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.
To help luxury brands resolving the stalemate, Ocean Engine hosted the “Spark Creativity, Endless Exploration—2024 Douyin Luxury Industry Summit” on August 20th. The summit showcased Douyin’s comprehensive solutions for luxury brands, covering aspects from precise audience targeting and scientific content production to full-chain brand metrics. These solutions are designed to help luxury brands connect with emerging consumer needs, capture new marketing trends, and accelerate the enhancement of omnichannel experiences.
Segmenting Luxury Audiences Based on Scenarios: Helping Brands Precisely Identify Their Ideal Audience
Douyin, with over 600 million DAUs, features a diverse ecosystem of creators and a large, cross-generational audience with significant consumption potential. The challenge for luxury brands is to accurately identify target audiences with high economic status, cultural sophistication, and demand for quality from the vast amount of crowd data. This is one of the foremost issues in luxury marketing today.
In 2024, Ocean Engine Yun Tu offered more than 2.3 million audience profiles. Building on the foundation of targeting core, potential, and interest-based luxury users, it enables precise segmentation of audiences in various scenarios, helping luxury brands swiftly target their ideal customer base and achieve efficient communication and conversion.
The next step after identifying ideal audiences is to retain consumers. According to industry data, GENZ (born between 1995 and 2009) is expected to contribute 100% of the incremental growth in China’s luxury market. They are undoubtedly the target audience that luxury brands are eager to retain. GENZ consumers have rapidly changing behavioural habits and preferences, and they demand higher content quality during fragmented time periods. This necessitates luxury brands to engage them with continuously innovative content formats.
Douyin is the premier platform for diverse content formats, including trending events, popular content, micro-series, short dramas, interactive creativity, and more. It also offers advanced technological tools to bridge the gap with consumers, such as precise facial recognition, upgraded AR/VR, and accurate tactile simulations. This allows brands to effectively engage and nurture their target audience, facilitating rapid connection and retention.
From Brand Content to Social Scenarios: ‘OPUGC’ Unlocks New Horizons for Luxury Marketing
Luxury brands are consistently generating buzz, with styles like Miu Miu girls and intellectual fashion gaining popularity on Douyin. High-end brands such as LVMH, GUCCI, and Cartier are hosting offline events like pop-up exhibitions while creating online “sub-events” to engage with consumers. When high-quality brand content aligns with diverse social scenarios, creating effective brand marketing environments becomes more attainable.
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.
Specifically, Douyin provides the IP to create unique luxury marketing solutions, enhancing brand value with IP momentum and generating authoritative OGC content. This is then linked with influencers from the fashion, art, culture, and sports sectors, using formats and methods like topic challenges and AICG to produce engaging PGC content. This approach boosts the luxury brand’s exposure, reaches the core audience precisely, and deepens brand recognition. A large number of users, influenced by the OGC and PGC content, spontaneously share authentic UGC content on Douyin, achieving triple coverage of brand influence, reach, and reputation.
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.
In the first quarter of 2024, GUCCI collaborated with Douyin to launch the 2024 Spring/Summer colour trend—Ancora Red. GUCCI introduced Ancora Red through official Douyin content and engaged a celebrity network to generate buzz with the hashtag #AncoraRedSpreadingThroughoutTheEntertainmentIndustry. By leveraging influencers from various fields who visited Ancora Red spaces both online and offline, the campaign sparked spontaneous interactions from the public. The #AncoraRedCelebrityCityPhotoShootChallenge continuously generated a wealth of original and derivative content, resulting in a closely integrated online and offline brand trend-setting event.
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.
From Data Integration to Scientific Measurement: Upgrading Omnichannel Business Opportunities through Online and Offline Synergy
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.
Data shows that the rapid growth of the Douyin Local Services platform has become a new traffic pool for luxury brands, offering fresh audiences, content, and experiences. Furthermore, Douyin’s integration of product links and data has achieved synergy between online and offline business scenarios.
With CRM integration, brands can drive fresh traffic by attracting new offline members through online channels. Seamless integration of the product pipeline allows the brand to achieve a full cycle from user targeting and precise guided interactions to driving store traffic. This creates a comprehensive luxury shopping experience for consumers, offering everything from new product delivery and physical displays to appointment services, while exploring more business opportunities across both online and offline.
This year, to help brands achieve more efficient omnichannel business growth, Ocean Engine Yun Tu has upgraded its “rational” verification capabilities to encompass the entire marketing ecosystem. It includes comprehensive metrics for brand performance and SPU5A, offering holistic audience analysis and integrating measurement indicators across all content, touchpoints, data, and channels to support strategic marketing decisions.
From an “emotional” perspective, the platform has developed a metrics framework to evaluate brand image, extending to the alignment between brand positioning and consumer perception. Brands can gain a multi-dimensional, in-depth understanding of their brand image through metrics such as brand association, mention volume, reputation, and preference, guiding the accumulation of long-term brand equity.
By leveraging the synergy between online and offline capabilities, along with Ocean Engine Yun Tu’s brand image metrics framework and integrating brand-specific audience data with efficiency tracking from third-party platforms, luxury brands on Douyin can achieve precise front-end marketing and reduce acquisition costs. They can also validate comprehensive business results across the entire chain, continuously refining marketing strategies and exploring additional omnichannel business opportunities both online and offline.
Conclusion
Focusing on cutting-edge trends in the luxury goods industry and future growth opportunities, the Douyin platform leverages its robust content marketing capabilities and comprehensive data technology to continuously optimize its marketing ecosystem and tools. It is committed to enhancing the creation, incubation, and development of high-quality content and working with brands to explore new solutions for marketing challenges.
