Luxury’s Digital Prowess in China Drives Sales Outside China

on September 22 2011 | in Digital Retail Trends | by | with No Comments

Luxury brands are becoming digitally savvy in China – tapping an array of online opportunities from e-commerce to microblogging platforms.

L2, a think tank for digital innovation, asserts that digital competence is the driver to success in China and the key is for brands to “adopt nimble, platform-agnostic strategies that can be adapted to multiple channels.”

To understand the fast-changing digital landscape in China, Chinese microblogging platform Sina Weibo, which didn’t exist before August 2009, has been adding more than 10 million users per month and has become the online platform of choice for prestige brands — 57 percent of the brands in L2’s recent study has an official presence.

L2 recently released its ranking of the top 100 digital savvy brands in China. The top ten brands include: Audi, Burberry, BMW, Volvo, Benefit Cosmetics, Cadillac, Estee Lauder, Land Rover, Mercedes-Benz, and Porsche.

Brands that have e-commerce abilities score high in the ranking. This makes sense because brands who will adopt e-commerce tend to be early digital innovators and will experiment with emerging online platforms.

A brand’s digital marketing investments in China not only drive sales in Shanghai and Beijing, but also New York, London, and Paris.

What piqued our interest was the missed opportunities by prestige brands to capture the Chinese luxury purchases made outside of China simply by enhancing their site features.

About 56 percent of Chinese luxury purchases are made abroad according to Bain & Co., but just over half of Chinese language sites provide a US and European store locator for Chinese travelers.  Surprisingly, local customization is also limited on many sites with less than a third of websites that publish prices in Renminbi.

Customer engagement tools such as user reviews and social media integration, which are common features in US sites, are only found on eight sites. According to L2, “in most cases, when incorporated, social sharing via Chinese SNS and solicitation of user reviews is relegated to simple interface BBS forums.”

photo credit: burberry, l2

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