L2 Prestige100 - China IQ 2011

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China IQ © L2 2011 L2ThinkTank.com SCOTT GALLOWAY NYU Stern September 13, 2011 DOUG GUTHRIE The George Washington University School of Business

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Transcript of L2 Prestige100 - China IQ 2011

Page 1: L2 Prestige100 - China IQ 2011

China IQ© L2 2011 L2ThinkTank.com

SCOTT GALLOWAYNYU Stern

September 13, 2011

DOUG GUTHRIEThe George Washington University School of Business

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The Social Graph: ChinaCLINIC

L2’s 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 of millions of Chinese consumers with increasing disposable income and a voracious appetite for luxury goods. In 2009, China surpassed the United States as the world’s second-largest luxury market, trailing only Japan. However, while several prestige brands have been operating in China for almost 20 years, most are still trying to determine how to best tap this enormous but complex opportunity.

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

The L2 China Clinic will provide a framework for thinking about the overall opportunity in China for prestige brands. Speakers will explore the key digital players and strategies that lead to success, as well as findings 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]

工学坊GONGXF.COM

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Over the next 15 years, the global addressable market for 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 world’s 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 age

of 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

significantly lower prices abroad, has led to 56 percent of Chinese

luxury purchases occurring outside of China, suggesting that a

brand’s digital marketing investments on the mainland drive sales

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

Digital Is Different

Not 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 for prestige brands in a generation

1. McKinsey & Com-pany, “Understanding

China’s Love for Luxury”, March 2011.

2. Ibid.

3. Ibid.

4. Pao Principle, 2010.

5. Bain & Company, “China’s Luxury Market

Study 2010”, November 2010.

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0

200

400

600

2010 2015

800740

450TOTAL:

447TOTAL:

401 43

39 50

4497

94

257224

Inte

rnet

Use

rs (i

n M

illion

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 brands—57 percent of the brands

in the study now maintain an official presence.

China IQ = Growth

Our thesis is that success in the world’s 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 improve

our approach, investigation, and findings. 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 WORLD’S 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

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Popu

latio

n (in

Milli

ons)

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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Methodology

SITE: 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 Traffic, 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+ GENIUS

Digital competence is a point of differentiation. Site content is innovative and optimized for the Chinese consumer. Chinese social media efforts complement broader digital strategy. Brand experience seamlessly extends across mobile platforms.

110-139 GIFTED

Brands are experimenting and innovating across site, mobile, and social platforms. Digital presence is consistent with brand image and larger marketing efforts.

90-109 AVERAGE

Digital presence is functional yet predictable. Efforts are often siloed across platforms.

70-89 CHALLENGED

Limited or inconsistent adoption of mobile and social media platforms. Site lacks inspiration, does not translate to the Chinese consumer.

<70 FEEBLE

Investment does not match opportunity.

ONLINE VIDEO:

• Youku: Views, Number of Uploads, Subscriber Growth, Viral Videos

• Tudou: Views, Number of Uploads, 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 Media Integration

• Customer Service

• Account Services

• Content Localization

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BrandRanking Watches

& JewelryAutomobiles Champagne

& SpiritsFashionBeauty

Rank Brand Category China IQ Class Description

1 AUDI Automobiles 170 GeniusInnovation in technology: maintains presence on six different social media sites in addition to its own OurAudi.com

2 BURBERRY Fashion 157 GeniusLuxury’s digital darling doesn’t disappoint. From Jiepang VIP guest passes for Beijing grand opening to Christopher Bailey soundtrack on Youku, Burberry claims the fashion crown

3 BMW Automobiles 155 GeniusFrom “beasts to joy”—sheer social pleasure; great translation of a global campaigns for the Chinese market

4 VOLVO Automobiles 133 Gifted C70 Sina Weibo challenges consumers to design the plot for the next Volvo commercial

5 BENEFIT COSMETICS Beauty 127 GiftedLocal e-commerce launch caters to consumers with samples and gift-with-purchase offer; Sina Weibo and Kaixin “Benefit Beach Honey” contests delight

6 CADILLAC Automobiles 124 Gifted Recently released Route 66 short film starring Karen Mok across site and social media

6 ESTÉE LAUDER Beauty 124 Gifted EL-Lady BBS includes videos, games, Q&A, and link to purchase

8 LAND ROVER Automobiles 122 Gifted “The Evoque Effect” sets the standard for multichannel digital campaigns

8 MERCEDES-BENZ Automobiles 122 GiftedSLK Mask Party contest provides winners tickets to China Fashion Week and site visitors an opportunity to create their own virtual mask

10 PORSCHE Automobiles 112 GiftedInnovative comparison tool and stunning microsites for each model are the engine of their online presence

11 FERRARI Automobiles 111 Gifted Sina Weibo fans earn tickets and tees for Ferrari Racing Days in Shanghai

12 INFINITI Automobiles 110 GiftedOnline owners club provides access to forums, downloads and events; however could be updated more frequently

