11 JAN. 2013

Digital in China: Luxury Edition

2013 promises to be a turning point in the evolution of China’s luxury market. The rise of lower tier cities, the explosion of luxury e-commerce, the de-coupling of customer expectations between new consumers and traditional buyers and many other trends will make luxury a hot market to observe in the year to come.

2013 will also be a year in which luxury brands turn to new digital tools to face market challenges and use online channels in new, increasingly creative ways. We thus choose to kick off the year with a special edition of “This week in digital” focused on luxury brands.

Cartier wins new followers with new web video and live chat with star actress

With Christmas right behind us, brands are already looking forwards and preparing both Valentines’ Day and the ensuing spring period that is always seen as an auspicious time for lovers to tie the knot (especially this year since 2013 in Chinese is pronounced roughly like “I will love you for a lifetime”).

Cartier kicked things off this week with the release of the latest episode in a series of web videos. The 5-minute long micro movie called “Destiny” stars British actor Oliver Jackson-Cohen and Taiwanese star Michelle Chen (陈妍希) in the roles of Olivier and Claire, two broken-up lovers meeting again at friends’ wedding in a magnificent Parisian garden right by the Eifel Tower. Seeing his old lover stirs up emotions in Olivier who resolves to propose to Claire (in her native language) but is sure to first rush to the closest Cartier store to buy the latest Cartier “Destinee” engagement ring.

The movie was widely commented on social media and promoted through its dedicated space on Cartier’s Weibo page. On this special page, Weibo users can watch the movie, the making off, discover the product and get exclusive pictures starring the two actors. In addition, Cartier organized an online Q&A session with Michelle Chen that saw her answer dozens of fan questions.

With this operation, Cartier uses web videos to localize its message (the topic of love overcoming cultural gaps is central to the movie’s plot), promote rich content with true artistic value and maximizes exposure through smart use of social media and Weibo’s rich features. As a result, it gained nearly 30.000 Weibo followers in a few hours.

Mont Blanc reaches out to lovers ahead of Valentines’ day

Amongst the other brands preparing Valentines’ Day with special targeted campaigns, fine pen and jewelry maker Mont Blanc stands out with its “Lovers’ bridge” Weibo campaign launched this week.

The tradition of couples affixing a padlock to landmark locations and then throwing the key away to symbolize their eternal love originated in China and is ubiquitous throughout Asia. With this new Weibo application, Mont Blanc brings this concept online and ties its name to the ideas of romanticism and eternal love.

Through Mont Blanc’s Weibo page, fans can write their own customized love message and place it inside a virtual padlock that is then sent to their lover’s email address. Upon receiving the Email, the lucky loved one is re-directed towards Mont Blanc’s Weibo page to unlock the message. On February 28th, three participants will win a limited edition Mont Blanc love necklace.

With this simple application, Mont Blanc intelligently exploits a concept that translated very well online (that of love padlocks) and gets conversations going ahead of what is expected to be a period of intense activity for luxury brands all over the country.

Coach brings the spirit of New York to its Chinese fans

A key part of luxury brand’s identity in China is rooted in their origins. For most brands, this means putting forth their European heritage but how can American brand Coach play the heritage card in a credible and engaging manner?

During the Christmas and New Year period, Coach rolled out an ambitious cross-platform campaign called New York Style (纽约范围) that aimed at promoting the city of New York, a key element of Coach’s brand identity.

The core of the campaign was a Weibo application on which fans of the brand could discover New York’s 6 iconic districts (Meatpacking district, 5th avenue, Brooklyn, Soho, The upper-east side and Time Square) through special articles on the Sina Style portal. The brand also tapped influential Weibo bloggers to create looks associated to each district; netizens could then vote for their favorite look and invite their friends to do the same.

At the same time, Coach promoted pushed content related to the campaign through its official Weixin account and even leveraged the photo-sharing app Tuding (which we spotted early this year as having great potential for brands) by launching a special “New York Style” filter. 

This campaign is a perfect example of smart cross-platform digital marketing used to strengthen a key element of the brand image. Furthermore, with close to half of luxury related spending estimated to happen abroad, this operation is a smart way for Coach of promoting its signature destination and securing a high share of the spending of New York bound tourists.

L2 ranks the digital presence of luxury brands in China: key takeaways

Every year, L2 (a think tank about the luxury industry) publishes its “China digital IQ” report that ranks the web presence of luxury brands in China. The report covers brands from all industries (fashion, watches and jewelry, beauty, hospitality and automobile) and takes a comprehensive view of brands’ web presence (mobile, social media, digital campaigns, website etc…) to compile its final ranking. Its 2011 report showed that most brands were severely lagging when it came to digital marketing with 66% of brands surveyed classified as “feeble” or “challenged”.

At the top of the ranking we find digital pioneers such as Estee Lauder, Audi and Lancome but also newcomers such as Chow Tai Fook and Clarins. Dominant categories are still cosmetics and automobile with all but 2 of the top 10 brands belonging to one of these categories (which is consistent with our findings, see our article on digital and cosmetic brands).

Amongst the report’s key findings, the rise of e-commerce is without a doubt the most important with respectively 41%, 89% and 100% of fashion beauty and hospitality brands having some kind of e-commerce activity whether 100% brand owned or through 3rd party companies (such as Ferragamo with or Dolce & Gabanna leveraging Yoox’s platform).

On the website front, even though load times are still way longer than in the west due to poor optimization to local internet speeds and web browsers (the average luxury websites takes about 16 seconds to load in China), progress should be noted in the integration of social media APIs, the integration of live-chat tools and the presence of user review features.

With regard to social media, a Sina Weibo presence is now clearly indispensable for any credible luxury brand with 88% of brands surveyed being active on this platform vs. 64% last year. Other fast growing platforms are Youku (60% of brands active in 2012 vs. 27% in 2011) and Douban (21% of brands active in 2012 vs only 8% in 2011). While this year’s study did not integrate WeChat, we fully expect a least a third of the brands in the panel to have embraced this new channel by the end of this year. Most importantly, we believe that Sina Weibo will remain key to the web presence of any luxury brand but will feel the competition of other networks that provide access to different target segments and allow for different type of interactions with customers.

While mobile is playing an increasingly important role in luxury customers’ purchasing journeys, most brands are still lagging on this dimension with only 23% of the brands in the panel having a mobile optimized version of their Chinese website and only a third of those websites being e-commerce enabled. We see there the enduring challenges posed by low mobile internet speeds and device fragmentation. However as these challenges look set to subside in 2013, brands have no more excuses not to step up their mobile presence.

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