New Dream Jobs: This OZY original series shows off the best jobs of tomorrow.

New Dream Jobs: This OZY original series shows off the best jobs of tomorrow.

When the Chinese esports team of FunPlus Phoenix won the League of Legends World Championship in November, they didn’t just go home with the elaborate jewel-encrusted winner’s trophy. They were also presented with a dark maroon trunk decorated in the famous pattern of French fashion brand Louis Vuitton. It was the headline act of a Louis Vuitton collaboration with Riot Games, creators of League of Legends.

The tie-up between one of the world’s most recognizable luxury brands and the most played PC game on the planet is no coincidence. It’s one of a growing number of collaborations between the luxury goods and gaming industries that are tapping into a unique confluence in the markets of these two mega sectors in China, which leads global growth in both. The partnerships are turning China’s burgeoning league of gamers and developers into brand ambassadors for luxury products.

In early 2019, Canadian cosmetics firm MAC launched five limited-edition lipsticks based on characters from the online game King of Glory, one of the most popular amongst Chinese gamers. Their entire stock sold out within 24 hours. Italian fashion house Moschino has partnered with the role-playing game Sims.

Some luxury companies are creating branded games of their own. In 2018, Hermès released a branded mobile game called H-pitchhh. Guerlain also joined the party, with a Tetris-style game hosted on China’s ultrapopular messaging platform, WeChat, which attracted 10,000 players in its first 10 days. Gucci has created its own Sega-inspired game. Dior recently launched a mobile game to promote the opening of its flagship store in Shanghai.

The attraction for both markets is a demographic overlap that’s unparalleled among major economies. In the West and Japan, luxury consumers are mostly older and gamers are younger. While luxury consumption is led by women, men dominate gaming. In China, the markets are almost identical.

I’ve learned about games through clothing brand ads and have been introduced to new brands through games … Alice Yu, Beijing-based web developer

McKinsey & Company reports that the luxury market is driven by the post-1980s generation with an average annual spend of $5,900 (RMB 41,000) and consumers born after the 1990s, who spend, on average, $3,600 (RMB 25,000) a year. A separate report by the Boston Consulting Group suggests that 78 percent of China’s luxury consumers are under 35.

In keeping with global trends, women account for a majority — 71 percent — of China’s luxury spending. But they also form 58 percent of the country’s 484 million-strong gaming population. In addition, two-thirds are between 19 and 35 and are generally middle and upper-middle class.

“Chinese luxury buyer demographics overlap with hobbies normally associated with a younger audience, such as gaming,” says Arnold Ma, CEO of digital creative agency Qumin. “A combined social content and gaming strategy for brand campaigns will not only have the most reach, but more importantly provide a far more authentic message to Chinese luxury buyers.”

It’s a strategy that’s working. Alice Yu, a 27-year-old web developer from Beijing, says she has “learned about games through clothing brand ads and have been introduced to new brands through games I’ve played.” As a mobile gamer with disposable income, Yu is precisely the type of consumer these collaborations target.

Experts widely expect China to be the main driving force behind future growth in both the global luxury and gaming industries, further explaining why targeting Chinese consumers is at the core of these partnerships. According to McKinsey, China’s luxury market will double in size to $170 billion (RMB 1.2 trillion) by 2025 — meaning the country would account for 40 percent of worldwide sales for luxury brands. The country’s PC gaming market already accounts for half of global revenues, with market research firm Niko Partners predicting it to reach $16 billion by 2023.

China’s mobile gaming industry is bigger still. Beijing-based data consulting firm Analysys predicts that the mobile gaming market in China will increase 10 percent to over $30 billion by the end of 2020, and a further 8.4 percent the year after that.

With the economy slowing and consumers cutting down on spending, the luxury market — which has so far weathered the trade war with the U.S. — could face challenges. But equally, that could prompt brands to seek even stronger tie-ups with sectors less likely to be impacted, such as gaming.

Mobile platforms are at the heart of both China’s gaming industry and the marketing strategy of luxury brands, providing a tailor-made launching pad. The multifunctional nature of platforms like WeChat, which can host e-commerce stores, adverts and in-app games, also offer the perfect environments.

“In a country with staggering levels of social media adoption, and where facial recognition instead of cash or card is par for the course, gamification is becoming a must-have element of the marketing mix for luxury brands,” says Marie Tulloch, senior client services manager at marketing consultancy Emerging Communication. Brands spent $55 billion on internet advertising in China in 2018, so the cost of developing a branded game is barely a drop in the ocean. With Chinese gamers playing mobile games for an average of 18.5 hours each month, they are a ready-made and captive audience.

That’s why collaborations between brands and gaming are likely to become more popular as companies look for new ways to break into the increasingly important Chinese market. “The benefit to the luxury sector of utilizing gaming is unlikely to diminish, and the rise in the popularity of livestreaming and esports broadcasting has the potential to extend it further,” says Tulloch.

The Louis Vuitton logo-embossed trunk is just the start.