The luxury goods industry has always had its niche in the market, catering to those with a taste for class and beauty. Needless to say, the competition within the industry is always rampant, with companies constantly grappling for the top spot. In fact, the action is hard to miss, so much that even tech giants such as Google, Amazon, and Alibaba have decided to play the game as well. Amazon just recently entered into the fashion market, and so far has achieved great success in the field. Meanwhile, Alibaba launched the Luxury Pavilion, an e-commerce platform devoted to luxury goods. These pushes have undoubtedly shaken the industry, putting new giants into the mix, and causing the traditional European luxury brands to experience the full friction of tough competition. Only a few months ago, Johann Rupert, chairman of the Cartier Group, predicted that European luxury goods companies would soon be outpaced by the tech giants, and to stay on top, they would need to prepare themselves for the era of e-commerce.


The reason behind this phenomenon and why the industry is headed this way is the rise of social media, and how key opinion leaders portray luxury goods online. Consumers scour through their phones, on WeChat, TikTok, Instagram, and Twitter, and see their idols flashing their new outfits and gear. And naturally, this influences the mindset of the consumers, creating a massive demand for the latest and hottest assets through online channels. Because of this, the “grandfathers” of the luxury industry are faced with a serious test against the younger, more trendy companies penetrating through digital platforms. Ever since the financial crisis of 2008, many major European luxury brands have suffered a loss of performance.

Only a handful of traditional luxury companies withstand the hostile competition today, thanks to their implementation of a successful strategic plan to maintain stable business growth and adaptability. For example, LVMH remains successful through their aggressive acquisitions, mergers, and multi-branding strategies. Likewise, Chanel and Hermes have exquisitely built and sophisticated their own independent brands to firmly seize the market. There are also other smaller family businesses that have maintained high returns as a result of their smart operational strategies. But the question is, what’s the secret to stay on top?

The answer is obvious. As mentioned earlier, tech giants have entered the fray, and have found massive success due to their scale and use of the online market. E-commerce is the faster way to sell, and the easier way to promote a successful brand. Scalability on the internet is key. Sponsored ads, keyword optimization, content marketing, and even key opinion leaders. The best way to grab the attention of the consumers is to catch them in a place they like to go everyday: the internet. And of course, the tech giants take advantage of their personnel, having all the skills in the world of data, digital, and the internet. In China, no one is unfamiliar with Alibaba’s Tmall, or Jing Dong, capturing a total of over 600 million users.

The transformation in the luxury industry is real. Jump onto the tech, or sink. While it may be true that a select few big names have survived off their brand name itself without much innovation, the safe bet is to always innovate and be adaptable to the market. Can your corporation leverage e-commerce, tech, and digital marketing strategies for your luxury brands? Stay ahead of the competition with the right talent and the right people, and make an imprint in the industry.