Ahead of China Consumer 2023, Focus speaks to Michael Ward, Managing Director of Harrods, about being the first department store in Europe to embrace Chinese payment methods such as Alipay, and infusing creativity into the brand’s digital interactions
Tell us more about how Harrods entered the China market
At Harrods, we have been actively involved in the Chinese market for over 10 years, building strong relationships with Chinese customers both in London and in China. We are proud to have been the first department store in Europe to embrace Chinese payment methods such as Alipay, showcasing our commitment to catering to the needs of Chinese customers. From day one, we recognised the importance of Chinese social channels, and our teams have been dedicated to regularly visiting the market to stay connected.
In recent years, we have taken significant steps to further strengthen our brand in China. One notable initiative is The Harrods Hive, where we bring together industry leaders and emerging creative talent. We have held networking events and industry-led discussions in Shanghai and Beijing, fostering knowledge exchange and nurturing connections within the creative community. The Harrods Hive has been instrumental in establishing us as a respected and influential player in the Chinese market, while also helping us to discover exciting new talent in the fashion and creative industries.
To expand our presence, we are now focused on introducing exclusive food and beverage offerings in China. In Shanghai, we have opened The Harrods Tea Rooms and The Harrods Piano Bar, providing a constant connection to our iconic Knightsbridge store.
Overall, our presence and continuous journey into the Chinese market have been marked by our strong efforts to engage and understand our Chinese customers. We value the long-standing relationships we have, and we strived to ensure that even when travel to London was not possible during the pandemic, Harrods remained a byword for luxury for our Chinese customers.
What major successes and growth has Harrods experienced in that time? How about challenges?
Like any business, we faced multiple challenges during the Covid-19 pandemic. However, in 2021, despite the difficult environment, Harrods successfully launched The Harrods Hive with our first event in Shanghai and opened the Harrods Tea Rooms in Shanghai. The Tea Rooms proved to be a significant success, providing a quintessentially British experience for Harrods’ Chinese customers who were unable to travel to the flagship store in Knightsbridge, creating a sense of connection and bringing the Harrods experience closer to customers in China even when borders were closed.
How critical is the China market to Harrods’ global strategy?
The Chinese market is extremely important to our brand’s international strategy. As one of the fastest-growing economies with a strong appetite for luxury goods, China represents a substantial current and potential client base for Harrods. The Chinese market provides opportunities for both growing sales in our Knightsbridge store and our e-commerce channels. We have recently soft-launched our .cn pages to grow our online presence in the region, with a full rollout to come in the near future.
Tell us a little bit about how Harrods connects with consumers in China. How does the Chinese market differ from other major markets you operate in?
One key difference is the distinct social media landscape in China. Platforms such as Weibo, WeChat, Xiaohongshu and Douyin (TikTok) hold significant influence among Chinese consumers. We have adapted our strategy to leverage these platforms and engage with customers in a more playful and creative manner. For example, we created custom WeChat stickers celebrating iconic elements of the Harrods brand, such as the Green Men and teddy bear, which have been extremely popular.
By infusing creativity into our digital interactions, we aim to strengthen connections and foster a sense of shared enjoyment with our Chinese customers. We also work closely with KOLs and influencers on these digital platforms for seasonal campaigns and to showcase our offerings in China, such as the Harrods Tea Rooms and the Piano Bar in Shanghai.
Overall, we have established and will continue to develop a well-rounded approach that incorporates multiple digital and physical touchpoints and embraces the unique characteristics of the local luxury market to effectively connect with our Chinese customers.
What are your thoughts and reflections on the Chinese consumer landscape today, and how has this changed over the pandemic?
The Covid-19 pandemic disrupted spending initially, but Chinese consumers’ strong appetite for luxury goods has returned. What we see now is a market shaped by the trends that accelerated during the pandemic, i.e., the consolidation of the digital evolution and the desire for experiential luxury. Adapting to these changes and understanding evolving preferences is vital for businesses operating in the Chinese market.
What do you think will be the hottest consumer trends in China over the next five years?
China’s consumer trends will continue to revolve around the next generation of fashion designers and the promotion of Chinese cultural pride. Emerging designers are redefining Chinese fashion by blending traditional elements with contemporary styles, and there is a growing demand for fashion that reflects Chinese culture.
The prestigious Yu Prize, of which I have been fortunate to have been a judge in previous years, along with our Harrods Hive series, supports and nurtures up-and-coming talents in China, providing exposure and opportunities for their growth, and we are proud to be shining a spotlight on some of the country’s very exciting creative talents.
What are Harrods’ future ambitions and plans in China?
China continues to be a very important market for us, and we have some significant plans for how we will extend our current footprint in China with new concepts, which will be announced later in the year. In addition, the recent soft launch of our .cn website will further grow our online presence in the region. This has been a significant investment for us, demonstrating our ambition to create a seamless experience for our Chinese customers, whether they are in Knightsbridge or at home.
If you could give one piece of advice to UK consumer brands entering China, what would it be?
Invest in a truly deep understanding of the local market and consumer preferences through customer research and, most importantly, spending time with key stakeholders and clients in the region. Building strong relationships, embracing the fast-paced movement, and recognising and understanding local trends and preferences will be the key to success for brands entering into the Chinese market.
China Consumer 2023
China Consumer 2023This article was produced as part of a series for China Consumer 2023.
Learn more about CBBC’s flagship consumer event of 2023 here.
