prestige china 2011

8/2/2019 Prestige China 2011

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China IQ L2 2011 L2ThinkTank.com

SCOTT GALLOWAY NYU Stern

September 13, 2011

DOUG GUTHRIEThe George Washington University School of Business


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The Social Graph:ChinaCLINIC

L2s inaugural event in China will probe the underpinnings, platforms,and best practices of social media in China.

Year upon year of double-digit economic growth and urbanization has armed tens ofmillions of Chinese consumers with increasing disposable income and a voraciousappetite for luxury goods. In 2009, China surpassed the United States as the worldssecond-largest luxury market, trailing only Japan. However, while several prestigebrands have been operating in China for almost 20 years, most are still trying todetermine how to best tap this enormous but complex opportunity.

The social media landscape in China is dramatically differentfrom other markets.Industry leaders like Facebook, Google, YouTube, and Twitter are non-factors in themarket, requiring even the most digitally adept brands to fundamentally adapt their socialmedia strategies to local platforms like Baidu, Youku, Sina Weibo, and RenRen.

The L2 China Clinic will provide a framework for thinking about the overall opportunityin China for prestige brands. Speakers will explore the key digital players and strategies

that lead to success, as well as ndings from the 2011 L2 Prestige 100

: China IQ .

HOSTED BY:

CORPORATE PARTNERS:

MEDIA PARTNERS:

Friday, October 14CEIBS, Shanghai

China Europe International Business School

Pre-event reception:

Thursday, October 13Four Seasons Shanghai

For an invitation & more information, contact:

[email protected]
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L2 2011 L2ThinkTank.com 3

Want to know more about your brands China IQ?CONTACT US

Over the next 15 years, the global addressable marketfor luxury goods is expected to grow by 600 millionconsumers, provoking growth forecasts of 2.2 times GDP. 1 Much

of this growth is projected to come from one market: China. In

2000, the Chinese market accounted for a fraction of luxury sales

globally, however torrid growth means in 2015, China will likely

overtake Japan as the worlds largest luxury market.

Forget What You Know

The algorithm for success in China is different: Less about a 50-something millionaire, more about a 30-some-

thing, upper middle class consumer

Less about retail in Tier I cities, more about new modes of distri-

bution in Tier ll and lll cities

Less about print, more about mobile and emerging platforms

Less about expert editorial, more about peer reviews, as

60 percent of consumers indicate that the Internet is one of the

primary sources for information on luxury goods (up from 30

percent in 2008) 2

Tomorrow Belongs to MeMcKinsey reports that 73 percent of Chinese luxury consumers are

under the age of 45, and upwards of 45 percent are under the ageof 35, suggesting that the majority of prestige purchasers are digitally

native. 3 In the U.S., the average female prestige consumer registers

household income of $150,000 and spends $3,000 annually on

handbags. In contrast, the average female prestige consumer in

China makes $18,300 (125 RMB) and spends $2,000 annually on

handbags. 4 Often these purchases occur after two to three months

of research and consideration, most of it done online.

The fastest growing luxury channel(s) in China:

Paris and New YorkIncreasing wariness of counterfeit merchandise, coupled with

signi cantly lower prices abroad, has led to 56 percent of Chinese

luxury purchases occurring outside of China, suggesting that a

brands digital marketing investments on the mainland drive sales

in Shanghai and Beijing... and New York, Paris, and Hong Kong. 5

Digital Is DifferentNot a single global Internet leader is number one in China. The pro-

liferation of SNS platforms, BBS sites, and other digital channels

present a challenge to marketers. The environment favors brands

China: The greatest opportunity or prestige brands

in a generation

1. McKinsey & Com-pany, Understanding

Chinas Love forLuxury, March 2011.

2. Ibid.

3. Ibid.

4. Pao Principle, 2010.

5. Bain & Company,Chinas Luxury Market

Study 2010,November 2010.
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0

200

400

600

2010 2015

800

740

450TOTAL:

447TOTAL:

401 43

39 50

44

97

94

257224

I n t e r n e t

U s e r s

( i n

M i l l i o n s

)

that adopt nimble, platform-agnostic digital strategies that can be

adapted to multiple channels. A testament to the pace of change,

Chinese microblogging platform Sina Weibo was not analyzed in

our May 2010 study. Launched in August 2009, the platform has

added more than 10 million users per month and recently topped

200 million registered accounts. Sina Weibo has become the

platform of choice for prestige brands57 percent of the brands

in the study now maintain an of cial presence.

China IQ = GrowthOur thesis is that success in the worlds fastest-growing prestige

market is inextricably linked to digital competence. This study

attempts to quantify the digital competence in China of 100 iconic

brands (The Prestige 100 ). The majority, 91, compete globally,

while nine are of Chinese/Hong Kong origin. Our aim is to provide

a robust tool to diagnose digital strengths and weaknesses and

help managers achieve greater return on incremental investment.

Like the medium we are assessing, our methodology is dynamic,

and we hope you will reach out to us with comments that improveour approach, investigation, and ndings. You can reach us at

[email protected] and [email protected] .

Sincerely,

SCOTT GALLOWAY

Founder, L2

Clinical Professor of Marketing,NYU Stern

DOUG GUTHRIE

Dean,The George Washington

University School of Business

Internet Tidal WaveINTERNET USERS IN THE WORLDS LARGEST LUXURY MARKETS

2010 vs. 2015

(in Millions)

= CHINA= U.S.

= JAPAN= U.K.

= FRANCE

Source: eMarketer, April 2011.
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0

300

600

900

1,200

1,500

1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5

P o p u

l a t i o n

( i n

M i l l i o n s

)

Addressable Market for Luxury BrandsPOPULATION WITH INCOME > $30,000 USD

(1995-2025 Estimates, in Millions)

= REST OF THE WORLD

= CHINA

= JAPAN= EUROPE

= U.S.

Source: Goldman Sachs, March 2011.

+300 million(1995-2010)

+600 million(2010-2025)
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MethodologySITE: Effectiveness of brand site.

FUNCTIONALITY & CONTENT:70% Site Technology: Load Time,

Hosting Location

Site Navigation & Search Product & Promotions E-Commerce

SOCIAL MEDIA: Brand presence, community size, content, & engagement on major Chinese social media platforms.

MICROBLOGGING: Sina Weibo: Presence, Programs,

Community Size, Interaction Rate

Tencent Weibo: Presence,Programs, Community Size,Interaction Rate

DIGITAL MARKETING: Marketing efforts, off-site brand presence, and visibility on search engines. Search: China Site Traf c, Web Authority, SEO and SEM on Baidu and Google Advertising & Innovation:Recent Brand Initiatives, BBS, Taobao and Jiepang Activity Brand Buzz:Mentions and Video Uploads on Chinese Social Platforms Email:Frequency, Language, Content, Chinese Social Media Integration, Promotions

MOBILE: Compatibility and marketing on smartphones and other mobile devices.

Mobile Site:Compatibility, Functionality, Transaction Capability iOS Applications (iPhone & iPad):Availability, Popularity, Functionality Android & Ovi Applications:Availability, Popularity, Functionality

40%

15%

30%

15%

China Digital IQ Classes

IQ Range IQ Class

140+ GENIUSDigital competence is a pointof differentiation. Site content isinnovative and optimized for theChinese consumer. Chinese socialmedia efforts complement broaderdigital strategy. Brand experienceseamlessly extends across mobileplatforms.

110-139 GIFTEDBrands are experimenting andinnovating across site, mobile, andsocial platforms. Digital presenceis consistent with brand image andlarger marketing efforts.

90-109 AVERAGEDigital presence is functional yet

predictable. Efforts are often siloedacross platforms.

70-89 CHALLENGEDLimited or inconsistent adoption ofmobile and social media platforms.Site lacks inspiration, does nottranslate to the Chinese consumer.

