L2 Prestige100 - China IQ 2011

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Transcript of L2 Prestige100 - China IQ 2011

  • September 13, 2011SCOTT GALLOWAY China IQNYU SternDOUG GUTHRIEThe George Washington University School of Business L2 2011 L2ThinkTank.com
  • Friday, October 14 HOSTED BY: CEIBS, Shanghai China Europe International Business School Pre-event reception: Thursday, October 13 Four Seasons Shanghai For an invitation & more information, contact: CLINIC Joseph@L2ThinkTank.com CORPORATE PARTNERS:The Social Graph: ChinaL2s 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 different from other markets. MEDIA PARTNERS: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 strategiesthat lead to success, as well as findings from the 2011 L2 Prestige 100: China IQ. GONGXF.COM
  • Want to know more about your brands China IQ? CONTACT US China: The greatest opportunity for prestige brands in a generation Tomorrow Belongs to Me McKinsey reports that 73 percent of Chinese luxury consumers are under the age of 45, and upwards of 45 percent are under the age Over the next 15 years, the global addressable market of 35, suggesting that the majority of prestige purchasers are digitally for luxury goods is expected to grow by 600 million native.3 In the U.S., the average female prestige consumer registers consumers, provoking growth forecasts of 2.2 times GDP.1 Much household income of $150,000 and spends $3,000 annually on of this growth is projected to come from one market: China. In handbags. In contrast, the average female prestige consumer in 2000, the Chinese market accounted for a fraction of luxury sales China makes $18,300 (125 RMB) and spends $2,000 annually on globally, however torrid growth means in 2015, China will likely handbags.4 Often these purchases occur after two to three months overtake Japan as the worlds largest luxury market. of research and consideration, most of it done online. Forget What You Know The fastest growing luxury channel(s) in China: The algorithm for success in China is different: Paris and New York Increasing wariness of counterfeit merchandise, coupled with Less about a 50-something millionaire, more about a 30-some- significantly lower prices abroad, has led to 56 percent of Chinese thing, upper middle class consumer luxury purchases occurring outside of China, suggesting that a Less about retail in Tier I cities, more about new modes of distri- brands digital marketing investments on the mainland drive sales 1. McKinsey & Com- bution in Tier ll and lll cities in Shanghai and Beijing... and New York, Paris, and Hong Kong.5 pany, Understanding Chinas Love for Luxury, March 2011. Less about print, more about mobile and emerging platforms 2. Ibid. Less about expert editorial, more about peer reviews, as Digital Is Different 3. Ibid. 60 percent of consumers indicate that the Internet is one of the Not a single global Internet leader is number one in China. The pro-4. Pao Principle, 2010. 5. Bain & Company, primary sources for information on luxury goods (up from 30 liferation of SNS platforms, BBS sites, and other digital channelsChinas Luxury Market Study 2010, percent in 2008)2 present a challenge to marketers. The environment favors brands November 2010. L2 2011 L2ThinkTank.com 3
  • Want to know more about your brands China IQ? CONTACT US that adopt nimble, platform-agnostic digital strategies that can be Internet Tidal Wave adapted to multiple channels. A testament to the pace of change, INTERNET USERS IN THE WORLDS LARGEST LUXURY MARKETS Chinese microblogging platform Sina Weibo was not analyzed in 2010 vs. 2015 our May 2010 study. Launched in August 2009, the platform has (in Millions) added more than 10 million users per month and recently topped 200 million registered accounts. Sina Weibo has become the 800 platform of choice for prestige brands57 percent of the brands = CHINA 740 in the study now maintain an official presence. = U.S. = JAPAN = U.K. China IQ = Growth = FRANCE Our thesis is that success in the worlds fastest-growing prestige 600 market is inextricably linked to digital competence. This study attempts to quantify the digital competence in China of 100 iconic