Douyin Luxury Gravitational Center- 2023 Douyin Luxury Industry Report

In 2023, Ocean Engine, Douyin E-commerce and Ocean Insights in collaboration with Deloitte China, publicly released its first whitepaper on China's luxury market, titled “Douyin Luxury Gravitational Center - 2023 Douyin Luxury Industry White Paper". We aim to provide businesses with valuable industry insights, marketing inspiration, and e-commerce strategies amid the coexistence of opportunities and challenges. Through an in-depth examination of China's luxury market, an exploration of Chinese consumer behavior, and an analysis of Douyin's core strengths and successful case studies, we hope to assist luxury brands at various stages of development in the Chinese market. Our goal is to enable these brands to achieve sustainable growth on Douyin with a forward-looking perspective.

The Chinese market has become a must-contend place for luxury brands, while value retention rate and scarcity drive high growth for jewelry, watches and bags.

Fast forward over three decades, and China has evolved into a pivotal player in the global luxury market. After a brief dip in 2022, Deloitte predicts that Chinese consumers will account for 25% of global luxury consumption in 2023, rising to 40% by 2030, surpassing European and American consumers, and becoming the largest single market globally.

Jewelry, watches and bags are the strongest-growing segments in China due to their investment potential and asset preservation, the rarity of their brand and design elements, as well as their versatility.

The Chinese market is changing rapidly, and four important trends are emerging. Typical consumers in the luxury industry have different content and purchase preferences.

In 2023, China's luxury market is undergoing four notable changes. These include substantial growth in online channels, evolving dynamics within the target audience, improved localized strategies, and a recovery in cross-border consumption. Chinese consumers exhibit a nuanced perspective towards luxury goods. Those in the medium and higher spending brackets are more inclined to luxury items, particularly those with inherent value preservation qualities, such as watches. Conversely, consumers with lighter expenditure tendencies tend to adopt a more conservative approach, becoming increasingly price-conscious in their choices. Typical consumers in the luxury industry have different content and purchase preferences. Brands also need a wider and more diverse platform to communicate with consumers.

Practicality and emotional value together drive luxury consumption. Online content platforms have become influential information channels.

Chinese consumers are more mature and rational. Today, the main driver is self-indulgence. Moreover, there's a growing emphasis on luxury products' longevity and enduring value. Multiple touchpoints, rich content and complete links in China's digital landscape are building a more unique local luxury ecosystem. The luxury purchase chain of Chinese consumers is accelerating the expansion and differentiation, gradually shifting to more diversified online platforms. 53% Chinese luxury consumers have purchased through an online channel, which includes brand official websites (48%), e-commerce official flagship store (43%), content platforms (39%), and luxury e-commerce platform (26%) etc.

Chinese luxury consumers have higher requirements for content and Douyin is building a full-link ecology for luxury audiences.

Regarding content, Chinese consumers want a deeper understanding of luxury brands. They not only want to see product reviews and unboxings, but also want to understand the story behind the brand. Short videos and livestreams are the best carriers for authentic content with stories, surprises, and fun. 73% of luxury consumers use Douyin. They look for glimpses of celebrity fashion, limited-edition offerings, insightful education about luxury, and engaging brand narratives. The unhurried pace of live streaming aligns well with the refined image associated with luxury products. Douyin, through its short videos and live streams, has successfully brought a sense of joy to users' lives while catering to their needs throughout the entire journey from initial information discovery to making a purchase. This dynamic is gradually shaping a fresh perspective on luxury.

Douyin is an integrated platform for luxury brands combining content, marketing and sales, and the luxury sector's performance on Douyin continues to grow.

As the leading content and e-commerce platform in Chinese markets, Douyin leverages its strengths of having over 150 million interest users in the luxury industry and a complete business ecosystem to become an integrated platform for luxury brands combining content, marketing and sales. User, content, and e-commerce momentum on Douyin facilitates brand growth.

Luxury brands are achieving sustainable growth with "long-termism" in Douyin.

More and more luxury brands are learning about and exploring Douyin, and the voice of luxury brands continues to grow within the platform, attracting a large number of fans. At Douyin, accurate algorithmic technology creates a safe and high-quality content environment for brands. Ocean Engine's data platform and advertisement system help brands precipitate and manage users in a refined way, and cutting-edge technology and innovation bring users a unique brand experience. Douyin, as an omnichannel operating platform, provides brands with all-round business support from seeding to purchasing, and from marketing to achieving sales growth.