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Coresight Research

Key Points

  • Dior (EPA: CDI) opened an online boutique shop on WeChat and rolled out a new, limited-edition Lady Dior small handbag on the platform on August 1.
  • The luxury brand promoted the handbag on its WeChat subscription account and via WeChat Moments, an area similar to Facebook’s newsfeed, where friends can share content. The handbag sold out on the second day.
  • Brands can use WeChat as an entry point for tapping into the online retail market in China. The social app has more than 700 million monthly active users that brands can reach with targeted advertising.

Lady Dior Small China Valentine Limited Edition

On August 1, Dior launched an online boutique shop on WeChat and released a new handbag, the Lady Dior Small China Valentine Limited Edition, becoming one of the first few luxury brands to sell on the platform. The handbag was thematically rolled out before China’s Valentine’s Day, which fell on August 9.

Dior’s WeChat store allowed buyers to customize the Lady Dior by choosing the order of the buttons that go on the handbag’s belt. Customers could then pay for their purchase using Tenpay, WeChat’s mobile payment solution.

Source: WeChat/Dior

Even though WeChat users could buy the handbag on the platform, Dior seems to have used the product release as part of a broader marketing push. On the day of the launch, the company published an advertisement for the product on its official WeChat subscription account and promoted it on WeChat Moments. The bag, which was priced at ¥28,000 (US$4,210), sold out within two days, after which interested WeChat users were encouraged to visit Dior’s offline boutiques.

Source: WeChat/Dior

Marketing on WeChat: The Opportunity for Brands

Chinese consumers have become increasingly motivated by online sales and marketing campaigns, as evidenced by the 2015 Singles’ Day sales figures; the holiday generated US$14.3 billion in sales last year, an increase of 58.9% from the year before. Luxury brands now seem to be experimenting more with online campaigns by venturing more aggressively onto WeChat. For brands, this may prove a way to counter a host of headwinds in the Chinese market, including the economic slowdown, anti-graft measures and the increasing popularity of cross-border e-commerce.

WeChat could be key for brands looking to tap into the online market, as an advertising campaign on the platform can potentially reach more than 700 million monthly active users. In fact, many retail brands—including Nike, BMW and Uniqlo—have already been advertising on WeChat. Parent company Tencent, which generates most of its online advertising revenue from WeChat, has seen that revenue explode as a result. It was up 110.3% year over year, to ¥17 billion (US$2.6 billion) in 2015, having grown at a CAGR of 72.1% since 2011.

Dior’s successful marketing campaign may spur other luxury brands to tap into the Chinese online retail market through WeChat.

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