13 HERBORIST Beauty 108 Average Launched sampling program through popular fashion BBS communities Only Lady and Metroer

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Brand Ranking Watches

& JewelryAutomobiles Champagne

& SpiritsFashionBeauty

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 LANCÔME Beauty 107 Average Rose Beauty continues to score points, but Sina Weibo hasn’t 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 KIEHL’S Beauty 102 Average Dedicated Sina blog profiles local influencers

21 CHRISTIAN DIOR Fashion 101 Average Lady Blue Shanghai film disappoints with only 146 views on official 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 men’s fashion show exclusively through iOS and Android platforms

24 SK-II Beauty 98 AverageMore that 180,000 user wishes have been submitted through the “Start Early” microsite for a chance to win gifts and samples

25 OMEGA Watches & Jewelry 96 AverageResting on the laurels of China legacy; dedicated Youku page and well-configured watch finder aren’t enough to keep time

26 M•A•C Beauty 95 Average Dynamic product recommendation engine transcends borders

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Brand Ranking Watches

& JewelryAutomobiles Champagne

& SpiritsFashionBeauty

Rank Brand Category China IQ Class Description

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

28 JOHNNIE WALKER Champagne & Spirits 91 Average Yulu campaign features 12 mini films 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 men’s collection

30DIANE VON FURSTENBERG

Fashion 90 Average Diane’s personal Sina Weibo account gets a boost from media mogul Hong Huang

30 LONGINES Watches & Jewelry 90 Average China-specific 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 ChallengedLive-streamed a press conference announcing its new models, but needs to push the accelerator on its digital efforts

36 GUERLAIN Beauty 88 Challenged1,570 participants on the Rouge Aomatique microsite indicates the brand is puckering up to the Chinese market

37 HUBLOT Watches & Jewelry 87 ChallengedTeaming with Formula 1 racer/blogger Han Han to create limited edition watch and accompanying Sina 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 than 1.5 million views

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Brand Ranking Watches

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& SpiritsFashionBeauty

Rank Brand Category China IQ Class Description

40 CHLOÉ Fashion 82 ChallengedChloé’s short-lived Chinese-language blog live-streamed runway shows and garnered more than 40,000 visitors

40 SHISEIDO Beauty 82 ChallengedAlmost 9,000 votes were cast in the search to find the best beauty expert on the brand’s 13,660 member BBS

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

42 ROLEX Watches & Jewelry 80 ChallengedMust spend time on more than a mobile-optimized China site and a Youku channel if it wants to raise its profile

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

45 JAEGER-LECOULTRE Watches & Jewelry 79 ChallengedTranslated microsite allows Chinese consumers to celebrate the 80th anniversary of the Reverso collection

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

45 TIFFANY & CO. Watches & Jewelry 79 ChallengedSingle 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

48IWC SCHAFFHAUSEN

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

50 IDO Watches & Jewelry 77 ChallengedSina Weibo following more than 400,000 strong; decicated Sina Weibo account provides customer service

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

51 L’OCCITANE Beauty 76 Challenged One of three in Index with e-commerce enabled mobile app

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Brand Ranking Watches

& JewelryAutomobiles Champagne

& SpiritsFashionBeauty

Rank Brand Category China IQ Class Description

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

54 RÉMY 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 Café Laneige online community enhances interactivity

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

56 PIAGET Watches & Jewelry 72 Challenged Official 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 It’s 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 & Jewelry 66 Feeble Huge SNS buzz, but not much else

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Brand Ranking Watches

& JewelryAutomobiles Champagne

& SpiritsFashionBeauty

Rank Brand Category China IQ Class Description

64 TAG HEUER Watches & Jewelry 66 Feeble Tick tock—patience 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 doesn’t support e-commerce

71 CHOPARD Watches & Jewelry 63 Feeble Chopard Diary boasts strong content; too bad it isn’t 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 BALLANTINE’S Champagne & Spirits 61 Feeble Chinese golf fans can follow the action at the Ballantine’s 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 simplified Chinese translation

77 FERRAGAMO Fashion 60 Feeble Not much other than a Sina Weibo account with 30,000 fans and not a single post

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Brand Ranking Watches

& JewelryAutomobiles Champagne

& SpiritsFashionBeauty

Rank Brand Category China IQ Class Description

77 HERMÉS Fashion 60 Feeble Offline innovation doesn’t translate online

80 MOUTAI (MAOTAI) Champagne & Spirits 58 Feeble Eagerly awaiting impending BBS launch and reactivation of online e-commerce

80 PRADA Fashion 58 Feeble Luxury’s 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 Nokia’s Ovi platform

83 CHIVAS REGAL Champagne & Spirits 55 Feeble Supporting site info for “Craft of Chivalry” concert tour is first step

83 ERMENEGILDO ZEGNA Fashion 55 FeebleMen’s runway at fashion week featured projections of Chinese landscapes; but with limited visibility on Baidu, did content even reach Chinese consumers?

