar stores, but there’s a rising trend for luxury brands diving into online shopping to cater to online shoppers.
This is especially true in China where online shopping is extremely common through big-name platforms such as Alibaba, Taobao, T-Mall, etc. While the emphasis on exclusivity might have worked the decades before, younger luxury shoppers today value brands that routinely engage with them meaningfully.
Millennial Luxury Consumers Buy Luxury Goods To Be A Part of A Community
Another fact is that Chinese millennial consumers have different attitudes toward luxury goods. Yes, the Chinese notion of conspicuous spending to show one’s social hierarchy still exists but it’s taken a new form. Luxury goods to them are a way of connecting with the latest trends and networking with other people of similar tastes.
This means that they’re more willing to try out more niche and obscure brands than familiar brands. The main attraction point is not the brand name or pricing, but rather the opportunity to be ‘in the know’ and to be ‘cool’. This trend is a major disruptor to many of the big luxury brands that relied on prestige and exclusivity for their products. Look forward to reading more about the level playing field between niche and big-name luxury brands.
Localization Isn’t Just For Big-Name Luxury Brands
It’s understandable to assume that only the big-name brands can only benefit in the end since they’re the only major players in the market—or are they? It’s true that these big-name brands do have a huge share of China’s luxury market but trends are changing. If you want evidence, the South China Morning Post (SCMP) highlights the growing trend among Chinese millennials choosing niche luxury brands over big-name brands.
In fact, SCMP even pointed out that being small actually works to their advantage! Being small and a relatively new player in the Chinese luxury market means they’re more open to try out new methods to form meaningful relationships with the younger and tech-savvy luxury consumers.
This means that they have embraced online platforms such as Taobao and T-Mall which actually makes up at least half of their total sales. Combining it with their crafty content marketing strategies, small niche brands are quickly becoming an avenue for young Chinese luxury consumers to establish themselves as unique individuals but also up with the times.
Even Big-Name Luxury Brands Run Into Localization Gaffes
It’s easy to think that luxury brands aren’t susceptible to localization mistakes. In reality, a lot of them do get it wrong with horrific consequences done to their brand’s reputation. A notorious example is Dolce & Gabbana’s video ad showing a Chinese model eating pizza, spaghetti, and cannoli with chopsticks.
Although it was intended to show the Chinese luxury consumer’s growing “appetite” for Western luxury goods, it apparently didn’t resonate well with them. For more examples of marketing mishaps in China check out our article below.
The Chinese found the ad extremely distasteful and highlighted the company’s cultural insensitivity. This resulted in the company being completely listed off of China’s e-commerce platforms, its fashion show in Shanghai was canceled, and its social media engagement numbers almost nonexistent. No one knows if the company can truly recover and get another chance in the Chinese luxury market.
The Dolce & Gabbana scandal is one of the many cases of luxury brands ignoring the basics of localization 101. This wasn’t a case of a language translation faux pas but cultural insensitivity. A gaffe like this cost the company billions and it serves as a lesson to all companies, not just luxury brands of what entails for them if they didn’t pay any attention to cultural sensitivities.
Timeless Luxury Brands Need to Adapt: Final Takeaway
We can see luxury brands slowly but surely realizing the changing times. They’ve not only supported online shopping but are also redesigning their products. For example, there was a time that Louis Vuitton and Gucci exclusively offered classic designs but now, they’re offering streetwear products such as sneakers, caps, hoodies, bonnets, etc. Ultimately, Every global business has to localize for them to stay competitive and relevant to their target market/audience.