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Social Media Engagement in China: Top 20 Luxury Brands

A new annual report from the L2ThinkTank has been released today, giving insights into which big-name luxury brands are best engaging with Chinese consumers in 2011. The researchers dub it a “China IQ” – a measure of a company’s effectiveness on the web and social media among China’s growing middle-classes.

The report’s authors stress that “success in the world’s fastest-growing prestige market is inextricably linked to digital competence.” They’ve identified a list of top 100 companies in this regard, but we’ll boil it down to 20 top web and social media engagers.

Before we identify those brands, how big is the luxury market in China? Looking at the above graph, we see a realistic, “addressable” market amongst the world’s populace who have an income of over US$30,000. China, pictured in red, is the only region that’ll experience exponential forecasted growth from now to 2025. Europe still has potential, as eastern European areas develop and its own middle classes emerge. The US, however, looks stagnant. These figures point to how crucial it is for a brand – especially in the luxury sector – to follow the new money to China and other parts of Asia. Top 20 “China IQ” List For 2011

And the winner is… Audi. The German carmaker has already been a hit in terms of sales in China, and now they’re getting better at digital engagement as well. The report praises the way that Audi “maintains presence on six different social media sites in addition to its own OurAudi.com.” The lead image shows Audi’s official Sina Weibo page. Now if only Audi drivers can raise their own IQ and stop driving like asses…

Second is Burberry, the British fashion label that we’ve seen working with check-in service Jiepang, and launching a new brand channel on Youku. BMW is in third place, and rounds out the three companies that are labelled as “genius”-level in terms of digital engagement in China.

The Swedish – oh, wait, I mean Chinese – automaker Volvo had a good social media year with a Sina Weibo-based campaign in which Weibo users could design the plot of its next TV ad.

Going Up, Going Down…

Some brands had a good year, upgrading their status from “feeble” – such as the cosmetics company Benefit which made better use of Youku, Weibo, and Kaixin to promote its products. Likewise, Dolce and Gabbana raised their game this year, with a wider social media presence and even a new app for Nokia phones available in the Ovi app store. A lot of brands seemingly forgot to update their social sites in China this year, such as Scoth whisky maker Chivas Regal. The report’s authors lament that its Douban page has barely been touched since 2010.

Getting Your Brand on Baidu, Not Google

A lot of brands seem to be having issues optimizing their online presence for Baidu, which is China’s dominant search engine, with about three-quarters of the market share. So, it’s not much use being well indexed on Google if you’ve not made your brand-name highly visible on Baidu. On the plus side, luxury companies are doing a better job of using Baidu’s paid search services, such as “brand zone.” This year, paid searches account for 31 percent of all online ad spending in China.

Shopping Overseas

Astonishingly, “fifty-six percent of Chinese luxury purchases are made abroad.” That’s because China’s middle-classes travel a lot these days, and they know that China’s excessive import taxes make things a lot cheaper overseas. Hong Kong, with its zero VAT, is especially popular. For fashion items, many like to go to the source, in France or Italy, where a strong RMB makes the price tags even more desirable. Despite all this, not many brands are clued up. 42 percent of companies lack an overseas store locator function on their Chinese sites, and a huge 68 percent don’t provide website settings for prices to be viewable in RMB.

Genius Ideas

Lastly, the report has a “flashes of genius” section to highlight how some brands have found some brilliant ways to engage and promote in China. One of which is Lamborghini’s official TMall store, which we reported on back in May of this year. Another is the Chinese rice wine brand Wuliangye, which set up a good-looking site (pictured above) to help combat counterfeiting of its spirits. It comes replete with an authentication section to check that your bottle is genuine baijiu, and not paraffin or something (though I don’t think I could tell the difference, even by taste).

Readers can follow two of the report’s authors on Twitter: @sagebrennan, and @maureen_mullen.

[Report: L2 Think Tank (see/download the full report), in conjunction with the George Washington University School of Business]