86 MARC JACOBS Fashion 54 Feeble Should read Louis Vuitton’s manual on courting China

87 MOVADO Watches & Jewelry 52 FeebleCompany website has good localized Chinese content but limited interactivity beyond flash navigation

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

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

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

91 HARRY WINSTON Watches & Jewelry 50 Feeble Rich site heritage content is tempered by poor load times

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Brand Ranking Watches

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& SpiritsFashionBeauty

Rank Brand Category China IQ Class Description

91 MOËT & CHANDON Champagne & Spirits 50 Feeble Recent “Mr. & Miss Moët” Sina Weibo contest suggests IQ is about to pop

93 VACHERON CONSTANTIN Watches & Jewelry 49 Feeble English-only watch configurator and absent concierge need resetting

94 BELVEDERE VODKA Champagne & Spirits 46 Feeble Facebook focus doesn’t help in the East

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

96 YVES SAINT LAURENT Fashion 43 Feeble Despite the iconic brand’s 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 PÉRIGNON Champagne & Spirits 26 Feeble China is in love with the brand; its digital presence not so much

100 VEUVE CLICQUOT Champagne & Spirits 24 Feeble Flat

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K E Y F I N D I N G S

In the Company of Genius

Two of 2010’s five Genius brands, Audi and

BMW, retained their status, the other three,

Lancôme, Estée 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 Benefit Cosmet-

ics, were among 2011’s biggest winners, both

launching e-commerce in the past 12 months

and making significant 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 across

the Site dimension. Brands that score well

have developed transaction-oriented sites with

superior customer service, Chinese-specific

technology integration, tailored content, and

consistent translation.

Key Findings

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

CHINA IQ

<70

Herborist

Swarovski

Cartier

Gucci

Lancôme

Louis Vuitton

Chanel

Kiehl’s

Christian Dior

Clinique

Dolce & Gabbana

SK-II

Omega

M•A•C

Hennessy

Johnnie Walker

Lexus

Coach

Diane von Furstenberg

Longines

CHINA IQ

90-109

CHINA IQ

>140

Audi

Burberry

BMW

CHINA IQ

110-139

Volvo

Benefit Cosmetics

Cadillac

Estée Lauder

Land Rover

Mercedes-Benz

Porsche

Ferrari

Infiniti

GIFTED

CHINA IQ

70-89

Acura

Chow Tai Fook

Jaguar

Guerlain

Hublot

Clarins

Yue-Sai

Chloé

Shiseido

Maserati

Rolex

Shanghai Tang

Jaeger-LeCoultre

Raymond Weil

Tiffany & Co.

Bulgari

IWC Scaffhausen

IDo

Calvin Klein

L’Occitane

Audemars Piguet

Rémy Martin

Pandora

Laneige

Luk Fook

Piaget

Armani

Bottega Veneta

Fendi

Lamborghini

Rolls-Royce

Hugo Boss

Montblanc

TAG Heuer

Versace

Alfred Dunhill

Balenciaga

Bobbi Brown

Chopard

Givenchy

Miu Miu

Ports 1961

Ballantine’s

Wuliangye

De Beers

Ferragamo

Hermés

Moutai (Maotai)

Prada

Valentino

Aston Martin

Chivas Regal

Ermenegildo Zegna

Marc Jacobs

Movado

Ralph Lauren

Van Cleef & Arpels

Patek Philippe

Harry Winston

Moët & Chandon

Vacheron Constantin

Belvedere Vodka

Macallan

Yves Saint Laurent

David Yurman

Baccarat

Dom Pérignon

Veuve Clicquot

AVERAGE

CHALLENGED

FEEBLE

GENIUS

9%

3%

31%

20%

37%

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Top 20 Brands

Rank Brand IQ Class IQ Score

#1 Audi Genius 170

#2 Burberry Genius 157

#3 BMW Genius 155

#4 Volvo Gifted 133

#5 Benefit Cosmetics Gifted 127

#6 Cadillac Gifted 124

#6 Estée Lauder Gifted 124

#8 Land Rover Gifted 122

#8 Mercedes Benz Gifted 122

#10 Porsche Gifted 112

#11 Ferrari Gifted 111

#12 Infiniti Gifted 110

#13 Herborist Average 108

#13 Swarovski Average 108

#15 Cartier Average 107

#15 Gucci Average 107

#15 Lancôme Average 107

#18 Louis Vuitton Average 104

#19 Chanel Average 103

#20 Kiehl’s Average 102

Rank Brand IQ Class IQ Score

#1 Lancôme Genius 167

#2 BMW Genius 157

#2 Estée 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 Infiniti 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 IQ Scores

TIE

TIE

2010 2011

Watches& Jewelry

Automobiles

Champagne& Spirits

Fashion

Beauty

KEY

= BRANDS THAT RANKED IN THE SAME IQ CLASS IN 2010 & 2011

= BRANDS THAT RANKED IN THE TOP 20 IN BOTH 2010 & 2011 BUT CHANGED IQ CLASSES

TIE

TIE

TIE

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Key Findings

GENIUS BRANDS: Audi

Renren: Users compete for a chance to win professional racecar training at Shanghai’s Formula 1 race track.

