For years, luxury brands around the world have been slow to adopt digital. But the pandemic has sped up the process, forcing many to pivot and innovate during a time when a large number of transactions are happening digitally.

The top 15 livestream shopping categories in China

Sustainability is increasingly top of mind for consumers in China. Many are making lifestyle changes to address the issue, spurred by the country’s many environmental catastrophes, as well as the government’s recent pledge to reduce emissions. And more than ever, shoppers expect brands to offer products and services with eco-friendliness in mind—and for the right price.

The way consumers in China are shopping for luxury goods is changing amid the pandemic, with more purchases happening locally because of shelter-in-place protocols and travel restrictions.

We estimate that in China—where many shoppers want products from leading international brands, including luxury labels—the number of cross-border ecommerce buyers rose by almost 25% in 2020, as consumers took advantage of both direct sales from brand websites and marketplaces that have opened the vast Chinese market to non-Chinese products.

Once relegated to the children’s market, virtual characters are entering the mainstream in China. Fictional as these digitally rendered avatars may be, they hold real jobs, from pop star to influencer, to even news anchor. And they’re becoming increasingly interactive and humanlike, thanks to improvements in technologies such as AI, motion capture, and virtual reality (VR). Recent advancements in augmented reality (AR), in particular, have enabled virtual avatars to step out of social media and make live appearances alongside flesh-and-blood celebrities.

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Alibaba also launched a revamped Tmall Luxury Pavilion featuring AR try-ons and 3D showrooms. The power of livestreaming drove conversions. Top influencers Austin (Jiaqi) Li and Viya drove a combined RMB 20 billion ($2.90 billion) worth of sales during livestream marathons lasting a dozen hours or so each, with Li’s session alone drawing 250 million viewers.

Luxury brands soon followed suit—a move hastened by the near-total absence of tourists from China, who make a huge contribution to France’s luxury brands in normal times. Our revised estimates assume a minimal impact on ad spend in France in Q1, since the steep escalation in infections and lockdown only came in mid-March.

Both were most common among 25- to 34-year-olds, affluents, and people living in urban areas. Ownership of smart TVs rose 4 percentage points, to 49.3%, and smart home products benefited from a similar boost; nearly 17% of those polled owned a smart home device, such as a smart appliance or a security system they could manage via a mobile app. In affluent households, that share was near 20%.

“Women hold up half the sky,” former Chinese leader Mao Zedong famously said. More than fifty years on, women in China are doing so online, driving digital trends and fast becoming a cohort that marketers ignore at their peril.

That group included Argentina, China, India, Mexico, Poland, Saudi Arabia, and South Africa, as well as the UK and the US. By contrast, only 29.2% of internet users in Russia had recently watched video via a subscription service. The digital audio market is evolving, but radio hasn’t gone away.

The first is a short survey offered via mobile; it contains a key set of 50 questions and reaches mobile-only respondents (who tend to be younger, less affluent, and concentrated in emerging markets).

Readership held up much better among older cohorts and in affluent homes. Penetration of broadcast radio may be dropping, as just 47.6% of the sample population had tuned in during the prior month. However, more than half of males were recent live radio listeners in Q1, as were respondents in the most affluent homes and those ages 35 to 44 and 55 to 64.

Ownership of virtual reality (VR) headsets had slipped between 2018 and 2019, from 7.4% to 6.8%—but this remained greater than comparable shares in many other countries, including China (5.0%) and Indonesia (4.7%). Smart-home products are gradually taking off as well, reaching 11.9% of respondents in H1 2019. Here too, penetration was markedly higher among affluent web users and females.

Luxury brands soon followed, spurred in large part by the sudden cut-off of tourism from China and other Asia-Pacific countries. Consumers in Asia are among the keenest buyers of France’s luxury brands.