social media and luxury in china

Social Media and Luxury in China��

French Chamber of Commerce and Industry��Hong Kong��

Thomas Crampton ��Asia-Pacific Director, Social@Ogilvy

AGENDA

• The China opportunity

• How to build a digital strategy in China • Understand • Localize • Remain true • Prevent • Learn from Experience

•  Q&A

The China opportunity is clear…

60% of purchases come from first-time customers

45% of luxury consumers in China are 35, or younger

..and growing quickly…

Sources: Bain & Co 2011; CNNIC, 2011

…accounting for a large portion of revenue…

Sources: Company Results

LVMH: +27% growth rate in Asia,

PPR: L’Asie-Pacifique hors Japon (32,0 % du chiffre d’affaires total) a continué d’afficher un rythme de croissance élevé (+ 29,5 %), tiré par une hausse de 39,1 % en Grande Chine.

…but ripe for further growth.

Sources: L2 Luxury Report 2011

Most growth will come from lower-tier cities…

Sources: L2

75% of China’s future wealth creation will take place in smaller cities and towns. Local customers will buy big-ticket items online.

Get there before someone else…

…increasing the importance of engaging with your customers digitally.

What is a good digital strategy for a luxury brand in China?

How to build a luxury digital strategy?


85% of Chinese luxury

consumers engage with brands online

80% use social media to

research luxury purchases

Sources: Global Web Index 2010

Chinese consumers are positively affected by

their online experience with brands

69% purchase or consider purchasing products after looking for brands online

1) Understand

And sometimes sales volume does not reflect on popularity…

To be frank, there are too many LV fakes, which does not make me look good even if I carry a real one.

In China, LV bags are so in bad taste that even cleaning ladies own at

least one.

Between Armani and Zegna, which one is more suitable for an older person?

Need to ask? Zegna, for sure! Zegna, look, Berlusconi always wears it.

What’s the difference between

Armani and Zegna?

The difference is that Armani is a real Italian brand, while Zegna is a

brand created by Wenzhounese and

sold as Italian.

Absence from the social space often brings: Unwanted consequences + Confusion

A listening exercise first step to understand and craft a digital strategy in China

2) Localize

Sources: Social@Ogilvy 2012

Chinese social media are dominated by local players

Sources: CNNIC 2012

China’s top growing social media platform is uniquely chinese

296%

Sina weibo user increase in 2011 to 260m active users


4 out of the 5 top e-Commerce sites are local

0 5

10 15 20 25 30 35 40

Taobao Suning Gome Joyo Amazon

360 Buy

% of users who ever used the following sites for e-shopping

Sources: CIC 2011

Chinese consumers use the web in a totally unique way

87.1% of online content about fashion brands is around “shai” (showing off)

Brands that have localized their content for the Chinese market have been most successful

Smart group buying on Taobao: 305 cars sold in 89 minutes


Lamborghini’s million dollar car on Taobao


Bobby Brown: how to become a beauty guru in China through social media

3) Remain yourself

56% of Chinese luxury

purchases are made abroad, but

only 58% Chinese websites

of international brands have U.S. or European store locator


Sources: China Luxury Forecast 2010

84% of Chinese consumers think country provenance is a decisive factor for purchasing

58% of Chinese consumers are positively influenced by the label “Made in France”

58%

50%

35%

28%

18% 10% 6%

And France is the most appreciated countries by Chinese consumers

Sources: China Luxury Forecast 2010

Localizing does not mean losing your brand essence – it means enhancing it!

In 2011, Hennessy launches Classivm, a cognac specially catered to the Chinese market

With an unemotional digital strategy moving away from Hennessy’s classic look and stress on heritage, Classivm did not break through on the Chinese online space.

0 comments on Classivm’s Renren page after 6 months

JW Vdie

4) Prevent

Don’t underestimate the power of social media public opinion

Carrefour vs McDonald’s ��The importance of having a strong brand on Chinese social media

On March 15 (Chinese Consumer’s Day), CCTV exposed alleged safety scandals about Carrefour and McDonald’s. Both brands responded officially to the accusations on their official website and social media pages within an hour.

But the reaction was very different.

McDonald’s received 7,660 reposts to their official message on Sina Weibo, with most netizens showing support for the brand rather than for CCTV.