Sina Weibo: A branded Sina event page, linking to the official Weibo account, features the interactive Audi Driving Experience game. The winner receives a PS3 or iPad 2. Fans on the brand Sina Weibo page grew 70 percent to almost 61,000, from July 1 to August 1.

The Audi Driving Experience hashtag #奥迪驾控汇# has generated 147,850 posts on Sina Weibo. Audi also maintains separate Weibo pages for many of its models.

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Key Findings

GENIUS BRANDS: Audi

Kaixin: 181,450 followers.

Youku: 275,590 video views.

Tencent Weibo: Presence on Tencent Weibo is in its infancy.

Mobile: Multiple Chinese-language mobile apps provide virtual tours of the Audi A8L and complement a mobile optimized brand site.

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Digital Innovation at Brick and Mortar Stores: Burberry’s Chinese stores are outfitted with the latest in digital technology, including full-length touch screens and iPads.

Key Findings

GENIUS BRANDS: Burberry

Site: Chinese-language, e-commerce enabled site mirrors the brand’s global experience, including Chinese subtitled versions of the Burberry Acoustic video series.

Mobile: E-commerce enabled Chinese-language mobile site translates.

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Key Findings

GENIUS BRANDS: Burberry

Live Stream: An all-digital, holographic fashion show was streamed on brand site, marking the grand opening of the flagship Beijing store.

Youku: Milan Fashion Show live stream on Youku garnered Burberry almost 1.2 million views on its channel.

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Key Findings

GENIUS BRANDS: Burberry

Kaixin: 61,920 followers.

Douban: 20,780 members enjoy Acoustic series videos, product photo galleries, and a music channel on Douban.fm.

Sina Weibo: 182,250 Sina Weibo fans are treated to product videos and pics, magazine covers, and celebrity sightings.

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GENIUS BRANDS: BMW

Key Findings

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

iPhone App: Exclusive iPhone app for Chinese BMW owners, MyBMWClub includes click-to-call customer service, a dealer locator, and offline meet-ups and events.

Sina Weibo: 240,300 fans on Sina Weibo experience the Joy of BMW.

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Key Findings

GENIUS BRANDS: BMW Youku: There are 31,800 unofficial BMW videos on Youku, the most of any brand and testament to brand strength.

Kaixin: 622,640 followers.

Tencent Weibo: BMW has the largest brand following on Tencent Weibo, with more than 173,000 fans.

Jiepang: Fans checked in on Jiepang to the Bird’s Nest National Stadium in Beijing for a virtual badge and a chance to win tickets to the BMW 3 Series fashion concert.

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K E Y F I N D I N G S

Key Findings

Top Five Biggest Winners & Losers2010 VS. 2011 IQ PERCENTILE RANK

FEEBLE

FEEBLEGIFTED

GIFTED

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

Van Cleef & Arpels

Hour Lounge BBS available in Chinese receives minimal updates.

Vacheron Constantin

Audemars PiguetFEEBLE CHALLENGED

Launch of Chinese site launches brand from Feeble to Challenged.

BurberryCHALLENGED GENIUS

One of first in Fashion to launch e-commerce. Has extended social media prowess to Chinese platforms.

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 on nine social media sites globally including three in China. Developed mobile app for Ovi platform.

GIFTED

BenefitFEEBLE

Top-notch e-commerce and program launches on Youku, Tudou, Kaixin, and Sina Weibo propel this LVMH 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 isn’t enough to keep this iconic liquor brand in the Gifted ranks.

FEEBLE FEEBLE

Localized site and high participation BBS forum aren’t enough to hold their ground.

Wuliangye

FEEBLE

+67%-41%

+48%-43%

+44%-56%

+40%-67%

+37%-68%

CHALLENGED

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Key Findings Brand Site Sophistication

% OF SITES WITH THE FOLLOWING ATTRIBUTES:

(2010 vs. 2011)

K E Y F I N D I N G S

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-fifth now sell online. In

addition, 23 brands have added offline retail

locators. E-commerce continues to be directly

correlated with strong digital performance

across dimensions, and brands selling online

registered 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 percentage

of 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%

Feat

ure

Adop

tion

(%)

Locate RetailWithin China

Site Hostedin China

ChineseLanguage

33% 32%

E-CommerceEnabled

10%

20%

62%

85%

80%

88% = 2011

= 2010

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K E Y F I N D I N G S

Selling Is Knowing(continued from 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 customer’s bank online. More than

60 percent of brands provide payment option

through Alipay, a PayPal equivalent, popularized

by B2C e-commerce site Taobao. Nearly 60

percent of brands still accept cash on delivery.