< 70 FEEBLEInvestment does not matchopportunity.

ONLINE VIDEO: Youku:Views, Number of

Uploads, Subscriber Growth,Viral Videos

Tudou: Views, Number ofUploads, Subscriber Growth,Viral Videos

BRAND TRANSLATION:30% Site Aesthetics Messaging & Imagery Chinese Relevance &

Translation

SNS: Renren: Presence, Programs,

Community Size, Interaction Rate

Kaixin:Presence, Programs,Community Size, Interaction Rate

Douban: Presence, Programs,Community Size

Chinese Social MediaIntegration

Customer Service Account Services Content Localization


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8/50 L2 2011 L2ThinkTank.com 8


BrandRanking

Watches& JewelryAutomobi les Champagne& Spirits FashionBeauty

Rank Brand Category China IQ Class Description

13 SWAROVSKI Watches & Jewelry 108 Average Dedicated channel on PPTV sparkles with live event feeds

15 CARTIER Watches & Jewelry 107 Average Love microsite is shareable across Kaixin, Douban, and Sina Weibo

15 GUCCI Fashion 107 Average Gucci Style iPhone app transcends language barrier

15 LANCME Beauty 107 Average Rose Beauty continues to score points, but Sina Weibo hasnt been updated since October 2010

18 LOUIS VUITTON Fashion 104 Average Voyages microsite and Jiepang tie-in promote exhibit at National Museum of China

19 CHANEL Fashion 103 Average Chinese iPhone app provides access to Chanel News content and fashion videos

20 KIEHLS Beauty 102 Average Dedicated Sina blog pro les local in uencers

21 CHRISTIAN DIOR Fashion 101 Average Lady Blue Shanghai lm disappoints with only 146 views on of cial Tudou page

22 CLINIQUE Beauty 100 Average More than 145,000 users participated in Renren Knock Out the Old Me campaign in early 2011

22 DOLCE & GABBANA Fashion 100 Average Live-streamed summer mens fashion show exclusively through iOS and Android platforms

24 SK-II Beauty 98 Average More that 180,000 user wishes have been submitted through t he Start Early micrositefor a chance to win gifts and samples

25 OMEGA Watches & Jewelry 96 Average Resting on the laurels of China legacy; dedicated Youku page and well-con gured watch nderarent enough to keep time

26 MAC Beauty 95 Average Dynamic product recommendation engine transcends borders


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BrandRanking



27 HENNESSY Champagne & Spirits 94 Average China-only Hxindian microsite hosts online contests, product videos and a members-only zone

28 JOHNNIE WALKER Champagne & Spirits91 Average Yulu campaign features 12 mini lms highlighting local personalities

28 LEXUS Automobiles 91 Average Generic site fails in pursuit of perfection

30 COACH Fashion 90 Average Mobile optimized site features the mens collection

30 DIANEVON FURSTENBERG Fashion 90 Average Dianes personal Sina Weibo account gets a boost from media mogul Hong Huang

30 LONGINES Watches & Jewelry 90 Average China-speci c iPhone app cross-promoted on site

33 ACURA Automobiles 89 Challenged Creative promotions on Sina Weibo drive to the dealership

33 CHOW TAI FOOK Watches & Jewelry 89 Challenged Hong Kong jeweler showcases dedicated Taobao shop

33 JAGUAR Automobiles 89 Challenged Live-streamed a press conference announcing its new models, but needs to push t he acceleratoron its digital efforts

36 GUERLAIN Beauty 88 Challenged 1,570 participants on the Rouge Aomatique microsite indicates the brand is puckering up t o theChinese market

37 HUBLOT Watches & Jewelry 87 Challenged Teaming with Formula 1 racer/blogger Han Han to create limited edition watch and accompanyingSina Weibo page

38 CLARINS Beauty 86 Challenged Looking for V-Girl Contest in search of perfect face shape received more than 7,000 entrants

39 YUE-SAI Beauty 83 ChallengedDedicated Youku page for eight episode miniseries directed by Gil Wadsworth received more than1.5 million views


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BrandRanking



40 CHLO Fashion 82 Challenged Chlos short-lived Chinese-language blog live-streamed runway shows and garnered more than40,000 visitors

40 SHISEIDO Beauty 82 Challenged Almost 9,000 votes were cast in the search to nd the best beauty expert on the brands 13,660member BBS

42 MASERATI Automobiles 80 Challenged Strong con gurator, but available only in English

42 ROLEX Watches & Jewelry 80 Challenged Must spend time on more than a mobile-optimized China site and a Youku channel if it wantsto raise its pro le

42 SHANGHAI TANG Fashion 80 Challenged E-commerce enabled iPhone app features city guides and t axi cards for Western visitors,but brand is lost on Baidu to Chinese consumers

45 JAEGER-LECOULTRE Watches & Jewelry 79 Challenged Translated microsite allows Chinese consumers to celebrate the 80th anniversary of the Reversocollection

45 RAYMOND WEIL Watches & Jewelry 79 Challenged Global video contest boasts dedicated pages on Douban and eYeka

45 TIFFANY & CO. Watches & Jewelry 79 Challenged Single post on Sina Weibo account suggests What Makes Love True site will be launched

in September

48 BULGARI Watches & Jewelry 78 Challenged Exhibition at National Museum of China has no digital footprint

48 IWCSCHAFFHAUSEN Watches & Jewelry 78 Challenged Interactive IWC forum is mobile-optimized but available only in English

50 IDO Watches & Jewelry 77 Challenged Sina Weibo following more than 400,000 strong; decicated Sina Weibo account providescustomer service

51 CALVIN KLEIN Fashion 76 Challenged CK One virtual box extends life of event

51 LOCCITANE Beauty76

Challenged One of three in Index with e-commerce enabled mobile app


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BrandRanking



53 AUDEMARS PIGUET Watches & Jewelry 75 Challenged Royal Oak Offshore collection microsite is buttressed by Chinese translation

54 RMY MARTIN Champagne & Spirits 74 Challenged Real Man video contest via Youku encourages user-generated video from macho entrants

55 PANDORA Watches & Jewelry 73 Challenged Limited Chinese site content leaves a lot still trapped in the box

56 LANEIGE Beauty 72 Challenged Caf Laneige online community enhances interactivity

56 LUK FOOK Watches & Jewelry 72 Challenged Faulty store locator is limited to Hong Kong site, but only brand to support Taobao plug-inon homepage

56 PIAGET Watches & Jewelry 72 Challenged Of cial Sina blog has registered only 5,000 visits

59 ARMANI Fashion 71 Challenged E-commerce pioneer with Emporio Armani launch, but fails to innovate elsewhere

59 BOTTEGA VENETA Fashion 71 Challenged Site is slow to load and lean on Chinese customization

59 FENDI Fashion 71 Challenged Placing in-video ads through Youku, but not placing enough attention on its overall strategy

62 LAMBORGHINI Automobiles 70 Challenged Brand-approved Taobao shop showcases eight different models but has yet to post a sale

62 ROLLS-ROYCE Automobiles 70 Challenged Its hard to contact us when info is only for North America

64 HUGO BOSS Fashion 66 Feeble Online footprint pales in comparison to monstrous brick-and-mortar presence

64 MONTBLANC Watches & Jewelry66

Feeble Huge SNS buzz, but not much else


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BrandRanking



64 TAG HEUER Watches & Jewelry 66 Feeble Tick tockpatience runs out waiting for site to load

64 VERSACE Fashion 66 Feeble Versace Home is e-commerce enabled; Versace Fashion, not so much

68 ALFRED DUNHILL Fashion 65 Feeble Day 8 blog available in Chinese, but only shareable via Facebook and Twitter

68 BALENCIAGA Fashion 65 Feeble July site launch fails to incorporate Chinese language version

70 BOBBI BROWN Beauty 64 Feeble Users can tune into tips from experts on Sina Weibo, but site doesnt support e-commerce

71 CHOPARD Watches & Jewelry 63 Feeble Chopard Diary boasts strong content; too bad it isnt in Chinese

71 GIVENCHY Fashion 63 Feeble Sina Weibo alone is not going to move the needle

73 MIU MIU Fashion 62 Feeble Falling into fashion with global site redesign; noticeably absent from SNS

73 PORTS 1961 Fashion 62 Feeble First mover is one of few in Fashion to sell online

75 BALLANTINES Champagne & Spiri ts 61 Feeble Chinese golf fans can follow the action at the Ballantines Championship via online and mobile

