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Burberry and Tencent team up for concept stores

by ace

Burberry image right

Burberry partnered with Chinese technology giant Tencent to launch a luxury concept store using social media interactions.

The British retailer opened its first “social retail store” on Friday in Shenzhen, China’s technology hub.

The companies want to launch the concept on Burberry’s network in China.

The link comes when tensions escalate between the two countries, with China’s ambassador to the United Kingdom saying the relationship was “seriously poisoned”.

The Shenzhen social store is the first stage of the partnership, with the aim of positioning Burberry as an innovator among Chinese buyers, who account for about 40% of its sales.

“This marks a change in the way we engage with our customers,” said Marco Gobbetti, Burberry’s chief executive. “When it came to innovating in the social and retail areas, China was the obvious place to house some of the luxury customers with the most digital experience.”

Tencent’s WeChat social messaging platform, China’s equivalent to WhatsApp, plays a big role in this new customer experience. The application has more than 1 billion users in China.

A WeChat program allows buyers to unlock exclusive content and personalized experiences that they can share on their social media networks.

All clothing is tagged with QR codes that show the product information on the customer’s phone when scanned.

Burberry image right

“It is a unique space to test, learn and test innovation that can be expanded to the rest of the Burberry network in China,” added Gobbetti.

Retail analysts praised Burberry for its hybrid store, which combines online shopping with traditional traditional retail.

“Burberry is knowledgeable and is ahead of the curve in understanding the importance of social media and e-commerce to reach Chinese consumers,” said Shaun Rein, founder of China Market Research Group.

“Many luxury brands focus on bricks and mortar and in-store experience only while the Chinese wish to buy online.”

Luxury brands are selling heavily in China, as residents are unable to travel abroad with expensive foreign purchases due to travel restrictions on the coronavirus.

“China is the best bet among the most digitally and socially informed consumers and a large market for luxury retailing,” said Siddharth Pathak, a partner at management consulting firm Kearney.

“The use of digital in stores has been prevalent in China for a few years, but it definitely takes it to a whole new level.”

Headwinds

However, Burberry may face upwinds against rising political tensions between the UK and China.

On Thursday, Beijing’s ambassador to London, Liu Xiaoming, said the relationship between the UK and China was “seriously poisoned”.

The two countries have recently clashed over a number of issues, including China’s ban on Chinese technology firm Huawei from the UK’s 5G mobile network and China’s new security law imposed in Hong Kong.

“Burberry could be caught in the tension between the UK and China. The Chinese could boycott the brand if the UK continues to be seen supporting the Hong Kong riots,” warned Rein.

The British luxury brand has 61 stores in China.

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