Key Findings E-Commerce Payment Methods

% OF E-COMMERCE ENABLED SITES EMPLOYING THE FOLLOWING:

(August 2011)

0%

% o

f E-C

omm

erce

Ena

bled

Site

s

Credit CardAlipay Cash onDelivery

Online Banking

58%

32%

Other

21%

63%

79%

OTHER

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

K E Y F I N D I N G S

Missed Opportunities

Fifty-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, specific 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.

Key Findings

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

(August 2011)

42%

52%

68%

92%

92%

58%

48%

32%

8%

8%

European &U.S. StoreLocator

Wish List

PricesViewable in

RMB

UserReviews

ContentShareable onChinese SNS

100%

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0%

Baidu:Paid Search

Google:Chinese Brand

Name

Baidu:Brand Zone

Baidu:Chinese Brand

Name

22%18%

26% 25%

Google:Paid Search

13% 12%

67%71%

43%

31%29%

42%

30%

15%

K E Y F I N D I N G S

Google: A Distant Second

Google 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 Google’s 19 percent.6 This is a dramatic

shift from 2009, when Baidu controlled 58 per-

cent of the market versus Google’s 36 percent.

Prestige brands continue to struggle with

visibility on the local leader. Only 31 percent

of brand sites come up first 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 terms

on other Baidu platforms.

Brands are doing better on Google, however

optimizing for a search engine that has de-

creasing relevance is short-sighted.

Key Findings

Brand Name Search Results POSITION OF BRAND SITES IN ORGANIC 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. Analysys International,

“Seasonal Survey of China Internet Search Market in Q2, 2011”,

July 2011.

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K E Y F I N D I N G S

Key Findings

Pay to Play

Paid 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 Baidu’s algorithm and ensure visibil-

ity of their Chinese site. Despite being a proven

source of traffic, less than a quarter of the

brands are purchasing Baidu brandzones.

Without a presence on Baidu, brands are

virtually invisible in China. Baidu’s algorithm

is different than Google’s and requires a

dedicated strategy. In many ways, Baidu is

simpler 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 certificate, site may be omitted from search results.

Buy a Baidu Brandzone: Brandzones drive results. Brands report up to 30 percent of their traffic originating from a brandzone and have seen click through rates up to 75 percent.

Cut the Code: Baidu’s crawler is not very sophisticated and requires aggressive spoon-feeding. Streamlining code and adding alternative text improves visibility. As with Google, flash-heavy sites encumber the crawler.

Host Your Site in China: Baidu’s crawler is “impatient” and will skip sites experiencing even minor latency issues eliminating the chance to appear in organic search results.

Reap What You Sow: Baidu content is prioritized in the search results. Curating brand content on Baidu platforms Tieba (à la forums), Baike (à la Wikipedia), and Zhidao (à la Yahoo Questions) is “free” and can improve search results 10-20 percent if done right.

Backlinks Boost: Targeted efforts to acquire backlinks can significantly improve ROI and search visibility.

Six Simple Strategies for Successful SEO in China:

7. iResearch, “2010 Q4 China Search Engine

Market” January 2011.

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Empty Inbox

Email 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 to

email as a call to action. Seventy-five percent

of Chinese Internet users indicate willingness

to purchase after receiving an email, versus 51

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

Key Findings

% 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

MarketingEmail

Link toChinese

Social Media

Viewableon Mobile

100%

8. “2010 China Internet Market Annual Review

Report”, iResearch, April 18, 2011.

9. China Internet Network Information

Center (CNNIC) 2011, eDialogue 2010.

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Social Mania

Unlike 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 five 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 fighting a war

across several fronts and are present on six

and five 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 communities

on 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 the June

2011 L2 Prestige 100®: Facebook IQ registered

almost 600,000 likes.

Key Findings

0%

3-MonthTraffic Growth

Registered Users(in Millions)

KaixinYouku TencentWeibo

SinaWeibo

0%

14%

4%

13%

Douban

0%

9%

0%

22%

0%

57%

Tudou

0%

8%

Renren

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

116231 233200 50 191 124

1%

7%

Social Media Adoption% OF PRESTIGE BRANDS PRESENT ON CHINESE SOCIAL MEDIA PLATFORMS

(August 2011)

*June 2011

SinaWeibo

Renren KaixinTencentWeibo

25,986 50,501

133,275101,130

Facebook

588,902*

Average # of FollowersCHINESE PLATFORMS VS. FACEBOOK

(August 2011)= 2011

= 2010

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Wild About Weibo

Traffic to Sina Weibo is up more than 490

percent in the past three months, and prestige

brands can’t get enough of the microblogging

platform. Local jeweler IDo leads all brands on

Weibo on the heels of its “Irresistibly Appeal-

ing” campaign in which users could spin a daily

prize wheel on the platform to win diamonds.

Auto brands claim five 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 already

substantial base by 70 percent to more than

148,500 fans through its “Audi Driving Experi-

ence” promotion.

