What global luxury brands can learn from Chinese tea chains

Key points to remember:

  • 2022 begins with uncertainty in the air for luxury brands hoping to develop comprehensive marketing plans in China.
  • Tea chains like Hey Tea and Nayuki Tea offer examples of reaching as many consumers as possible through more discreet marketing methods.
  • Smart collaborations, real spokespersons, and thoughtful nostalgia are just three strategies that can attract and retain young consumers this year.

With China starting 2021 as a much needed retail bright spot and ending it arguably more complicated than ever – due to a extensive and continuous government repressionthe big question is what 2022 might hold for luxury brands. With government regulators closely monitoring everything brands do and say in their marketing efforts, advertising costs are rising, celebrities and influencers (and their taxes) under the microscope, and the rise of nationalism of national brands, the current state of luxury marketing in China is murky to say the least.

Yet this tense environment could very well help luxury brands to evolve beyond the relatively traditional marketing approaches they have long used in China. This is especially true if brands can infuse some of the proven content commerce-based strategies used by successful Chinese tea chains, including Hey Tea and Nayuki (Naixue) Tea. Over the past year, both chains have continued to gain the attention of consumers and investors, with Hey Tea to receive $ 500 million in funding last summer from IDG, Tencent, Hillhouse Capital and Sequoia (pushing the company to a tantalizing valuation of $ 9.3 billion). Nayuki, meanwhile, raised $ 656 million last June when it went public in Hong Kong, though share the prizes slipped to around HK $ 7 ($ 0.90) today, from a high of HK $ 16.98 ($ 2.18).

Next to a new generation of coffees Now giving global incumbents like Starbucks a real bang for their buck in China, Hey Tea and others have managed to differentiate themselves in a saturated market with simple yet effective formulas. Here, we highlight some of the things that help these affordable and ubiquitous teahouses make billions every year.

Be smart in your collaborations

One area where Hey Tea (and, to a lesser extent but still, Nayuki) has always excelled is in smart brand collaborations that the chain knows will resonate with its primary consumer – typically, but not exclusively, young professionals from level one to level three cities all over China. Collaborations have long been a fixture in China, but have grown even more important over the past two years.

In the first months of China’s provisional reopening in the summer of 2020, Hey Tea worked with Airbnb to promote the concept of ‘stay’ among potential travelers who had just spent months locked in their homes, recruiting the actress and musician Lin Yu-pin to organize a getaway to Shanghai decorated in bright colors inspired by a Hey Tea mango drink and amply supplied with Hey Tea products. Opportunities to win weekend stays were offered through social media – a case of mega-collaboration used to generate engagement and awareness for brand partners rather than just selling products.

Hi tea x adidas. Image: Hey Tea Weibo

Since then, Hey Tea has made unexpected collaborations a key part of its core marketing strategy, leveraging its distinctive, brightly colored drinks as recognizable touchpoints. A very popular collaboration saw Hey Tea teaming up with adidas on a limited-edition ZX sneaker model inspired by the chain’s popular “Succulent Grape” drink. The colourway of the sneaker featured various shades of purple on a milky white base and the beverage brand logo for a hot product that fuses the disparate but complementary youth trends of streetwear and fruity milk tea in an unexpected package that works. simply.

Hey Tea has also been smart about choosing a collaboration partner, working with global brands like Fenty Beauty and AAPE as well as domestic Chinese companies like QQ Music. Not to be outdone, his rival Nayuki worked with several international artists on limited edition cuts and partnered with the Palace Museum to produce a pair of brocade gift boxes based on imperial designs that consumers were encouraged to repurpose for storage of jewelry or other items. The big takeaway from the collaborations launched by Hey Tea and its competitors is simple: Chinese consumers are excited to see you launching so many collaborations – they just need to bring something new to the table.

Celebrity spokespersons aren’t everything

Unlike other Chinese brands, tea chains like Hey Tea rely less on celebrities or prominent influencers to spread the word, and rely on word of mouth and social media through loyal customers and microphones. -influencers. The latest promotional campaign for Hey Tea, the first branded film in the company’s nine-year history, featured real-life creations – including a home chef, bloggers, photographers, choreographers, and fans of ACG (anime, comic book, and game) – which resonate with the basic consumer and provide a down-to-earth relationship. With its latest branding effort, Hey Tea seeks to align itself with people who live somewhat ambitious but still realistic lifestyles. Real influencers, in their own way.

The ongoing celebrity crackdown has prompted luxury brands to scramble to find more secure spokespersons and brand ambassadors. As Jing Daily noted previously, this has led some brands to look beyond movie stars and turn to famous athletes, subject matter experts and mature celebrities. While Hey Tea and rival Nayuki have both teamed up with big name influencers – Nayuki, most notably, with figures like livestreamer Zhang Dayi – there are signs that these channels may be looking to build relationships with their audiences in a more low-key way in 2022.

Luxury brands can and should take note, as long-tail marketing in China should not only be about what drives immediate traffic now, it should be about inviting viewers to participate in a long-term association with the Brand.

Loewe x Spirited Away capsule collection. Image: Loewe

Nostalgia remains a major asset

As Jing Daily recently noted, “nostalgic marketing is particularly effective on young Chinese because, due to China’s historically collective culture, Chinese tend to value collective memories and form collective identities. Therefore, when a nostalgia campaign targets shared memories, the return has the potential to be many times greater than in an individualistic society. “

Hey Tea and Nayuki have been quick to use nostalgic levers to retain consumers over the past couple of years, and there’s no indication they’ll be stopping anytime soon. Hey Tea – through its previous collaborations with Chinese skincare brand Pechoin and the instantly recognizable creamy White Rabbit candy – has skillfully harnessed the closely related trends of nostalgia and Guochao, worn by young consumers interested in local brands. .

As the country’s post-80s and post-90s take the wheel in terms of luxury consumption, the allure of nostalgia draws brands across the price spectrum to touch the hearts of consumers. Global deployments like the new Loewe Abducted as if by magic capsule collection (following last years My neighbor Totoro capsule) in Chinese niche perfume brands that effectively reproduce the perfumes of consumers’ childhood, nostalgia remains a very strong draw and spending engine in China. The key, for global brands in particular, is to avoid launching a nostalgic-tinged effort that seems awkward or too flattering to the market.

Loewe’s effort, building on two beloved Japanese animated films, works in China precisely because it doesn’t seek to bend to a single market or consumer base – it looks and feels global with universal appeal. This is part of the reason why last year’s Gucci x Doraemon Year of the Ox capsule succeeded in China – it was more than nostalgia for nostalgia, and was as appealing to a consumer in Shanghai as for a Gucci enthusiast in Paris.

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