Louis Vuitton’s recent moves on the social media platform Little Red Book (Xiaohongshu) highlight two key trends that the luxury eCommerce ecosystem is battling with.

Vertical Integration

🔻Louis Vuitton during their Voyager shows this April gave the mass market consumer a chance to rewatch the show, which also broke the RED livestream record with 470k unique viewers.

🔻Alongside the livestream, the brand also launched a pop-up mini program on RED, driving direct conversion from the livestream into commerce through a limited portfolio of items from the show.

🔻This itself is by no means revolutionary. In fact, they ran a livestream on RED in 2020, which was met with a much more muted response, but it is the latest in a string of interesting moves by the brand to flesh out its omnichannel digital ecosystem – mini-program on JD.COM, mini-program on Douyin (Tik Tok), now a pop-up mini-program on RED.

🔻These channels serve as a combination of direct connection to in-platform marketing (Douyin and RED), commerce generation (JD), as well as the drive toward the next trend.

Private Domain Traffic

🔒There is a tension between luxury brands and eCommerce platforms – between a democratized experience and a tailored experience.

🔒Tmall was the first pond for brands to dip their toes in to expand eCommerce coverage with access to huge audiences and incremental revenues, the platform offered a (using slightly exaggerating wording) white-labelled brand experience to access these new consumers (some level of branding is of course still available).

🔒Now different models are being offered by platforms looking to attract brands to their ecosystems, conceding some ground when it comes to standardized experiences.

🔒In an overblown simplification, platforms offer brands a virtual billboard, exposing the platform’s audiences to a sign that points directly to the private domain of the brand.

🔒Depending on the platform this private domain can be a pseudo-one, looking, to all intents and purposes the same, but behaving slightly differently behind the scenes (different API integrations, data ownership, traffic management abilities), while others directly link to the WeChat store.

🔒Louis Vuitton’s moves appear to be focused on two desires – a consistent LV experience regardless of channel and ensuring all roads lead to Weixin/WeChat (and WeCom for CRM).

Questions for the future?

➡️Will LVMH’s big fashion brands make it onto TMall and in what capacity? Likely the group will focus on driving toward private domain, but the platform is unlikely to concede to this entirely.

➡️At what point will all brands demand integration into their private domain? With more platforms building their ecommerce capabilities they may look to gain brand market share by offering this, in turn putting pressure on other players to follow suit.