Thanks to a strong online communication strategy, McDonald’s brand has become stronger than CCTV’.

With barely 391 reposts, Carrefour’s story got buried beneath negative buzz, and added to the large pool of negative sentiment towards the brand in China.

Carrefour vs McDonald’s ��The importance of having a strong brand on Chinese social media

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New Conversations Page Views

Inform netizens without creating crisis

Real conversations improve crisis response

Both positive and negative feedback is crucial during online crises.

Unlike offline crises, we can monitor the public’s reaction to the crisis management strategy in real time.

This allows us to continuously tweak and improve our strategies to better address the issue and better

protect our clients’ brand.

I am confused: where should I find the official statement?

I think I will still buy one. It’s a good product and they showed good will

during this crisis Conversation samples about Brand X’s online crisis on Chinese forum platforms

Traditional Crises Crises in the Weibo Era

Speed Spreads in hours, days, weeks Spreads in seconds and minutes

Channel Reported by print, broadcast and TV media Crises often erupt on microblogs and amplifies interactively in new and traditional media

Role Traditional media plays a hugely important role in disseminating information, pushing for change and demanding answers

Key Opinion Leaders (KOL) play an important role in pushing for change, while crisis stakeholders (victims, netizens, brands, media) exacerbate the crisis from multiple angles and channels. Ordinary netizens and online influencers who sympathize with the victims help to spread the message further and faster.

Form Monotonous print, photos or TV coverage Vivid and multiple forms such as spoofs, videos, cartoons, and re-enactments

Tone Relatively neutral, objective, unbiased Personal and emotionally charged expressions have become an important driver in the spread of a crisis

Feedback Difficult and slow to collect feedback Rapid fire feedback; an inappropriate response may easily trigger a second crisis, or aftershock

39

Key Crisis Characteristics in the Microblog Era��

40

UNDERSTAND YOUR BUSINESS

UNDERSTAND YOUR

CUSTOMERS

UNDERSTAND THE ROLE OF

DIGITAL

BUILD AN STRATEGY

ACTIONABLE

+ +

Listen Plan Execute & Optimise

Knowing LOCAL, Understanding GLOBAL

5) Learn from experience

The Simple 3-Step Program

Step 1: Look at search volumes and conversations about your brand. If either is significant, you need a localized approach.

Step 2: Think strategically about digital marketing. Use data and insights about your customers from your website and online

conversations

Step 3: Begin participation.

Think holistically an integrated approach works better.

Beyond e-commerce an integrated digital strategy helps

1.  Capitalize on fast-growing markets

2.  Monetize existing demand

3.  Complement the store presence

4.  Open new markets

Who we are

We are the largest digital agency in Asia

19 countries 26 offices

3 000 digital experts

Wommy (GLOBAL) •  2011: Momentum Awards – Bronze

Digital PR Awards (2011) •  Best Online Community – Won •  Best Digital Marketing Campaign – Honorable Mention •  Best Social Network Campaign – Honorable Mention

Sabre Awards •  2011: Global Digital/Social Consultancy of the Year

Marketing Magazine •  2011: Best Use of Media – Integrated

The Holmes Report •  2011: APAC Digital Consultancy of the Year

Asia Pacific PR Awards •  2010: Best Use of Digital x 3 •  2009: Best Use of Digital

Asia Marketing Effectiveness Awards •  2010: Most Effective Public Relations

Digital Media Awards (APAC) •  2011: Best Use of Social Media – Bronze

Click Awards •  2010: Integrated Marketing

WPPed Cream Awards •  2010: Best Consumer Marketing

ITSMA Marketing Excellence Awards •  2010: Most Effective Public Relations (Diamond)

IBM Global Best Practice Awards •  2011: Excellence in Creativity and Execution in Social Media,

Innovate India 2011 •  2010: Best CFO Case Study (Silver) •  2010: Best Impact in Regional Activity Using Social Media

(Bronze) •  2010: Values Award

Atticus Awards •  2010 Best Digital Influence Essay

Ogilvy Social Media Awards in Asia-Pacific Aiming to beat our own record as the region’s most awarded social media team

Grazie!

Thomas Crampton APAC Director | Social Media | Hong Kong EMAIL [email protected]

BLOG http://thomascrampton.com

CONTACT

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