September 13, 2011
NEW YORK – Luxury automakers such as Audi, BMW, Mercedes-Benz, Porsche and Ferrari towered over the luxury market on the Web in China, according to findings from a recently-released L2 Think Tank study.
Automakers accounted for nine of the top 20 brands in L2 Think Tank’s 2011 Prestige 100: China IQ. Luxury retailers such as Versace, Balenciaga and Miu Miu posted the lowest scores.
“I believe the luxury industry is going to be the best business industry in the next 10 years,” said Scott Galloway, founder of L2 Think Tank, New York, during a presentation at Hearst Tower Sept. 9 in midtown New York.
“In the next 15 years, we are going to add 600 million consumers,” he said. “The real wood behind this arrow is China.
“The reality is, in the prestige business, if you get China right you can do ok everywhere else and your shareholders will do fine.”
The L2 Think Tank team looked at a luxury brand’s Web site, social media efforts, digital marketing and mobile to determine its ranking.
Paving the way
Many consumers in China are going from no Internet, to mobile Internet, according to L2.
Therefore, luxury brands need to consider both their Web and mobile sites when defining their digital strategies for China.
The L2 study took into account a number of factors in Web, social media, digital and mobile efforts of each brand, such as Web site load time, translation efforts, Chinese search engine-optimization, presence on the top seven Chinese social media sites and mobile adoption.
The ratings were divided into five categories, including feeble, challenged, average, gifted and genius.
German automakers Audi and BMW, along with British fashion house Burberry, were the only three brands ranked into the genius section.
Audi’s multi-language, multi-platform mobile application was applauded as one of the main reasons behind the brand's high-ranking.
The automaker is also present on six of the seven major social media sites in China, and has uploaded more than 250,000 videos to YouKu, the Chinese version of YouTube (see story).
Burberry received a gifted rating thanks largely in part to the brand’s social media presence in China.
The retailer, known for its social media presence on Facebook, Twitter and YouTube, translates all of its English content into Chinese and posts it on the appropriate Chinese platforms.
“We believe there is a leapfrogging around traditional media to digital and social mediums in emerging markets,” Mr. Galloway said.
“[Therefore], it might not follow the traditional trajectory of the mature markets,” he said.
Not up to speed
Meanwhile, luxury fashion retail brands dominated the feeble category of the L2 100 Prestige: China study.
For example, Versace, Balenciaga, Givenchy and Miu Miu were among the bottom 10 of the study.
Jewelry and watchmakers including David Yurman, Patek Philippe, De Beers and Chopard were also given feeble ranking.
“With China projected to be the largest luxury market in 2015, the size of the opportunity in China continues to astound,” said R. Danielle Bailey, research lead at L2.
“However, with two-thirds of the brands in the study categorized as feeble or challenged, surprisingly few are capitalizing on it,” she said.
The brands' low-ratings were largely due to a lack of translation on their Web sites and slow load times as well as a real lack in translation services on mobile sites and apps.
Luxury brands are also missing out on a large a sales opportunity by not having a commerce-enabled site for consumers in China, per L2 ThinkTank.
The L2 study also found that 45 percent of Chinese consumers are opening emails on their mobile devices, and yet none of the Prestige 100 brands have sent out mobile-optimized emails.
Overall, L2 suggests that all luxury brands looking to have a strong presence in China and see a high ROI should work on creating platform-agnostic content that is fragmented across social media sites, optimizing all digital offerings for mobile and offer ecommerce in the emerging market.
The wide range of social media platforms in China offers the best way for luxury brands to enter the market, without spending their money on creating optimized Web and mobile sites in Chinese.
“Digital media is directly responsible for introducing luxury brands to the masses in China,” Ms. Bailey said.
“A brand who cannot invest in a Chinese language site should consider growing their brand on social media in the interim,” she said.
“Luxury brands have so many wonderful global assets that can be repurposed on Chinese social platforms, with [social media platform] Sina Weibo being the primary target.”
Final Take
Kayla Hutzler, editorial assistant on Luxury Daily, New York
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