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Digital Luxury in China: Case Studies Show It's Not too Late to Start!

  |  June 9, 2011   |  Comments   |  

Luxury brands such as Burberry and Johnnie Walker are using social media marketing to connect with Chinese consumers; here's how.

On May 26, Cartier officially launched its Sina Weibo microblog. Coach, our client, also joined Weibo earlier in the month to coincide with Mother's Day. Before October this year (National Day Golden Week in China), I would venture to bet that the majority of the top 100 luxury brands in China would be (or at least should be) on Weibo.

In fact, while some brands are a little late to online, for many years other luxury brands have understood that digital is a "proxy" for higher income consumers, primarily the auto and beauty categories. Mercedes, BMW, and Cadillac all boast over 200,000 Weibo followers, and Estee Lauder, Clinique, and Clarins all have over 25,000.  This is also revealed in the China Digital IQ Index published last June by L2, a self-described think tank for prestige brands. Of the 17 brands that were classed as "Genius" or "Gifted" by the think tank, nine were auto manufacturers and five were beauty and skincare brands. This is mainly due to the huge rush in the last few years to gain the loyalty of these high-end clients online. Indeed, luxury auto and skincare brands have dominated the home page of China's portals for years now. Only recently have the fashion, spirits, and jewelry brands begun to catch up.

It's not just that the Internet is a proxy for higher income, it is also due to the fact that the average age of Chinese consumers of luxury products is 15 years lower than those of American consumers, according to the World Luxury Association, and the Internet in China, as elsewhere globally, is "skewed" towards a younger demographic.

L2 China Digital IQ Index methodology uses a weighted index to rank brands. The brand's site itself accounts for 40 percent of the scored index, search visibility 25 percent, social media 20 percent, and digital marketing 15 percent. L2 published a global luxury study using similar methodology (only difference is mobile is given a 10 percent weight in the global study). L2 then classifies brands as Genius, Gifted, Average, Challenged, Feeble, and Luddite based on the score.

L2 rated 40 luxury brands in China as 'Feeble', and eight as 'Luddite', stating that 64 percent of the luxury websites didn't even have a store locator and over half do not offer the opportunity to sign up for email. Having said that, when the next edition of the study is published, several brands will make dramatic moves upwards based on recent activities and will show marketers that it's (still) not too late to start.


One notable brand is Burberry. The June 2010 L2 study classified Burberry as 'Challenged' (one class above 'Feeble') because according to L2, the "British digital darling doesn't resonate on Chinese social media sites". To help turn that around, Burberry's Beijing flagship store's launch in April included a concert by Keane simulcast in 50 of its stores. Known as 'Bobo Li' in China, they launched an extensive social media campaign using Jiepang, China's version of Foursquare, that allowed 10 lucky Jiepang participants to attend the concert and live-blogged about it. The campaign also used Sina Weibo and Kaixin to spread the word. As of the end of May, Burberry had over 124,000 followers on Sina Weibo since the launch on the first of February – surpassing 100,000 in less than three months. Clearly Burberry should move up from 'Challenged' in the next edition of the L2 survey.

Burberry event on Jiepang (China's Foursquare) – announced on the Jiepang Sina Weibo page.

Johnnie Walker

Another brand that is sure to move up from its 'Feeble' rank in 2010 is Johnnie Walker. The L2 study ranked the Diageo-owned spirits brand number 73 out of the 100 luxury brands measured. In November, Johnnie Walker launched arguably one of the best integrated campaigns of the year, tying up with Han Han, whose blog has 300 million followers, and director Jia Zhang-Ke, one of China's top documentary directors, and winner of the Venice Film Festival for "Still Life". The campaign, dubbed the "Yulu Documentaries", included Han Han's video blogs as well as 12 short films released in January through March of 2011 that featured real people that have stuck to their beliefs and 'keep on walking' through adversity and hardships. According to Diageo, the campaign generated 20 million video views over eight weeks, and was discussed by 120 bloggers. The L2 study cited Johnnie Walker's "lack of search visibility" when explaining the 'Feeble' rank. Needless to say, my informal 'search visibility' tests on Baidu and Google show that Johnnie Walker's own content (in Chinese and English) now dominates the search engine results pages partially as a result of this campaign.

Johnnie Walker's Yulu Documentaries on Sina Blog

Hopefully these stories can provide inspiration to other brands in the survey that it's (still) not too late to start. The key is to focus on the brand's core concepts, yet to use viral and social means to integrate the story into the conversations that are happening online and over mobile devices, thus allowing brands to connect directly with their target audiences and their fans.

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Michael Zung

Michael Zung currently heads up Bite Communications digital practices in Asia Pacific, serving clients like Skype, Coach, Marriott, and Toys R Us for both their digital marketing and communications needs. Previous to Bite, Mike served as senior vice president in HSBC's Asia Pacific personal banking services, where he launched and headed up HSBC Direct in Taiwan and was responsible for the growth of HSBC Direct in Korea and Taiwan, the first "branchless bank" in both countries. Prior to HSBC, he founded OneXeno, a regional digital marketing consultancy based in Hong Kong that was subsequently acquired by Bite Communications. Mike first came to Asia 10 years ago, working for DoubleClick, where he served in various positions including managing director for North Asia and was also the first editor of AccessAsia, a guide for Asian specialists and current research. He holds an MBA from New York University and an MA from University of Washington.

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