What’s Burberry’s Next Step in China?

Liang states that they were “super tech savvy” and the pop-ups had “AR functions so the statue could move.” Although Chinese consumers now expect new and innovative digital experiences from Burberry, the roll out’s conviction was less impressive. “We couldn’t quite understand how the concept linked with the new bag and back to the brand. Also, the bag was being held up as a celebration of women’s power, which is groundless. Consumers know it is just leveraging a growing trend for shoulder bags.”

Until now, Burberry excelled at folding its heritage into its digital advancements. These days, China’s shoppers are noticing its lack of storytelling and indistinct values — both of which are vital attributes for younger audiences, in particular. Now, research from Liang’s agency shows that young post-85-born shoppers in China are starting to bore of consumerism.

This means they are becoming immune to what she terms “three-pronged tactics” or strategies such as women’s empowerment, creating scarcity, and, lastly, using celebrities and KOLs. “These concepts are all good, but what do they have to do with the brand?” Should these younger consumers  instrumental to luxury consumption fall off, luxury will face damning ramifications globally.

What is Burberry’s future in China?

After a rebound in sales since last December, driven by a strong recovery in China (and South Korea), Burberry upgraded its full-year profit forecast in March. However, the challenge for luxury now is to acquire new fans while retaining older ones. Fan Tu, the account manager at Hot Pot China, outlines how, on the whole, Chinese consumers follow brands rather than designers (she counts Phoebe Philo as the exception).

With this in mind, Tu believes the brand implemented a list of recent revisions to attract newer Chinese fans: “The recent in-house changes, such as the new designer, a logo reboot, monograms, and brighter colors and fabric collages all align squarely with the tastes of the current younger generation.” And, she adds that with the Tier 1 city younger urban elite likely to prioritise Celine or New Bottega, this means “Tier 2 and beyond” are likely to be its “new hunting ground.” 

Additionally, the older generation is likely to find that current designs conflict with the Burberry they know and love. Liang agrees, highlighting the shift from something “very british and elegant, like a whispering luxury” to designs that are “too loud” and so different that “nothing looks like Burberry.” She points out the “limited” remit of the localized team which can only select celebrities and adapt content for different platforms. “From a design or product perspective, Chinese consumer needs aren’t being communicated back to headquarters, so we see a detachment there,” she says.

Burberry Spring/Summer 2021 collection features marine-themed hoodies and T-shirts. (Burberry’s Weibo)

With the fallout from the Xinjiang cotton crisis now being seen as a US foreign policy crisis, every luxury leader wants to know how they will be affected. Travers-Smith suggests that political storms such as this flare-up can hold headlines for a number of days. Although media exposure was “significant both in and outside of China,” he thinks it won’t trickle down to the loyal Burberry consumer. “Typically, brand fans will be aware of the political context but very few will be affected deeply enough to change their luxury consumption habits.”

But what of the new fans?  The company has often fallen short in its storytelling and it is ignoring its latest issue by keeping Weibo dark. To acknowledge it would refresh netizens’ memory, and any statement might cause anger, if not in China, then outside. With the Biden administration applying continued pressure, Beijing might well retaliate and Burberry is already in its sights. So, for now, it is staying firmly in the trenches.