The luxury industry landscape in Southeast Asia

This post is sponsored by Isentia.

Southeast Asia’s large population and growing purchasing powers present exciting and fertile ground for the growth of luxury brands in the region. The diversity and complexity of people, tastes and engagement methods with luxury brands in the region, however, demand a greater degree of understanding.

To uncover on the ground discussions of the top luxury brands in Singapore, Malaysia, Vietnam, The Philippines, Indonesia, and Thailand, we identified key trends, markets and brands that have led mainstream media coverage and social conversations. We looked at all mainstream media coverage and social media data around luxury brands across six markets in Southeast Asia between 1 October 2020 and 15 November 2020.

Notable trends:

1. Luxury versus income disparity and religious tensions

Luxury brands are clearly objects of desire in Southeast Asia, reflecting tastes and status. The prominence of luxury brands as symbols of status and material wealth also place them in positions of scandal and outrage as they are starkly juxtaposed against income disparity and religious tensions inherent to the region.

Netizens in Malaysia, for instance, noted that it was better to be rich with Chanel cotton pads and unhappy than to be poor and happy [MY:1]. A monk spotted with Hermès bags in Thailand garnered the ire of netizens who found such displays of wealth unbefitting of a monk [TH:1].

Particularly, religion can be used in a backlash against luxury brands. In Indonesia and Malaysia, mainstream coverage was dominated by exaltations to boycott French luxury brands such as Louis Vuitton, Dior, Yves Saint Laurent and Chanel [ID:1,2] [MY:1,2].

2. Celebrity and Korean-pop influence

Celebrity influence around brands was the most prominent in the Philippines. Mainstream media reported heavily on local celebrities Heart Evangelista, Sharon Cuneta and Kris Lawrence with their luxury items [PH:1,2,3]. Social buzz for the top four luxury brands in the Philippines was largely driven by discussions on local and K-pop celebrity brand ambassadors too [PH:1,2,3,4].

In fact, K-pop celebrities who were named brand ambassadors were the most consistent drivers of social buzz in the region. K-pop artist Sehun drove buzz for Dior in Malaysia [MY:1]; Kai for Gucci in Indonesia [ID:1]; Jisoo for Cartier [TH:1]; and Taeyong for Gucci, among others in Thailand [TH:1,2].

NOTABLE MARKETS

Singapore
Mentions of luxury brands both in digital journalism and social media stood out in Singapore when compared with other Southeast Asian countries. The business-centric coverage and banal discussions of luxury brands by netizens reflect the relative material wealth of Singaporeans and Singapore’s status as a global business hub.

Coverage from digital journalism on luxury brands in Singapore tended to adopt a business and profit-centred focus. Coverage was driven by articles that delved into LVMH and Tiffany’s price agreements in a US$16 billion takeover deal [SG:1,2], innovative business strategies, including the use of augmented reality at Dior [SG:1,2] and messaging apps at Louis Vuitton [SG:1], and profit earnings [SG:1,2].

Sharing her thoughts on the luxury trend in Singapore, Jenna Wang, senior insights manager at Isentia, noted: “A strong reflection of Singapore’s material wealth has been the continued interest in luxury products among Singaporean netizens despite the COVID-19 climate.”

Vietnam
Both coverage from digital journalism and social buzz in Vietnam are a testament to the rising purchasing powers of the Vietnamese, and their growing demand for well-made and meaningful luxury items.

News reported the local partnerships made by Chanel [VN:1,2], films of meticulously handcrafted Dior handbags [VN:1,2], and the moving story of Louis Vuitton’s chairman and CEO’s success [VN:1,2] to inspire Vietnamese shoppers with an image of success and status as they begin to reject fast fashion.

Such sentiments are mirrored in Vietnam’s social buzz, as numerous netizens shared about the must-have Yves Saint Laurent, Dior, Louis Vuitton and Gucci skincare, make-up and fashion items for every Vietnamese individual [VN:1,2,3,4].

“Vietnam is at its entry stage of the luxury industry, which has been fuelled by economic growth, the rise of eCommerce, celebrities, and international travels. The growing need of owning genuine products posed opportunities in the Vietnam market; however, luxury brands would need a strategic move to win over counterfeits and second-hand supplies,” said Nhi Tran, senior insights manager at Isentia.

Other markets

Ho Paik San, associate insights director at Isentia, on the luxury industry in Malaysia: “The demand for luxury brands in Malaysia has been dampened as countries continue to close their borders for tourism. Due to the drastic decline in foreign tourists, luxury retailers are moving to online shopping and this mode of shopping will become another major distribution channel for luxury goods in the country.”

Lady Ochel Espinosa, regional insights manager for Emerging Markets, SEA, Isentia, shared her thoughts on the industry in emerging markets.

“The Emerging Markets may offer the most potential, and even with the transition of 2020 to 2021 shaping up to be another soft year for the global economy, spending for luxury items remains resilient in this side of the world. Through actionable insights, we will discover and bust significant myths about the mindset and behaviour of emerging consumers.”

Brand analysis:

1. Digital journalism coverage

Chanel was the top luxury brand mentioned in digital journalism in three of six Southeast Asian markets – Malaysia, Vietnam and the Philippines. These were attributed to articles on a boycott of French brands in response to French President Emmanuel Macron’s speech on fighting “Islamist separatism” that angered Muslims worldwide [MY:1]; coverage on Chanel’s partnerships and placements with both global and local Vietnamese celebrities to inspire shoppers [VN:1,2,3,4]; and news on Filipino celebrities such as  Evangelista and Cuneta who showcased the Chanel items they owned [PH:1,2,3,4].

2. Social media buzz

Chanel was also the top luxury brand mentioned on social media in two markets. Buzz for Chanel in the Philippines was driven by compliments for Chanel’s Chance perfume [PH:1,2] and excitement over the global Chanel brand ambassador, Jennie Kim, a K-pop artiste [PH:1,2]. In Thailand, tweets translating an ad featuring Chinese actor Wang Yibo recommending Chanel’s N5 perfume [TH:1] and about a local brand that had copied Chanel’s style [TH:1] were widely retweeted and liked.

Gucci was ranked top five among luxury brands in terms of social buzz across all markets except Malaysia, owing largely to the fact that Kai, from K-pop group EXO, had been named a brand ambassador for Gucci [PH:1,2] [ID:1][TH:1].