In a move to reinvigorate sales in the ever-important Chinese market, struggling Burberry has taken to employing something of a new strategy and it is working. The British fashion brand has introduced a brand new bag and ramped up advertising on China’s wildly popular WeChat app. In response, Burberry has reported a 4 percent rise in overall sales for the second quarter - a jump up from what analysts expected.
According to industry analysts, Burberry boosted advertising spending on WeChat - a multipurpose app that combines social media functionalities with e-commerce capabilities - which boasts nearly one billion users in China. The British brand said that thanks to its advertising campaign, which coincided with the recent launch of its new bag - the DK88, which retails for almost $2,000 - it saw its customer reach triple on the Chinese app.
Burberry has struggled significantly in recent years in China, where sales had slowed. However, with sales growth in China for the second fiscal quarter in the mid-single digits, topping the global growth rate, a resurgence of sorts appears to be underway.
Ken Odeluga, an analyst for City Index, told the AP that in focusing so heavily on WeChat Burberry is employing a strategy that its competitors in luxury goods have yet to implement. In the upper echelon of the fashion industry, many companies prefer to focus on physical stores or self-owned and operated e-commerce sites in oder to preserve the aura of luxury. This is particularly true given that many China-specific apps and online shopping sites have been plagued with complaints of the widespread availability of counterfeit goods.
Given that Burberry has prided itself on combining digital marketing with sales, such as by allowing shoppers to immediately buy online what they see on the catwalk during a fashion show, the WeChat initiative makes sense. A spokesman for the London-Headquarter company - which is currently in transition with former Celine CEO Marco Gobbetti taking the executive reigns from Christopher Bailey who will occupy on the creative head position goring forth - said that the WeChat advertising was only part of its overall sales strategy, which also includes new physical stores.
According to a statement from Burberry, the Chinese are spending again and it is seeing ‘top customers returning’ to [its] stores." The introduction of a new "it" bag - such as the DK88, which has already been spotted on the arms of Gigi Hadid, Naomi Campbell, Kate Hudson, and Kris Wu, among others - certainly might help. Burberry has been sorely lacking in this department for several years, while competitors churn out covetable accessories to help boost sales.