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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?
Sources: L2 Luxury Report 2011
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
Sources: L2 Luxury Report 2011
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
Brands that have localized their content for the Chinese market have been most successful
Lamborghini’s million dollar car on Taobao
Brands that have localized their content for the Chinese market have been most successful
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: L2 Luxury Report 2011
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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Inform netizens without creating crisis
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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