Key Findings

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

BenefitFollowers: 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

Moët & Chandon

Calvin Klein

Audi

Rémy 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

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KeyFindings

Top 15 Brands: Organic BuzzRELATIVE AGGREGATED ORGANIC MENTIONS ON SINA WEIBO & QZONE

& NUMBER OF VIDEOS ON YOUKU & TUDOU

(August 2011)

VolvoMoutai (Maotai)

Hermès Dior Prada Burberry Shiseido

Tiffany Porsche Gucci

BMW LamborghiniFerrariChanelAudi#1 #5#4#3#2

#6 #10#9#8#7

#11 #15#14#13#12

Watches& Jewelry

Automobiles

Champagne& Spirits

Fashion

Beauty

KEY

Page 34: L2 Prestige100 - China IQ 2011

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0%Mobile App

16%

60%

Mobile Site

2%

25%

TOTAL:51%

TOTAL:31%

TOTAL:25%

TOTAL:10%

19%

6%

14%

3%TOTAL:2%

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 Incompatible

Of 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 three—Lancôme,

L’Occitane, and Shanghai Tang—are commerce

enabled. Furthermore, only two brands, Aston

Martin and Dolce & Gabbana, have created

apps for Nokia’s Ovi platform.

Key Findings

= 2011

= 2010

= AVAILABLE IN CHINESE

10. China Internet Network Information

Center (CNNIC), July 2011.

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Flash of Genius

LAND ROVER: The Evoque Effect

Land Rover’s 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 the mini 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 page used to drive traffic to custom Sina event pages

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On Renren users answer quizzes around

the movie’s plot and characters for a chance to win prizes. The page also

included links to other social media properties

and a behind-the-scenes photo gallery

Flash of Genius

On Douban users write their own script or use an online tool to paint the city for a chance to win prizes ranging from model cars to notebooks and pens

A virtual drive-in movie theater on Tudou allows

users to view the movies, leave comments, create their own version of the

movie using an online editing tool, and paint

their own comic cells with an online toolThe Evoque Effect continued

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Flash of Genius

Lambos on Taobao

Taobao 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, Taobao’s

online chat functionality, to receive more

information about specific models and after-sales

customer service. The site is more buzz than

business, however. Although it attracted more

than 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.

Lamborghini’s Taobao sales stunt succeeds in gaining buzz and raising the brand profile

11. “E-Commerce in China: Patriarchic Benevolence”, Tom

Doctoroff, Huffington Post, August 14, 2011.

12. “Selling Lambo-rghini’s on Taobao.com”, Red Luxury,

May 26, 2011.

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Flash of Genius

Counteracting Counterfeiting

Counterfeiting 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 allows consumers to authenticate their product online

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Flash of Genius

Gucci Style

The 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 ratings—the most of any brand in the

study—and 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 app available in Chinese has the most ratings of any in the study

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Flash of Genius

Personal Appeal

Looking 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,

Diane’s account has garnered almost 154,000

fans, more than 34 times the number of fans

of the official DVF brand Sina Weibo account.

Diane von Furstenberg’s weibos are in English

and directly lifted from her Twitter account.

Her account also reposts DVF brand weibos

in Chinese.

Similarly, most of Bobbi Brown’s 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 monthly

series 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 Furstenberg’s personal Sina Weibo page

DVF’s Sina Weibo brand page

Bobbi Brown’s personal Sina

Weibo pageBobbi Brown’s Sina Weibo brand page

153,693

4,901

107,397

29,142

Followers on Sina Weibo as of August 2011

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Flash of Genius

IDo Does Sina Weibo

IDo 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, IDo’s

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 fulfilled.

Weibo was also used to drive online traffic

offline. 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 phone

number 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

IDo’s “Irresistibly Appealing” interactive campaign on Sina Weibo

Fans show off their bracelets on Sina Weibo

13. “Weibo Marketing Is ‘Irresistibly

Appealing’ to Luxury Brands”, Central

People’s Broadcasting Station of China,

August 22, 2011.

14. Ibid.

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Flash of Genius

Badges Before Bags

Luxury brands have taken to Chinese

Foursquare clone Jiepang to raise

brand awareness and drive online/offline

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 with event specific 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 three Beijing stores received a virtual badge and were entered into a drawing for the chance to win a VIP pass to the grand opening party for its Beijing Sparkle Roll Plaza store.

April 2011 126Users who checked in at any Chinese Swarovski boutique received a virtual badge. Swarovski provided location-based tips and activities to celebrate Spring.

June 2011 676Users who checked-in at the Louis Vuitton Art Cosmic Voyage exhibit at the National Museum of China and shared it via any of the Chinese social networks earned an LV virtual badge.

Burberry

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Flash of Genius

Joy Is BMW

The “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 site’s 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. BMW’s Tencent Weibo

following grew 736 percent to more than

135,000. The hashtag #BMW之悦的故事#

(#JoyOfBMWStories) generated 16,766 posts

and 3,671,131 mentions during the month

of July. The hashtag #BMW在创造什么#

(#WhatIsBMWCreating) generated 23,370 posts.