75 WULIANGYE Champagne & Spirits 61 Feeble More than 9,000 members on site BBS

77 DE BEERS Watches & Jewelry 60 Feeble April site relaunch included simpli ed Chinese translation

77 FERRAGAMO Fashion60

Feeble Not much other than a Sina Weibo account with 30,000 fans and not a single post


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BrandRanking



77 HERMS Fashion 60 Feeble Of ine innovation doesnt translate online

80 MOUTAI (MAOTAI) Champagne & Spirits58 Feeble Eagerly awaiting impending BBS launch and reactivation of online e-commerce

80 PRADA Fashion 58 Feeble Luxurys digital laggard; Sino efforts aren't any different

82 VALENTINO Fashion 56 Feeble Global e-commerce site ships to China, but consumers must be comfortable shopping in English

83 ASTON MARTIN Automobiles 55 Feeble One of two brands with mobile app for Nokias Ovi platform

83 CHIVAS REGAL Champagne & Spiri ts 55 Feeble Supporting site info for Craft of Chivalry concert tour is rst step

83 ERMENEGILDO ZEGNA Fashion 55 Feeble Mens runway at fashion week featured projections of Chinese landscapes; but with limitedvisibility on Baidu, did content even reach Chinese consumers?

86 MARC JACOBS Fashion 54 Feeble Should read Louis Vuittons manual on courting China

87 MOVADO Watches & Jewelry 52 Feeble Company website has good localized Chinese content but limited interactivity beyondash navigation

87 RALPH LAUREN Fashion 52 Feeble U.S. digital uency has yet to translate

87 VAN CLEEF & ARPELS Watches & Jewelry 52 Feeble Lacks SNS presence and Chinese-speci c content on its translated site

90 PATEK PHILIPPE Watches & Jewelry 51 Feeble Strong brand equity; weak digital presence

91 HARRY WINSTON Watches & Jewelry50

Feeble Rich site heritage content is tempered by poor load times


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BrandRanking



91 MOT & CHANDON Champagne & Spirits50 Feeble Recent Mr. & Miss Mot Sina Weibo contest suggests IQ is about to pop

93 VACHERON CONSTANTIN Watches & Jewelry49 Feeble English-only watch con gurator and absent concierge need resetting

94 BELVEDERE VODKA Champagne & Spirits46 Feeble Facebook focus doesnt help in the East

95 MACALLAN Champagne & Spirits 44 Feeble Interactive elements not translatedblogs, artistry, and photo contest in English only

96 YVES SAINT LAURENT Fashion 43 Feeble Despite the iconic brands worst efforts, it still manages to gain some buzz on Chinese social media

97 DAVID YURMAN Watches & Jewelry 42 Feeble Compared to the global site, the Chinese site has no luster

98 BACCARAT Watches & Jewelry 41 Feeble Struggling to shine online

99 DOM PRIGNON Champagne & Spiri ts 26 Feeble China is in love with the brand; its digital presence not so much

100 VEUVE CLICQUOT Champagne & Spirits24 Feeble Flat


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K E Y F I N D I N G S

In the Company of GeniusTwo of 2010s ve Genius brands, Audi and

BMW, retained their status, the other three,

Lancme, Este Lauder, and Clinique,

remained solidly in the top quartile, buttress-

ing the notion that constant innovation and

investment are requisites for digital success in

this dynamic market. New to the Genius and

Gifted ranks, Burberry and Bene t Cosmet-

ics, were among 2011s biggest winners, both

launching e-commerce in the past 12 months

and making signi cant investments in Chinese

social platforms.

More than two-thirds of the Prestige 100

posted a Challenged or Feeble IQ, suggesting

digital efforts in China remain nascent across

the industry. The biggest differentiator between

Genius and Gifted brands occurred acrossthe Site dimension. Brands that score well

have developed transaction-oriented sites with

superior customer service, Chinese-speci c

technology integration, tailored content, and

consistent translation.

KeyFindings

China IQ Distribution% OF BRANDS PER CHINA DIGITAL IQ CLASS:

CHINA IQ

140

AudiBurberryBMW

CHINA IQ

110-139

VolvoBene t Cosmetics

CadillacEste Lauder

Land RoverMercedes-Benz

PorscheFerrariIn niti

GIFTED

CHINA IQ

70-89

AcuraChow Tai Fook

JaguarGuerlain

HublotClarins

Yue-SaiChlo

Shiseido

MaseratiRolex

Shanghai TangJaeger-

LeCoultreRaymond Weil

Tiffany & Co.Bulgari

IWCScaffhausen

IDoCalvin Klein

LOccitaneAudemars

PiguetRmy Martin

PandoraLaneige

Luk FookPiaget

ArmaniBottega Veneta

FendiLamborghiniRolls-Royce

Hugo BossMontblancTAG HeuerVersaceAlfred DunhillBalenciaga

Bobbi BrownChopardGivenchyMiu MiuPorts 1961BallantinesWuliangyeDe BeersFerragamoHermsMoutai (Maotai)PradaValentinoAston MartinChivas Regal

ErmenegildoZegnaMarc JacobsMovadoRalph LaurenVan Cleef &ArpelsPatek PhilippeHarry WinstonMot &ChandonVacheronConstantinBelvedere VodkaMacallan Yves SaintLaurentDavid YurmanBaccaratDom Prignon

Veuve Clicquot

AVERAGE

CHALLENGED

FEEBLE

GENIUS

9%

3%

31%

20%

37%


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Top 20Brands Rank Brand IQ Class IQ Score

#1 Audi Genius 170

#2 Burberry Genius 157

#3 BMW Genius 155

#4 Volvo Gifted 133

#5 Bene t Cosmetics Gifted 127

#6 Cadillac Gifted 124#6 Este Lauder Gifted 124

#8 Land Rover Gifted 122

#8 Mercedes Benz Gifted 122

#10 Porsche Gifted 112

#11 Ferrari Gifted 111

#12 In niti Gifted 110

#13 Herborist Average 108

#13 Swarovski Average 108

#15 Cartier Average 107

#15 Gucci Average 107

#15 Lancme Average 107

#18 Louis Vuitton Average 104

#19 Chanel Average 103

#20 Kiehls Average 102

Rank Brand IQ Class IQ Score

#1 Lancme Genius 167

#2 BMW Genius 157

#2 Este Lauder Genius 157

#4 Audi Genius 150

#5 Clinique Genius 146

#6 Mercedes Benz Gifted 138#7 Clarins Gifted 137

#8 Acura Gifted 130

#9 Cadillac Gifted 124

#10 Wullangye Gifted 121

#11 Lexus Gifted 119

#12 In niti Gifted 118

#12 Land Rover Gifted 118

#14 Moutai (Maotai) Gifted 115

#15 Cartier Gifted 114

#16 Porsche Gifted 113

#17 Herborist Gifted 112

#18 Christian Dior Average 109

#19 Louis Vuitton Average 108

#19 Tiffany Average 108

#19 Luk Fook Average 108

TIE

TIE

China Digital IQScores

TIE

TIE

2010 2011

Watches& Jewelry

Automobiles

Champagne& Spirits

Fashion

Beauty

KEY

= BRANDS THAT RANKED INTHE SAME IQ CLASS IN2010 & 2011

= BRANDS THAT RANKEDIN THE TOP 20 IN BOTH2010 & 2011 BUTCHANGED IQ CLASSES

TIE

TIE

TIE


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KeyFindings

GENIUS BRANDS:Audi

Renren:Users compete for a chance to winprofessional racecar training at

Shanghais Formula 1 race track.

