CHINA. The number of Chinese travellers mentioning more affordable luxury brands on social cross-border e-commerce app Little Red Book (Xiao Hong Shu) is on the rise, according to a report by digital intelligence firm L2, Jing Daily reports.

The report highlights that, over the past year, accessible luxury brands have experienced the highest growth when it comes to brand mentions.

Chanel came out top with 2.24 million mentions in the last year, with Dior following close behind at 2.14 million mentions. Hugo Boss saw a +271% jump in mentions, with Bally and Max Mara both achieving growth of +133%.

Little Red Book, commonly known as ‘Red’ in English, has more than 5 million monthly users. The app allows users to research what products they want to purchase when travelling abroad or to share information about what they have bought. It has recently added a cross-border e-commerce feature that is mainly utilised by daigou as well as some official stores by Korean beauty brands.

L2 says one reason for the growth in accessible luxury mentions might be a consequence of the price gap between China and retailers abroad

L2, which researched the number of times brands get mentioned on Little Red Book, said the app’s users are still talking about big luxury labels more than other subjects. Chanel came out top with 2.24 million mentions in the last year, with Dior following close behind at 2.14 million mentions. Hugo Boss saw a +271% jump in mentions, with Bally and Max Mara both achieving growth of +133%.

L2 Head of Asia Pacific Research Danielle Bailey said one reason for the growth in mentions might partly be a consequence of the price gap between China and retailers abroad. “What we’re seeing is that specifically with brands based out of the USA, the difference in pricing between a lot of accessible luxury brands, like Alexander Wang or even Michael Kors is significant,” she said. “The price differential on a percentage basis is much higher on accessible luxury than it is on your pure luxury brands. It means that when you travel, it makes much more sense to buy it overseas.”

However, the trend for the watches and jewellery sector is the opposite. Only one brand in the top ten list for highest growth in mentions is not an ‘absolute’ luxury brand, which suggests that Chinese consumers might be trading up, the report says. DeBeers was at the top of the list with +181% growth, while Pandora was the most talked about brand with 33,000 mentions.

L2’s report highlights the importance of brands making the most of omnichannel strategy opportunities in China’s digital travel retail spaces so they reach consumers planning their shopping route online for their next trip abroad.

This article was originally published on JING DAILY, a Moodie Davitt Report content partner.