BMW’s Tencent Weibo page

“Joy Is BMW” microsite

Users share their stories to collect votes in order to win a BMW bicycle

“Joy Is BMW” Sina event page

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Flash of Genius

Estée Lauder’s interactive game on Renren

Estée Lauder’s Renren brand page

Estée Lauder’s Kaixin pageEstée Lauder’s

BBS, EL-Lady

ESTÉE LAUDER: Applauded on Social Media In July, Estée Lauder grew its Renren following

more than 50 percent (the most of any brand)

to more than 200,000. Its Renren page featured

an interactive game in which users were chal-

lenged to collect coins. Additional points could

be gained by sharing the game with friends.

The top scorers received a tube of the new

Idealist eye cream. More than 76,000 users

participated in the game, which linked to Estée

Lauder’s e-commerce site.

Estée Lauder’s BBS, EL-Lady, combines edito-

rial content, interactive games, videos, promo-

tions, product recommendations from featured

community members, and online shopping. All

BBS content is shareable to Kaixin, and select

content can be shared on other SNS platforms.

BBS members are encouraged to answer

each other’s makeup questions and give tips.

Interactive skin care surveys and online tests

provide customized product recommendations.

Estée Lauder has amassed more than 625,000

followers on Kaixin, a social platform whose

traffic is down 28 percent in the last three

months. The challenge for Estée Lauder will

be to migrate these fans to new platforms or

to its own branded BBS, EL-Lady. Thus far, the

brand’s Sina Weibo account has slightly more

than 45,500 fans.

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Flash of Genius

Made for China Despite the Chinese’ love of foreign brands,

a number of prestige brands have launched

sub-brands, product lines, or special editions

exclusively in China in effort to appeal to the local

consumer, increase brand awareness, and

build 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 dedicated

microsite and Sina Weibo account. The

membership-based microsite, infused with

street culture, promotes sponsored events, provides

drink recipes, and hosts a series of contests.

In the latest contest, users create a profile,

upload their picture, assume one of four hip

hop personas—rapper, breakdancer, beat

boxer or graffiti artist—to create a custom

video featuring their animated avatar or submit

a new idea with an accompanying photo. Site

members vote on the submissions with the top

five vote getters for each contest receiving a $250

watch. Voters are also eligible for a prize.

As of August 31, almost 900 people participated

in the video contest, and the top five contes-

tants had a combined 596,450 votes. Two

hundred-fifty people participated in the “New

Idea” contest, with the top five contestants

earning a total of 93,210 votes.

The microsite is sharable on Kaixin, Baidu Space, Renren, Qzone, and Sina Weibo

Site members create a profile and

animated avatars that others can vote on

Sina Weibo account promotes the contests and encourages voting

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Flash of Genius

Beijing Backdrop

Luxury brands have harnessed online video to

introduce themselves to the Chinese market

and announce to the world its importance.

Fall/Winter Collection Beijing Event Live Stream on PPTV

Beijing Hologram Fashion Show Live Stream

Lady Blue Shanghai

Fall 2011 Ad Campaign–Shanghai

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© L2 2011 L2ThinkTank.com 47

BiographiesSCOTT GALLOWAYClinical 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 Stern School of Business where he teaches brand strategy and digital marketing. Scott is also the founder of Firebrand Partners, an operational activist firm that has invested more than $1 billion in U.S. consumer and media companies. In 1997, he founded Red Envelope, an Internet-based con-sumer gift retailer (2007 revenues: $100 million). In 1992, Scott founded Prophet, a brand strategy consultancy that employs more than 120 professionals in the United States, Europe, and Asia. Scott was elected to the World Economic Forum’s “Global Leaders of Tomorrow,” which recognizes 100 individuals under age 40 “whose accomplishments have 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 Berkeley’s Haas School of Business. He received a B.A. from UCLA and an M.B.A from UC Berkeley.

DOUG GUTHRIEDean, GWSB

Doug has been an expert in Chinese economic reform for more than decade, a trusted adviser of both multinationals and local Chinese companies, and a student of China for some 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 Changing Nature of Guanxi. He is currently writing China’s Radical Transformation: Economic Reform, Global Integration, and Political Change in the World’s Largest Nation, which is an

in-depth look at how China’s government-driven form of capitalism has successfully overcome traditional theories of development and helped China become the economic and political juggernaut it is today. In addition to these major works, Doug has published more than 60 articles on China and has been an invited speaker on a number of occasions.

Doug is currently the Dean of the George Washington School of Business and has taught at NYU Stern, Harvard Business School, INSEAD, and the Graduate Schools of Business at Stanford University, Columbia University, and Emory University. He received his B.A. in Chinese literature from the University of Chicago and a Ph.D. in organizational sociology from the UC Berkeley.