Sina Weibo: A branded Sina event page,linking to the of cial Weiboaccount, features the interactive

Audi Driving Experience game.The winner receives a PS3 oriPad 2. Fans on the brand SinaWeibo page grew 70 percent toalmost 61,000, from July 1 to

August 1.

The Audi Driving Experiencehashtag # # hasgenerated 147,850 posts on

Sina Weibo. Audi also maintainsseparate Weibo pages for manyof its models.


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KeyFindings

GENIUS BRANDS:Audi

Kaixin:181,450 followers.

Youku:275,590 video views.

Tencent Weibo:Presence onTencent Weibo isin its infancy.

Mobile:Multiple Chinese-language mobileapps providevirtual tours of the Audi A8L andcomplement amobile optimizedbrand site.


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Digital Innovation at Brick and Mortar Stores:Burberrys Chinese stores are out tted with the latest in digitaltechnology, including full-length touch screens and iPads.

KeyFindings

GENIUS BRANDS:Burberry

Site:Chinese-language,e-commerce enabledsite mirrors the brandsglobal experience,including Chinesesubtitled versions of the Burberry Acousticvideo series.

Mobile:E-commerceenabled Chinese-language mobilesite translates.


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KeyFindings


Live Stream: An all-digital, holographic fashionshow was streamed on brand site,marking the grand opening of the

agship Beijing store.

Youku:Milan Fashion Show live stream on

Youku garnered Burberry almost1.2 million views on its channel.


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KeyFindings


Kaixin:61,920 followers.

Douban:20,780 members enjoy

Acoustic series videos,product photo galleries,and a music channel onDouban.fm.

Sina Weibo:182,250 Sina Weibofans are treatedto product videosand pics, magazinecovers, and celebritysightings.


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GENIUS BRANDS:BMW

KeyFindings

Mobile Site:Provides BMW modeloverviews and pricing,but fails to take advan-tage of mobile features.

iPhone App:Exclusive iPhone app for ChineseBMW owners, MyBMWClubincludes click-to-call customerservice, a dealer locator, andof ine meet-ups and events.

Sina Weibo:240,300 fans on SinaWeibo experiencethe Joy of BMW.


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KeyFindings

GENIUS BRANDS:BMW Youku:There are 31,800 unof cial BMWvideos on Youku, the most of anybrand and testament to brandstrength.

Kaixin:

622,640 followers.

Tencent Weibo:BMW has the largestbrand following on TencentWeibo, with more than173,000 fans.

Jiepang:Fans checked in on Jiepang tothe Birds Nest National Stadiumin Beijing for a virtual badge anda chance to win tickets to theBMW 3 Series fashion concert.



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KeyFindings

Top Five Biggest Winners & Losers

2010 VS. 2011 IQ PERCENTILE RANK

FEEBLE

FEEBLEGIFTED

GIFTED

Flash and media-heavy site has had few technologyor functionality updates.

Van Cleef & Arpels

Hour Lounge BBS available in Chinese receivesminimal updates.

Vacheron Constantin

Audemars PiguetFEEBLE CHALLENGED

Launch of Chinese site launches brand from Feeble to Challenged.

BurberryCHALLENGED GENIUS

One of rst in Fashion to launch e-commerce.Has extended social media prowess to Chineseplatforms.

Johnnie WalkerFEEBLE AVERAGE

Launched presence on Sina Weibo and Douban; Yulu campaign featuring Jia Zhangke documen- taries is shareable across social media.

AVERAGE

Dolce & GabbanaFEEBLE

Fighting on every front; has launched a presence onnine social media sites globally including three inChina. Developed mobile app for Ovi platform.

GIFTED

Bene tFEEBLE

Top-notch e-commerce and program launches on Youku, Tudou, Kaixin, and Sina Weibo propel thisLVMH brand to the top of the Beauty rankings.

With the exception of Douban page,few updates since 2010.

Chivas RegalFEEBLEAVERAGE

Moutai (Maotai)

E-commerce functionality alone isnt enough to keep this iconic liquor brand in the Gifted ranks.

FEEBLE FEEBLE

Localized site and high participation BBS forum arentenough to hold their ground.

Wuliangye

FEEBLE

+67%-41%

+48% -43%

+44%-56%

+40%-67%

+37%-68%

CHALLENGED



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KeyFindings Brand Site Sophistication% OF SITES WITH THE FOLLOWING ATTRIBUTES:

(2010 vs. 2011)


Selling Is KnowingThe biggest change in site investments year

on year are tied directly to sales. The number

of brands that were e-commerce enabled

doubled, and one- fth now sell online. In

addition, 23 brands have added of ine retail

locators. E-commerce continues to be directly

correlated with strong digital performance

across dimensions, and brands selling onlineregistered average IQs 16 points higher than

those without online sales, suggesting that as

an organization begins generating revenue

online, additional resources are allocated to

digital marketing.

The Beauty category leads the way with 11 of

the 15 brands in the study boasting e-commerce

capability. The Fashion category posted the

largest year on year change as the percentageof brands selling went from just seven percent

to 24 percent. Some Fashion brands, such as

Valentino and Diane von Furstenberg, that do

not host a Chinese site sell and ship to China

via their global site.

(continued on next page)

0%

F e a t u r e

A d o p t i o n

( % )

Locate RetailWithin China

Site Hostedin China

ChineseLanguage

E-CommerceEnabled

= 2011= 2010



26/50




Selling Is Knowing(continued rom previous page)

Weak credit card penetration rates and online

fraud fears continue to present e-commerce

obstacles. E-commerce enabled brands tackle

the payment infrastructure in a variety of ways,

the most popular being accepting payments

from the customers bank online. More than

60 percent of brands provide payment optionthrough Alipay, a PayPal equivalent, popularized

by B2C e-commerce site Taobao. Nearly 60

percent of brands still accept cash on delivery.

KeyFindings E-Commerce Payment Methods% OF E-COMMERCE ENABLED SITES EMPLOYING THE FOLLOWING:

(August 2011)

0%

% o

f E

- C o m m e r c e

E n a

b l e d S i t e s

Credit CardAlipay Cash onDelivery

Online Banking Other

OTHER



27/50



% of Sites WITH the following:% of Sites WITHOUT the following:


Missed OpportunitiesFifty-six percent of Chinese luxury purchases

are made abroad, however, just over half of

Chinese language sites provide a U.S. and

European store locator, a missed opportunity

to provide information to Chinese tourists.

Although, speci c international information is

limited on many sites, so is local customization,

and less than a third of sites publish prices in

Renminbi.

Common 2.0 tools including user reviews and

social media integration, that are ubiquitous on

U.S. sites, particularly in commerce-oriented

categories such as Auto and Beauty, are only

incorporated on eight sites. In most cases, when

incorporated, social sharing via Chinese SNS

and solicitation of user reviews is relegated to

simple interface BBS forums.

KeyFindings

Site Features:% OF SITES WITH & WITHOUT THE FOLLOWING TOOLS

(August 2011)

42%

52%

68%

92%

92%

58%

48%

32%

8%

8%

European &U.S. Store

Locator

Wish List

Prices Viewable in

RMB

UserReviews

ContentShareable onChinese SNS



28/50



0%

Baidu:Paid Search

Google:Chinese Brand

Name

Baidu:Brand Zone

Baidu:Chinese Brand

Name

Google:Paid Search


Google:A Distant SecondGoogle continues to lose share in the Chinese

search market since redirecting searches to

Hong Kong in early 2010. The market share of

local search engine Baidu stands at 76 percent

versus Googles 19 percent. 6 This is a dramatic

shift from 2009, when Baidu controlled 58 per-

cent of the market versus Googles 36 percent.

