TikTok's looming US shutdown has 'serious' implications for luxury marketing
Plus: A guide to Xiaohongshu, or Red Note, the app "TikTok refugees" are flocking to ahead of the shutdown. And a short preview of Pitti.
Dear Dark Luxury readers,
The news in luxury this week is dominated by news of the potential shutdown of TikTok, one of the largest social media platforms in the world, and a key marketing channel for the luxury industry.
TikTok plans to shut off its app for US users on Sunday if the US Supreme Court does not intervene to block the ban, according to The Information. In that case, users will reportedly see a pop-up about the ban with a link to download their data.
That is causing immediate problems for major luxury businesses who use it to market their wares. It’ll probably get worse in the medium term too, as luxury companies lose one of their main outlets to appeal to younger, affluent, American consumers.
The ban on TikTok happened because of political concerns in the US about Chinese influence on American consumers. Ironically, some of those consumers are already flocking to another, even more explicitly Chinese-owned app called Xiaohongshu, or Little Red Book, or Red Note. Many luxury firms are already on that platform, but it’s unlikely to replace even a fraction of the influence of TikTok in the US — it currently doesn’t even have an English translation function.
Alfred is at Pitti Immagine Uomo this week, the world’s biggest menswear show. He spoke to Nick Wooster, the US fashion consultant, about why zombie brands should be left to die. Style and fashion commentator Eugene Rabkin spoke to him about the “egregious” price inflation in the luxury industry, and how that has created an opportunity for smaller, often family-owned, brands to thrive. Last but not least, Alf has discovered a novel, design-led solution to supply chain problems in luxury, from a start-up luggage brand. More on the nitty gritty of Pitti in Friday’s newsletter.
Conrad and Alfred
The consequences of a TikTok shutdown for luxury
The impending potential shutdown of TikTok in the US is already having “serious business implications” for the luxury industry, according to a source at a media buying agency who manages advertising spend for clients including a top three luxury fashion brand, and luxury automotive and spirits brands.
The initial challenge for media buyers, who direct the hundreds of millions that the luxury industry spends marketing its products, is securing refunds for current media investment, or re-routing it from TikTok in the US to other markets.
“We’re dealing with the fallout around the ban and what it will mean for the money we, as a media agency, have pre-committed and signed up in advertising deals with TikTok in the US,” the source said.
Beyond the immediate problem of getting money back for paid campaigns that will not run in the short term and unpicking pre-agreed local or global deals with TikTok, there are wider, longer-term implications for the luxury industry.