MAUREEN MULLENL2

Maureen leads L2’s Research and Advisory Practice where she helped developed the Digital IQ Index®. She has bench-marked digital marketing, e-commerce, and social media efforts of more than 300 brands across Pharma, Auto, Luxury, Specialty Retail, Beauty, and the Public Sector. Mau-reen also has led digital strategy consulting engagements for a variety of Fortune 1000 clients. Before joining L2, Mau-reen was with Triage Consulting Group and led managed care payment review and payment benchmarking projects for hospitals, including UCLA Medical Center, UCSF, and HCA. Maureen has a B.A. in Human Biology from Stanford University and an M.B.A. from NYU Stern.

R. DANIELLE BAILEYL2

Danielle began her career at The Home Depot, Inc., where she led a variety of internal consulting engagements focused 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 competence of brands spanning the Specialty Retail, Public Sector, Pharma, Wine & Spirits, Travel, and Financial Services industries. Danielle has a B.S. in Systems Engineering from the 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 and marketing communications for aspirational and luxury brands. As creative director of L2, she leads the transla-tion of the L2 brand across all touchpoints, with a particular focus on the visual packaging of L2’s research. She began her career at Cosí, where she developed the brand and oversaw its evolution from concept through growth to 100 restaurants. Since then she has provided creative direction for a wide array of clients, including the launch of Kidville and CosmoGIRL! magazine. Christine received a B.A. in Economics 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 began her career in fashion, designing textiles and prints at Elie Tahari’s design studio in New York City. She then focused on the Elie Tahari brand aesthetic and consistency in design across its many developing disciplines. She went on to become the art director of a small, prestigious design firm in Chelsea, where she focused on event graphics, digital and print collateral, and brand aesthetics for companies both large and small. Jessica has a B.F.A. in Graphic Design and an A.A.S. in Illustration from Rochester Institute of Technology.

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© L2 2011 L2ThinkTank.com 48

BiographiesSAGE BRENNANChina Luxury Network

Sage is a longtime media and Internet analyst in China, most recently based in Shanghai. He has a broad range of marketing, consumer research, market entry, and financial analysis experience, as both an advisor and a manager of entrepreneurial companies in China. Sage is a founder and curator of the Shanghai chapter of MobileMonday and TEDxShanghai.

Most recently, Sage was research director of Hong Kong-based hedge fund Pacific Sun Investment Management and chief representative of the firm’s China operations, based in Shanghai. Before that, he was general manager of Shanghai-based Pacific Epoch, a boutique telecom and technology research firm later acquired by Pacific Crest Securities. He contributed the weekly “This Week in China” column to Dow Jones’ MarketWatch for two years, and re-mains a frequent commentator on China-related media and technology issues in print media and on programs such as CNBC’s 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 speaking and studying Mandarin since he first lived in Beijing in 1987.

RICHARD HSUBrand Translation Expert H+ Branding

Born in Shanghai, Richard studied architecture in the U.S., developing a career in retail, advertising, branding, and design across the U.S., Europe, Japan, and Asia. In 2003, Richard returned to China to lead the opening of Wieden+Kennedy’s China office in Shanghai. In 2006, he opened the brand consultancy firm [h+] in Shanghai, which focuses on China and China-related brands, talents,

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

EMMA LIL2

Emma has served as a research analyst in China and has worked on a number of engagements advising foreign companies on their China expansion strategies and market prospects. For two years, she supported the online publica-tion Jing Daily, conducting research and assessing trends in the Chinese luxury and contemporary art markets. Born and raised in China, Emma speaks Mandarin and Canton-ese. She received her Bachelor of Commerce degree from the University of Windsor and has a M.A. in Cross-Cultural Communication from New York University.

XI CHENL2

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

Additional thanks to Yvonne Du, Winnie Rui, and Flora Lan, who served as additional data collection resources 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.

RESEARCH

Digital IQ Index®: The definitive benchmark for online competence, Digital IQ Index® reports score

brands 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 to

future growth. Publications in 2011 will measure the performance of the Prestige 100® brand set in two

of the world’s largest “markets”, Facebook and China, as well as on Mobile platforms.

EVENTS

Forums: 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 case

studies. 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.

CONSULTING

Advisory 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.

MEMBERSHIP

For membership info and inquiries: [email protected]

UPCOMING 2011 EVENTS

10.14.11 L2 Clinic The Social Graph: China SHANGHAI

L2’s inaugural event in China will probe the underpinnings,

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

intensive executive session will enhance participants’ fluency in

brand-driven social media efforts on Chinese platforms.

11.10.11 L2 Forum Innovation 2011 NYC

Called the “TED for marketing,” L2’s 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 RESEARCH

PRESTIGE 100® Reports:

Mobile

DIGITAL IQ INDEX® Reports:

Beauty

Fashion & Leather Goods

Watches & Jewelry

Page 50: L2 Prestige100 - China IQ 2011

A THINK TANK for DIGITAL INNOVATION

51 East 12th Street, 2nd Floor

New York, NY 10003

W: L2ThinkTank.com

E: [email protected]