Prestige brands continue to struggle with

visibility on the l ocal leader. Only 31 percent

of brand sites come up rst in organic search

results for the Chinese brand name, and 42

percent of sites are not returned in the top

three. Organic visibility has actually declined

on the platform since our May 2010 report,

as the Baidu algorithm increasingly prioritizes

organic returns of customers purchasing termson other Baidu platforms.

Brands are doing better on Google, however

optimizing for a search engine that has de-

creasing relevance is short-sighted.

KeyFindings

Brand Name Search ResultsPOSITION OF BRAND SITES INORGANIC SEARCH RESULTS

(August 2011)

Paid Search Tactics% OF BRANDS PARTICIPATING IN THE FOLLOWING

FOR BRANDED SEARCH TERMS (August 2011)

= CHINESE= ENGLISH

= 2010:1ST POSITION

= 2011:1ST POSITION

= 2010:OUTSIDE TOP 3

= 2011:OUTSIDE TOP 3

6. AnalysysInternational,

Seasonal Survey of

China Internet SearchMarket in Q2, 2011,July 2011.



29/50




KeyFindings

Pay to PlayPaid search accounts for 31 percent of total

online ad spend in China and search revenues

were up 67 percent year-over-year for 2010. 7

A quarter of the brands are engaging in paid

search on Baidu. Many are using paid search

to bypass Baidus algorithm and ensure visibil-

ity of their Chinese site. Despite being a proven

source of traf c, less than a quarter of the

brands are purchasing Baidu brandzones.

Without a presence on Baidu, brands arevirtually invisible in China. Baidus algorithmis different than Googles and requires adedicated strategy. In many ways, Baidu issimpler and more accessible than Google,and can be a very powerful tool with mini-mal investment.

1

3

5

2

4

6

Get Your License:A legal ICP license is crucial. Without a certifcate, site may be omitted rom search results.

Buy a Baidu Brandzone:Brandzones drive results. Brands report up to 30 percent o their tra fc originating rom a brandzoneand have seen click through rates up to 75 percent.

Cut the Code:Baidus crawler is not very sophisticated and requires aggressive spoon- eeding. Streamlining code andadding alternative text improves visibility. As with Google, ash-heavy sites encumber the crawler.

Host Your Site in China:Baidus crawler is impatient and will skip sites experiencing even minor latency issues eliminatingthe chance to appear in organic search results.

Reap What You Sow:Baidu content is prioritized in the search results. Curating brand content on Baidu plat orms Tieba( la orums), Baike ( la Wikipedia), and Zhidao ( la Yahoo Questions) is ree and can improvesearch results 10-20 percent i done right.

Backlinks Boost:Targeted e orts to acquire backlinks can signifcantly improve ROI and search visibility.

Six Simple Strategies for Successful SEO in China:

7. iResearch, 2010 Q4China Search EngineMarket January 2011.


30/50



Empty InboxEmail in China is often overlooked in favor of

SNS or BBS communication. However, more

than 65 percent of Chinese Internet users

regularly use email. The level of adoption

across the Prestige 100 indicates a missed

opportunity. Although 69 percent of brands

provide email opt-in, only 35 percent send

Chinese language emails and just 17 percent

send marketing emails after an initial welcome

email. Furthermore, 46 percent of Chinese

users access email through a mobile device, 8

but not a single brand optimized emails for a

mobile phone.

As brands continue to push towards e-com-

merce, email marketing becomes imperative.

Global consumer research suggests that the

Chinese are more receptive when it comes toemail as a call to action. Seventy- ve percent

of Chinese Internet users indicate wil lingness

to purchase after receiving an email, versus 51

percent in the U.S. and 43 percent in the U.K. 9

KeyFindings

% of Brands WITH the following:% of Brands WITHOUT the following:

Email Marketing:% OF BRANDS WITH & WITHOUT THE FOLLOWING:

(August 2011)

31%

57%

65%

83%

90%

100%

69%

43%

35%

17%

10%

0%

EmailOpt-in

WelcomeEmail

ChineseLanguage

Marketing

Email

Link toChinese

Social Media

Viewableon Mobile

8. 2010 China InternetMarket Annual Review

Report, iResearch,April 18, 2011.

9. China Internet

Network InformationCenter (CNNIC) 2011,eDialogue 2010.


31/50



Social ManiaUnlike other global markets, where network

effects lead to natural monopolies, the social

media ecosystem in China is fragmented.

Sixty-six percent of Prestige 100 brands have

presence on at least one platform, up from less

than ve percent in April 2010. More than half

are present on two or more, typically combining

a microblogging platform (Sina Weibo or Ten-

cent Weibo) and a video site (Youku or Tudou).

Geniuses Audi and Burberry are ghting a war

across several fronts and are present on six

and ve different social platforms, respectively.

Social media fragmentation coupled with the

fact that most efforts were launched in the past

12 months, leads to social media communities

that are much smaller than average Facebook

and Twitter equivalents. Brand communitieson Kaixin and Renren, Facebook substitutes

with some of the longest brand legacies,

are the largest, averaging slightly more than

133,000 and 101,000 members, respectively. In

contrast, the average brand page in t he June

2011 L2 Prestige 100 : Facebook IQ registered

almost 600,000 likes.

KeyFindings

0%

3-MonthTraffic Growth

Registered Users(in Millions)

Kaixin Youku TencentWeibo

SinaWeibo

Douban Tudou Renren

-29%16% No Data490% 5% 12% 6%

116231 233200 50 191 124

Social Media Adoption

% OF PRESTIGE BRANDS PRESENT ON CHINESE SOCIAL MEDIA PLATFORMS (August 2011)

*June 2011

SinaWeibo

Renren KaixinTencentWeibo

Facebook

Average # of FollowersCHINESE PLATFORMS VS. FACEBOOK

(August 2011)= 2011

= 2010


32/50



Wild About WeiboTraf c to Sina Weibo is up more than 490

percent in the past three months, and prestige

brands cant get enough of the microblogging

platform. Local jeweler IDo leads all brands on

Weibo on the heels of it s Irresistibly Appeal-

ing campaign in which users could spin a daily

prize wheel on the platform to win diamonds.

Auto brands claim ve of the top 10 spots,

most integrating Sina Weibo efforts with a

wealth of cross-platform digital campaigns.

In July, prestige brand Weibo fan growth aver-

aged 41 percent among brands with accounts

on the platform, a testament to its growth.

Ports 1961 led all brands in growth on Sina

Weibo, tripling its base over the course of the

month by referencing popular celebrities in

its posts. Audi was able to grow its alreadysubstantial base by 70 percent to more than

148,500 fans through it s Audi Driving Experi-

ence promotion.

