Updated: Dec 14, 2022
Actress Zheng Shuang in Prada's latest Chinese New Year campaign. Prada. Photo courtesy of Business of Fashion, 2021
Prada was founded in 1913 by Mario Prada, Miuccia Prada’s grandfather, who opened the first “Fratelli Prada” shop in Galleria Vittorio Emanuele II in Milan. At first the shop sold only high-quality bags, trunks, and travel accessories for wealthy people living in Milan: in fact, in 1919 Prada became the official supplier to the Italian Royal House, which meant its own logo was displayed on the coat of arms of the House of Savoy (Graves, 2020). Since that time, Prada has always been a reference for the Italian aristocracy and the Italian bourgeoisie. Over the years, the brand has expanded not only in Italy but throughout the rest of the world, gaining partnerships with many notable artists and sponsoring major performances. In 2010, the first Prada E-shop was launched in Europe and the United States, then in the BRIC countries (Brazil, Russia, India, China, and South Africa) (Dheeraj, 2018). The company undertook a geographic expansion until 2016 in order to increase physical stores operated directly in the most important cities around the world, including Chinese cities like Beijing and Shanghai (Graves, 2020).
The average age of China’s population is 37 years old (Textor, 2022), which makes it one of the world’s youngest populations. At the moment, the average income per capita is lower than in the United States and Europe, but the growth rate shows that China is catching up fast, thus a new wave of luxury customers with good spending power is expected in the next decade (Cheng, 2021). The forecasts agree that the percentage of Chinese buyers will represent close to 40% of the global luxury market in the next fifteen years. In particular, this trend applies to Chinese Millennials, known also as “Generation Z '' referring to people born between 1980 and 1996, who are currently the biggest consumers of luxury goods. Younger Chinese consumers are no longer impressed, like in the past, by craftsmanship or well-known names, but they are constantly looking for meaningful interactions with brands and they want brands to play a prominent role in society. Therefore, brands are keen to enhance their face（面子 miànzi） (China Mike, 2020), which has been an important part of Chinese tradition and society for thousands of years . Face represents a fundamental element in interpersonal relations, because it is synonymous with personal identity and the consequent social positioning of an individual within a small group and in an even broader sense within society, such as credibility and reputation. The “face” of a person (or brand) fails when one's personal performance within a group falls below the expectations of others or even below the minimum acceptable level. One could argue this is partially why many wealthy Chinese millennials try to do everything possible to meet the expectations of other people, and therefore why they buy name-brand luxury products (Gma Marketing To China, 2016). Conversely, it is extremely important for luxury brands to target marketing strategies to the most up-to-date luxury customers and maintain their customer-producer relationship with them in order to remain at the top of the market.
Since 2017, Prada has undertaken a series of investments to attract young luxury buyers from China through digital integration. The brand attempts to build a community promoting artistic and cultural events and content that demonstrate the innovative values of Prada customers can relate to. Prada thus aims to become a stronger brand in China thanks to the marketing strategies they have adopted. Already, the general demand for Prada products in China has increased by 52% since the second half of 2020. Notwithstanding the closures in 2021 of physical points, due to the Chinese government's restrictive measures, sales in the retail channel increased by 60% compared to 2020 and 8% compared to 2019, totalling EUR 1.281 billion (Law, 2021).
Prada's first concrete efforts in digital integration concern online distribution. In recent years, this has actually adopted a practice of minimising retailers in order to have more control over its products, especially regarding pricing and through important partnerships with Chinese e-commerce platforms, such as Tmall (天猫 tiān māo) and JD (京东 jīng dōng) which improved and enriched its client base and strengthened its brand awareness in China as well as launching the first website. The website was launched in 2017 and was based on a "mobile first" approach, which allows a complete integration with the network of physical shops and social networks and uses typical Chinese payment methods such as WeChat Pay. It covers all types of products for men and women, using personalised services, such as the "virtual assistant" in chat and the ability to book an appointment in the store to collect the purchase or consult a personal shopper (Achim, 2021). Prada’s first shop in Tmall, a B2C e-commerce platform, was launched in 2020, and in one month, the online store had over 54,000 followers. Tmall's flagship products allow brands to reach Millennials who want an authentic item delivered to their doorstep and a personalised experience. Moreover, for luxury players on Tmall, the site offers strategic support such as digital marketing, e-commerce operations and data analyses (Prada Group, 2020).
The use of Chinese social media and social commerce in general have contributed to the growth of the brand among Chinese Millennials. In particular Live Commerce, a type of online shopping based on live streaming, and Synchronic Views, a physical and digital format of communication that brings together two audiences in two different parts of the world, have helped to drastically mark the shopping habits of Chinese young consumers. In 2021, two Prada fashion shows were held simultaneously in Milan and Beijing via live streaming on giant screens, which gave the audience the opportunity to experience a double fashion show in two different time zones (Caiazzo, 2021). This decision has resulted in an increase in the popularity of the brand.
Chinese social media, including WeChat (微信 wēi xìn), the most popular social network across Chinese consumers, is also used extensively by Prada. The decision to meet Chinese customers where they are at represents an official account for a one-to-one communication to enhance customer relationship management, creating a perfect brand tool to launch marketing campaigns that can leverage the platform's online/offline capabilities to increase the number of followers and learn more about its customers. By clicking on the link in the brand's WeChat publishing channels, customers can access the brand's official WeChat account for product information. On this page, there are additional links to ecommerce WeChat Mini Programs, guiding users to make the purchase (Liu, 2020).
In recent years, China has seen a growth of Key Opinion Leaders (KOLs), celebrities who are paid by companies to sponsor their products and thus increase sales. Although Prada has seldom partnered with celebrities in the past, in 2019 at the presentation of the SS20 men's collection, they established a collaboration between Chinese artist Cao Fei (曹斐 cáo fěi) and musical star Cai Xukun (蔡徐坤 cài xú kūn). This powerful marketing tool enabled Prada to increase the brand's visibility and popularity, particularly among Millennials, leading to increased sales (Prada Group, 2019).
In conclusion the luxury industry is evolving very rapidly, and digital marketing has grown in importance. In particular, the Chinese market is constantly growing because Millennials are looking for digital as well as personalised experiences. Over the course of the digital revolution, Prada undertook many initiatives in the Chinese market, and it was able to capture the attention of young Chinese customers increasing brand awareness thanks to e-commerce strategies, Live and Social Commerce, and the participation of KOL. In the coming years, Prada would benefit from concentrating on developing their localised content strategy and personalised platforms, as Chinese social media and digital communication demands an extremely high level of creativity and personalisation.
About the Author:
Giulia Busnardo 竺明玉 is a sinologist, and graduated both at Ca' Foscari University of Venice and Capital Normal University in Beijing. After winning the 2022 America Youth Award and the 2022 CNU Best Alumni Award, she is currently pursuing a master's degree programme in Chinese Language and at the same time attending a master course in Leadership for International Relations. She’s also collaborating with several periodicals and blogs, including 紫竹留声报纸 （ Zǐzhú liú shēng bàozhǐ） based in Beijing and European Guanxi, promoting in this way Chinese language and culture in Italy. You can find her here on LinkedIn ( linkedin.com/in/giulia-busnardo-竺明玉-753041245 )
The opinions expressed here are those of the writers and do not represent the views of European Guanxi.
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