Burberry and Tencent team up for concept stores
Burberry has partnered with the Chinese tech 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, the Chinese technology hub.
Companies want to implement the concept through Burberry’s network in China.
The link comes when tensions rise between the two countries, with the Chinese ambassador to the United Kingdom saying that the relations have been “seriously poisoned”.
The Shenzhen social store is the first phase of the partnership, aimed at positioning Burberry as an innovator among Chinese buyers, who represent around 40% of its sales.
“It marks a change in the way we interact with our customers,” said Burberry CEO Marco Gobbetti. “When it came to innovating in the social and retail sectors, China was the most obvious place to go to the home of some of the most experienced luxury customers of digital technology.”
Tencent’s WeChat social messaging platform, the Chinese equivalent of WhatsApp, plays an important role in this new customer experience. The app has over 1 billion users in China.
A WeChat program allows buyers to unlock exclusive content and personalized experiences that they can share on their social networks.
All clothes are labeled with QR codes which show the product information on the customer’s phone during the scan.
“It is a unique space to test, learn and experience innovation that can be extended to the rest of the Burberry network in China,” added Gobbetti.
Retail analysts praised Burberry for the hybrid store that combines online shopping with traditional brick and mortar retail.
“Burberry has been an expert and pioneer in understanding the importance of social media and e-commerce in targeting Chinese consumers,” said Shaun Rein, founder of the China Market Research Group.
“Too many luxury brands focus on brick and mortar and in-store experience only while the Chinese want to shop online.”
Luxury brands have sold heavily in China as residents are unable to travel overseas with expensive overseas shopping expenses due to travel restrictions on the coronavirus.
“China is the best bet with the most digital and sociable consumers and a large market for luxury retail,” said Siddharth Pathak, partner of the management consultancy firm Kearney.
“The use of digital in stores has been widespread in China for a few years now, but this definitely takes it to a whole new level.”
However, Burberry could face upwinds given the growing political tensions between the UK and China.
On Thursday, Beijing’s ambassador to London, Liu Xiaoming, said that the relationship between the United Kingdom and China had been “seriously poisoned”.
The two countries recently clashed over a number of problems, including the ban on Chinese technology company Huawei from the UK’s 5G mobile network and the new Chinese security law imposed in Hong Kong.
“Burberry could remain involved 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,” Rein warned.
The British luxury brand has 61 stores in China.