KeyFindings

Top 10 Brands:Largest Sina Weibo Fan Base:

(August 2011)

IDoFollowers:409,374

CadillacFollowers:366,179

Mercedes-BenzFollowers:293,882

BMWFollowers:231,056

BurberryFollowers:180,964

AudiFollowers:148,567

Diane von FurstenbergFollowers:153,693

VolvoFollowers:117,103

Bene tFollowers:110,803

Louis VuittonFollowers:107,408

#1

#2

#3

#4

#5

#6

#7

#8

#9

#10

Top 10 Brands:Sina Weibo Follower Growth

(August 2011)

0% 100% 200% 300%

Ports 1961

Luk Fook

Ferrari

Shiseido

Herborist

Mot &Chandon

Calvin Klein

Audi

Rmy Martin

Dolce &Gabbana

#1

#2

#3

#4

#5

#6

#7

#8

#9

#10

314%

140%

136%

135%

128%

108%

77%

70%

70%

69%

Watches& Jewelry

Automobiles

Champagne& Spirits

Fashion

Beauty

KEY


33/50



KeyFindings Top 15 Brands: Organic Buzz

RELATIVE AGGREGATED ORGANIC MENTIONS ON SINA WEIBO & QZONE& NUMBER OF VIDEOS ON YOUKU & TUDOU

(August 2011)

VolvoMoutai(Maotai)

Herms Dior Prada Burberry Shiseido

Tiffany Porsche Gucci

BMWLamborghini

FerrariChanelAudi

#1 #5#4#3#2

#6 #10#9#8#7

#11 #15#14#13#12

Watches& Jewelry

Automobiles

Champagne& Spirits

Fashion

Beauty

KEY


34/50



0%

Mobile AppMobile Site

39%

-30%

12%

1%

31%

116%

0%

iPhoneiOS

iPad Mobile Site Android Ovi

Market Share

YOY Change

Mobile Adoption Rates(2010 vs. 2011)

Mobile Adoption Rates Across Platforms% OF BRANDS ON THE FOLLOWING MOBILE PLATFORMS:

(August 2011)

Mobile IncompatibleOf the 485 million Internet users in China,

318 million access the web through their mobile

phone. 10 Many Internet users have gone from

no Internet directly to mobile Internet. While

prestige brand programming on mobile plat-

forms has increased dramatically from 2010,

it has not kept pace with the opportunity.

Slightly more than half of brands have apps

available in the Chinese iTunes store, but two

thirds of these apps do not provide a Chinese

language option, and only threeLancme,

LOccitane, and Shanghai Tangare commerce

enabled. Furthermore, only two brands, Aston

Martin and Dolce & Gabbana, have created

apps for Nokias Ovi platform.

KeyFindings

= 2011= 2010

= AVAILABLE IN CHINESE

10. China Internet

Network InformationCenter (CNNIC),July 2011.


35/50



Flashof Genius

LAND ROVER:The Evoque EffectLand Rovers 360 digital campaign, The

Evoque Effect, highlights an ability to expand

and customize the user experience across a

variety of digital and social platforms. At the

core of the campaign is a half-animated,

eight- episode, mini action movie series, City

of Aurora . Android, iPhone, and iPad apps

provide additional screens for viewing the

episodes.

On Sina Weibo users can view themini movies and answer a series

of questions for a chance to win a

Macbook Air or create a custom poster

The Evoque Effect microsite

Sina Weibo pageused to drivetraf c to customSina event pages
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36/50



On Renren usersanswer quizzes around

the movies plot andcharacters for a chance towin prizes. The page also

included links to othersocial media properties

and a behind-the-scenesphoto gallery

Flashof Genius

On Douban users write theirown script or use an onlinetool to paint the city for achance to win prizes rangingfrom model cars to notebooksand pens

A virtual drive-in movietheater on Tudou allows

users to view the movies,leave comments, create

their own version of themovie using an onlineediting tool, and paint

their own comic cells withan online toolThe Evoque Effect continued
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37/50



Flashof Genius

Lambos on TaobaoTaobao controls 75 percent of all e-commerce

transactions in China, with 48,000 items

purchased every minute. Among the 800

million products sold on Taobao, is a $1 million

Lamborghini. 11 The online Taobao store, built by

a Shanghai dealer and approved by the brand,

is the only Chinese showcase for Lamborghini.

The store highlights the brand history that

would otherwise be lost in translation on the

English language site. Detailed product pages

for eight different models feature stunning

images and performance specs in Chinese.

Customers can leverage Wangwang, Taobaos

online chat functionality, to receive more

information about speci c models and after-sales

customer service. The site is more buzz than

business, however. Although it attracted morethan 8,000 orders, none of them resulted in an

actual purchase. 12 In addition to e-commerce

enabled sites, Chinese brands Chow Tai Fook,

Herborist, Luk Fook, and Wuliangye also

maintain Taobao stores. Lamborghini is the

only Western brand in the study with

a Taobao presence.Lamborghinis Taobaosales stunt succeeds ingaining buzz and raisingthe brand pro le

11. E-Commercein China: PatriarchicBenevolence, Tom

Doctoroff, Hu fngton Post , August 14, 2011.

12. Selling Lambo-rghinis on Taobao.com, Red Luxury,

May 26, 2011.
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38/50



Flashof Genius

Counteracting CounterfeitingCounterfeiting is a challenge for both brands

and consumers. Chinese spirit brand Wuliangye

has digitally armed its customers with the

means to authenticate its product. Through

its website, customers can enter the RFID

code from the box or the product code from

the bottle. Consumers can also text the RFID

code to a designated phone number to receive

authentication and to report manufacturers

and resellers of counterfeit products online.

In-store, Wuliangye provides RFID kiosks at

authorized retailers.

Wuliangye allowsconsumers toauthenticate theirproduct online
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39/50



Flashof Genius

Gucci StyleThe recently updated Gucci Style app

available for iPhone and iPad, although only

partially translated into Chinese, and lacking

e-commerce capability and Chinese social

networking integration, has garnered more

than 700 ratingsthe most of any brand in the

studyand is currently among the 60 most

popular lifestyle apps in the Chinese iTunes

store. Users can watch runway and travel videos,

add products to wish lists, share products via

email, and locate the closest store.

The Gucci Style appavailable in Chinese hasthe most ratings of anyin the study
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40/50



Flashof Genius

Personal AppealLooking to extend their brands, Diane von

Furstenberg and Bobbi Brown have joined

forces with Tom Cruise, Ricky Martin, and

Radiohead in signing up for a Sina Weibo

account. With the endorsement of Hong

Huang, the editor of fashion magazine iLook ,

Dianes account has garnered almost 154,000

fans, more than 34 times the number of fans

of the of cial DVF brand Sina Weibo account.

Diane von Furstenbergs weibos are in English

and directly lifted from her Twitter account.

Her account also reposts DVF brand weibos

in Chinese.

Similarly, most of Bobbi Browns weibos are

curated from her Twitter account and in English.

As she does on Twitter, Bobbi Brown accepts

questions from her Chinese fans in a monthlyseries called #Askbobbi. Her answers are

translated and posted in Chinese. The Sina

Weibo accounts of the Chinese make-up artist

team are highlighted. She also reposts from

the brand account, which has only 29,000

fans compared with her 107,400 fans.

Diane Von Furstenbergspersonal Sina Weibo page

DVFs SinaWeibo brandpage

Bobbi Brownspersonal Sina

Weibo pageBobbi Browns

Sina Weibobrand page

153,693

4,901

107,397

29,142

Followers on Sina Weiboas of August 2011
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41/50



Flashof Genius

IDo Does Sina WeiboIDo launched a Sina Weibo effort estimated

to have cost the brand millions of Yuan. The

Irresistibly Appealing campaign generated

more than 80,000 posts and 100,000 new Sina

Weibo fans. 13 During the study period, IDos

fanbase grew 28 percent to more than 409,000,

the largest community on Sina Weibo in the

study. Each day fans were able to spin a virtual

prize wheel on its Weibo page for a chance to

win a diamond ring or pendant. Fans were also

encouraged to post their dreams or submit via

mobile, for the chance to have it ful lled.

Weibo was also used to drive online traf c

of ine. Instructions were posted on Sina

Weibo for fans to obtain a free bracelet at an

IDo store. These bracelets contained a code

that was to be texted to a designated phonenumber for a chance to win a diamond. Within

three days, more than 10,000 bracelets were

given away and the company had to order

100,000 more to meet demand. 14

IDos IrresistiblyAppealing interactivecampaign on Sina Weibo

Fans show off theirbracelets on Sina Weibo

13. Weibo MarketingIs Irresistibly

Appealing to LuxuryBrands, Central

Peoples BroadcastingStation of China,

August 22, 2011.14. Ibid.
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Flashof Genius

Badges Before BagsLuxury brands have taken to Chinese

Foursquare clone Jiepang to raise

brand awareness and drive online/of ine

engagement. Virtual badges on the phone

replace shopping bags as a digital symbol

of exclusivity and being in the know.

Guerlain and BMW have also experimented withevent speci c Jiepang promotions, but do not

maintain a permanent presence on the platform.

Date Brand Badge Jiepang Followers Promotion

April 2011 888Sina Weibo fans that checked into one of threeBeijing stores received a virtual badge and wereentered into a drawing for the chance to win aVIP pass to the grand opening party for its BeijingSparkle Roll Plaza store.

April 2011 126Users who checked in at any Chinese Swarovskiboutique received a virtual badge. Swarovskiprovided location-based tips and activities tocelebrate Spring.

June 2011 676Users who checked-in at the Louis Vuitton ArtCosmic Voyage exhibit at the National Museum ofChina and shared it via any of the Chinese socialnetworks earned an LV virtual badge.

Burberry
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43/50



Flashof Genius

Joy Is BMWThe Joy Is BMW microsite features content on

the next generation of BMW hybrid technology

and a series of videos in which everyday people

describe the impact that BMW has had on their life.

The sites contest, launched simultaneously on

Sina Weibo and Tencent Weibo, allows users

to share their own story in 1,000 words or less.The author of the tale with the most votes per

platform will win a BMW bicycle, and the best

overall will get to appear in a BMW Joy video.

The most popular story to date on the microsite

has received almost 315,000 votes.

Users submit their stories or place their votes

through branded Sina and Tencent event

pages. An app analyzes the content of their

Weibo page to detect their joy level. If they

share their results with 3 friends they receive

a BMW virtual badge. BMWs Tencent Weibo

following grew 736 percent to more than

135,000. The hashtag #BMW #

(#JoyOfBMWStories) generated 16,766 posts

and 3,671,131 mentions during the month

of July. The hashtag #BMW #

(#WhatIsBMWCreating) generated 23,370 posts.

BMWs TencentWeibo page

Joy Is BMWmicrosite

Users share theirstories to collectvotes in order towin a BMW bicycle

Joy Is BMWSina event page
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44/50



Flashof Genius

Este Laudersinteractive gameon Renren

Este LaudersRenren brand page

Este LaudersKaixin pageEste LaudersBBS,EL-Lady

ESTE LAUDER:Applauded on Social MediaIn July, Este Lauder grew its Renren followingmore than 50 percent (the most of any brand)to more than 200,000. Its Renren page featuredan interactive game in which users were chal-lenged to collect coins. Additional points couldbe gained by sharing the game with friends.The top scorers received a tube of the newIdealist eye cream. More than 76,000 usersparticipated in the game, which linked to EsteLauders e-commerce site.

Este Lauders BBS, EL-Lady , combines edito-rial content, interactive games, videos, promo-tions, product recommendations from featuredcommunity members, and online shopping. AllBBS content is shareable to Kaixin, and selectcontent can be shared on other SNS platforms.BBS members are encouraged to answereach others makeup questions and give tips.Interactive skin care surveys and online testsprovide customized product recommendations.

Este Lauder has amassed more than 625,000followers on Kaixin, a social platform whosetraf c is down 28 percent in the last threemonths. The challenge for Este Lauder willbe to migrate these fans to new platforms orto its own branded BBS, EL-Lady . Thus far, thebrands Sina Weibo account has slightly more

than 45,500 fans.
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45/50



Flashof GeniusMade for China

Despite the Chinese love of foreign brands,a number of prestige brands have launchedsub-brands, product lines, or special editionsexclusively in China in effort to appeal to the localconsumer, increase brand awarenes s, andbuild goodwill with the Chinese government.

With its China-only brand, Classivm, Hennessy

is leveraging digital to help it reach the young,urban Chinese consumer through a dedicatedmicrosite and Sina Weibo account. Themembership-based microsite, infused withstreet culture, promotes sponsored events, providesdrink recipes, and hosts a series of contests.

In the latest contest, users create a pro le,upload their picture, assume one of four hiphop personasrapper, breakdancer, beatboxer or graf ti artistto create a custom

video featuring their animated avatar or submita new idea with an accompanying photo. Sitemembers vote on the submissions with the top

ve vote getters for each contest receiving a $250watch. Voters are also eligible for a prize.

As of August 31, almost 900 people participatedin the video contest, and the top ve contes-tants had a combined 596,450 votes. Twohundred- fty people participated in the NewIdea contest, with the top ve contestants

earning a total of 93,210 votes.

The micrositeis sharable onKaixin, Baidu

Space, Renren,Qzone, and SinaWeibo

Site memberscreate a pro le and

animated avatars thatothers can vote on

Sina Weiboaccount promotesthe contests and

encourages voting
http://www.l2thinktank.com/mailto:info%40L2ThinkTank.com?subject=Facebook%20IQ%20-%20Inquiryhttp://www.hxindian.com/101campaign/game.aspx?roleID=3http://www.hxindian.com/101campaign/gallery.aspxhttp://www.hxindian.com/http://weibo.com/1912286682mailto:info%40L2ThinkTank.com?subject=Facebook%20IQ%20-%20Inquiryhttp://www.l2thinktank.com/


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Flashof Genius

Beijing BackdropLuxury brands have harnessed online video to

introduce themselves to the Chinese market

and announce to the world its importance.

Fall/Winter CollectionBeijing Event LiveStream on PPTV

Beijing Hologram FashionShow Live Stream

Lady Blue Shanghai

Fall 2011 AdCampaignShanghai
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BiographiesSCOTT GALLOWAY Clinical Professor of Marketing, NYU SternFounder, L2

Scott is the founder of L2, a think tank for digital innova-tion, and a Clinical Professor of Marketing at the NYU SternSchool of Business where he teaches brand strategy anddigital marketing. Scott is also the founder of FirebrandPartners, an operational activist rm that has invested morethan $1 billion in U.S. consumer and media companies. In1997, he founded Red Envelope, an Internet-based con-sumer gift retailer (2007 revenues: $100 million). In 1992,

Scott founded Prophet, a brand strategy consultancy thatemploys more than 120 professionals in the United States,Europe, and Asia. Scott was elected to the World EconomicForums Global Leaders of Tomorrow, which recognizes100 individuals under age 40 whose accomplishmentshave had impact on a global level.

Scott has served on the boards of directors of Eddie Bauer,The New York Times Company, Gateway Computer, eco-

America, and UC Berkeleys Haas School of Business. Hereceived a B.A. from UCLA and an M.B.A from UC Berkeley.

DOUG GUTHRIEDean, GWSBDoug has been an expert in Chinese economic reform formore than decade, a trusted adviser of both multinationalsand local Chinese companies, and a student of China forsome 25 years. He is the author of Dragon in a Three-Piece Suit: The Emergence of Capitalism in China and China and Globalization: The Social, Economic and Political Transfor-mation of Chinese Society , and is co-editor of Social Con-nections in China: Institutions, Culture, and the ChangingNature of Guanx i. He is currently writing Chinas Radical Transformation: Economic Reform, Global Integration, and

Political Change in the Worlds Largest Nation , which is an

in-depth look at how Chinas government-driven form ofcapitalism has successfully overcome traditional theories ofdevelopment and helped China become the economic andpolitical juggernaut it is today. In addition to these majorworks, Doug has published more than 60 articles on Chinaand has been an invited speaker on a number of occasions.

Doug is currently the Dean of the George WashingtonSchool of Business and has taught at NYU Stern, HarvardBusiness School, INSEAD, and the Graduate Schools ofBusiness at Stanford University, Columbia University, andEmory University. He received his B.A. in Chinese literaturefrom the University of Chicago and a Ph.D. in organizationalsociology from the UC Berkeley.

MAUREEN MULLENL2

Maureen leads L2s Research and Advisory Practice whereshe helped developed the Digital IQ Index . She has bench-marked digital marketing, e-commerce, and social mediaefforts of more than 300 brands across Pharma, Auto,Luxury, Specialty Retail, Beauty, and the Public Sect or. Mau-reen also has led digital strategy consulting engagementsfor a variety of Fortune 1000 clients. Before joining L2, Mau-reen was with Triage Consulting Group and led managedcare payment review and payment benchmarking projectsfor hospitals, including UCLA Medical Center, UCSF, andHCA. Maureen has a B.A. in Human Biology from StanfordUniversity and an M.B.A. from NYU Stern.

R. DANIELLE BAILEY L2

Danielle began her career at The Home Depot, Inc., whereshe led a variety of internal consulting engagementsfocused on supply chain, merchandising, and in-store pro-

cess improvement. She went on to manage the implemen-tation of award-winning mobile initiatives for several large

media clients, including The New York Times Company,NBC Universal, Disney/ABC, Maxim magazine, and Zagat.While at L2 she has benchmarked the digital competenceof brands spanning the Specialty Retail, Public Sector,Pharma, Wine & Spirits, Travel, and Financial Servicesindustries. Danielle has a B.S. in Systems Engineering fromthe University of Virginia and an M.B.A. from NYU Stern.

CHRISTINE PATTONCreative Director, L2

Christine is a brand and marketing consultant with more

than 15 years of experience creating brand identities andmarketing communications for aspirational and luxurybrands. As creative director of L2, she leads the transla-tion of the L2 brand across all touchpoints, with a particularfocus on the visual packaging of L2s research. She beganher career at Cos, where she developed the brand andoversaw its evolution from concept through growth to 100restaurants. Since then she has provided creative directionfor a wide array of clients, including the launch of Kidvilleand CosmoGIRL! magazine. Christine received a B.A. inEconomics and Journalism from the University of Connecti-cut and an M.B.A from NYU Stern.

JESSICA BRAGAL2

Jessica, a freelance art director, specializes in identity,iconography, event graphics, and invitations. She beganher career in fashion, designing textiles and prints at ElieTaharis design studio in New York City. She then focusedon the Elie Tahari brand aesthetic and consistency in designacross its many developing disciplines. She went on t obecome the art director of a small, prestigious design rm inChelsea, where she focused on event graphics, digital andprint collateral, and brand aesthetics for companies both

large and small. Jessica has a B.F.A. in Graphic Design andan A.A.S. in Illustration from Rochester Institute of Technology.
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BiographiesSAGE BRENNANChina Luxury Network

Sage is a longtime media and Internet analyst in China,most recently based in Shanghai. He has a broad range ofmarketing, consumer research, market entry, and nancialanalysis experience, as both an advisor and a managerof entrepreneurial companies in China. Sage is a founderand curator of the Shanghai chapter of MobileMonday andTEDxShanghai.

Most recently, Sage was research director of Hong Kong-based hedge fund Paci c Sun Inv estment Managementand chief representative of the rms China operations,based in Shanghai. Before that, he was general managerof Shanghai-based Paci c Epoch, a boutique telecom andtechnology research rm later acquired by Paci c CrestSecurities. He contributed the weekly This Week in Chinacolumn to Dow Jones MarketWatch for two years, and re-mains a frequent commentator on China-related media andtechnology issues in print media and on programs such asCNBCs Asia Squawk Box .

A native of Boston, Sage has both an undergraduate de-gree in International Studies and an M.B.A. from the Univer-

sity of North Carolina at Chapel Hill and has been speakingand studying Mandarin since he rst lived in Beijing in 1987.

RICHARD HSUBrand Translation Expert H+ Branding

Born in Shanghai, Richard studied architecture in theU.S., developing a career in retail, advertising, branding,and design across the U.S., Europe, Japan, and Asia. In2003, Richard returned to China to lead the opening ofWieden+Kennedys China of ce in Shanghai. In 2006,he opened the brand consultancy rm [h+] in Shanghai,

which focuses on China and China-related brands, talents,

and education. Richard lectures regularly in the subjects ofbrand development and multi-disciplinary design at Colum-bia University, New York University, Tongji University, and theCentral Academy of Fine Arts Beijing.

EMMA LIL2

Emma has served as a research analyst in China and hasworked on a number of engagements advising foreigncompanies on their China expansion strategies and marketprospects. For two years, she supported the online publica-

tion Jing Daily , conducting research and assessing trendsin the Chinese luxury and contemporary art markets. Bornand raised in China, Emma speaks Mandarin and Canton-ese. She received her Bachelor of Commerce degree fromthe University of Windsor and has a M.A. in Cross-CulturalCommunication from New York University.

XI CHENL2

Born and raised in Beijing and a resident of New York formore than two years, Xi serves as a bridge between Ameri-can and Chinese culture. Her experience running a store onTaobao provides her with a unique perspective on fashionand commerce in China. Xi previously worked in personalbanking for RBC, providing customized and localized bank-ing services to Chinese clients. Xi has a B.B.A. from CapitalUniversity of Economics and Business in Beijing and anM.A.in International Education from New York University.

Additional thanks to Yvonne Du, Winnie Rui, andFlora Lan, who served as additional data collectionresources and advised on methodology.
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L2 is a think tank for digital innovation.We are a membership organization that brings together thought leadership from academia and industry to drive digital marketing innovation.

RESEARCHDigital IQ Index: The de nitive benchmark for online competence, Digital IQ Index reports scorebrands against peers on more than 350 quantitative and qualitative data points, diagnosing their

digital strengths and weaknesses.

Prestige 100: These reports index and analyze the IQs of 100 iconic prestige brands in areas key tofuture growth. Publications in 2011 will measure the performance of the Prestige 100 brand set in two

of the worlds largest markets, Facebook and China, as well as on Mobile platforms.

EVENTSForums: Big-picture thinking and game-changing innovations meet education and entertainment.The largest gatherings of prestige executives in North America. 300+ attendees

Clinics: Executive education in a classroom setting with a balance of theory, tactics, and casestudies. 60 120 attendees

Working Lunches: Members-only lunches led by digital thought leaders and academics.Topic immersion in a relaxed environment that encourages open discussion. 12 24 attendees

MBA Mashups: Access and introduction to digital marketing talent from top MBA schools.

CONSULTINGAdvisory Services: L2 works with brands to garner greater return on investment in digital initiatives.

Advisory work includes Digital Roadmaps, Social Media Strategy, and Site Optimization engagements.

MEMBERSHIPFor membership info and inquiries: [email protected]

UPCOMING 2011 EVENTS10.14.11 L2 Clinic The Social Graph: China SHANGHAI

L2s inaugural event in China will probe the underpinnings,

platforms, and best practices of social media in China. This

intensive executive session will enhance participants uency in

brand-driven social media efforts on Chinese platforms.

11.10.11 L2 Forum Innovation 2011 NYC

Called the TED for marketing, L2s third-annual Innovation

Forum will bring together the highest density of scholars,business leaders, startups, and marketing executives in

North America.

11.21.11 L2 Clinic The Social Graph: Europe PARIS

Academics and industry professionals highlight the

opportunities, challenges, and underpinnings of social media

in the prestige industry in a one-day, intensive Clinic.

UPCOMING 2011 RESEARCHPRESTIGE 100 Reports:

Mobile

DIGITAL IQ INDEX Reports:

Beauty

Fashion & Leather Goods

Watches & Jewelry
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A THINK TANK f or DIGITAL INNOVATION

51 East 12th Street, 2nd FloorNew York, NY 10003

W: L2ThinkTank.comE: info@L2ThinkTank com
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prestige china 2011

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