A recent presentation to the French Chamber of Commerce on Luxury and Social Media in China. Apologies, but I needed to edit back on quite a few of the slides and videos.

1. Social Media and Luxury in China
French Chamber of Commerce and Industry
Hong Kong
Thomas Crampton
Asia-Pacific Director, Social@Ogilvy

2. AGENDA
• The China opportunity
• How to build a digital strategy in China
• Understand
• Localize
• Remain true
• Prevent
• Learn from Experience
• QA

3. The China opportunity is clear…

4. ..and growing quickly…
60%
of purchases come from
first-time customers
45%
of luxury consumers
in China are 35,
or younger
Sources: Bain Co 2011; CNNIC, 2011

5. …accounting for a large portion of revenue…
LVMH: +27% growth rate in Asia,
PPR: L’Asie-Pacifique hors Japon (32,0 % du chiffre d’affaires total) a
continué d’afficher un rythme de croissance élevé (+ 29,5 %), tiré
par une hausse de 39,1 % en Grande Chine.
Sources: Company Results

6. …but ripe for further growth.
Sources: L2 Luxury Report 2011

7. Most growth will come from lower-tier cities…
75% of China’s future wealth creation will take
place in smaller cities and towns. Local
customers will buy big-ticket items online.
Get there before someone else…
Sources: L2

8. …increasing the importance of engaging
with your customers digitally.

9. What is a good digital strategy for a luxury
brand in China?

10. How to build a luxury
digital strategy?

11. 85%
of Chinese luxury
consumers engage with
brands online
80%
use social media to
research luxury purchases
Sources: L2 Luxury Report 2011

12. Chinese consumers are
positively affected by
their online experience
with brands
69%
purchase or consider purchasing
products after looking for brands online
Sources: Global Web Index 2010

13. 1) Understand

14. And sometimes sales volume does not reflect
on popularity…
In China, LV bags are so
in bad taste that even
To be frank, there are too cleaning ladies own at
many LV fakes, which does least one.
not make me look good
even if I carry a real one.

15. Absence from the social space often brings:
Unwanted consequences + Confusion
Between Armani and Zegna,
which one is more suitable for an What’s the difference between
older person?
Armani and Zegna?
Need to ask? Zegna, for sure!
The difference is that Armani is a
Zegna, look, Berlusconi always real Italian brand, while Zegna is a
wears it. brand created by Wenzhounese and
sold as Italian.

16. A listening exercise first step to understand
and craft a digital strategy in China

17. 2) Localize

18. Chinese social
media are
dominated by
local players
Sources: Social@Ogilvy 2012

19. China’s top growing social media platform is
uniquely chinese
296%
Sina weibo user increase
in 2011 to 260m active
users
Sources: CNNIC 2012

20. 4 out of the 5 top e-Commerce sites are local
% of users who ever used the following sites for e-shopping
40
35
30
25
20
15
10
5
0
Taobao Suning Gome Joyo 360 Buy
Amazon
Sources: L2 Luxury Report 2011

21. Chinese consumers use the web in a totally
unique way
87.1%
of online content about fashion brands is
around “shai” (showing off)
Sources: CIC 2011

22. Brands that have localized their content for the
Chinese market have been most successful
Smart group buying on
Taobao: 305 cars sold
in 89 minutes

23. Brands that have localized their content for the
Chinese market have been most successful
Lamborghini’s
million dollar car
on Taobao

24. Brands that have localized their content for the
Chinese market have been most successful
Bobby Brown:
how to become a
beauty guru in China
through social media

25. 3) Remain yourself

26. 56% of Chinese luxury
purchases are made abroad, but
only58% Chinese websites
of international brands have U.S.
or European store locator
Sources: L2 Luxury Report 2011

27. 84% of Chinese consumers think country
provenance is a decisive factor for purchasing
Sources: China Luxury Forecast 2010

28. And France is the most appreciated countries
by Chinese consumers
6% 10%
18%
58%
58% 28%
of Chinese consumers are
positively influenced by the
35%
label “Made in France”
50%
Sources: China Luxury Forecast 2010

29. Localizing does not mean losing your brand
essence – it means enhancing it!
In 2011, Hennessy launches
Classivm, a cognac specially catered
to the Chinese market

30. With an unemotional digital strategy moving away from Hennessy’s classic look and stress on
heritage, Classivm did not break through on the Chinese online space.
0 comments
on Classivm’s Renren page
after 6 months

31. JW Vdie

32. 4) Prevent

33. Don’t underestimate the power of social
media public opinion

34. Carrefour vs McDonald’s
The importance of having a strong brand on Chinese social media
On March 15 (Chinese Consumer’s Day),
CCTV exposed alleged safety scandals
about Carrefour and McDonald’s. Both
brands responded officially to the
accusations on their official website and
social media pages within an hour.
But the reaction was very different.

35. Carrefour vs McDonald’s
The importance of having a strong brand on Chinese social media
McDonald’s received 7,660 reposts to their With barely 391 reposts, Carrefour’s story
official message on Sina Weibo, with most got buried beneath negative buzz, and
netizens showing support for the brand added to the large pool of negative
rather than for CCTV.
sentiment towards the brand in China.
Thanks to a strong online communication
strategy, McDonald’s brand has become
stronger than CCTV’.

36. Inform netizens without creating crisis
New Conversations
Page Views
120
40,000
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37. Inform netizens without creating crisis
New Conversations
Page Views
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40,000
35,000
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30,000
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15,000
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38. Real conversations improve crisis response
Both positive and negative feedback is crucial during
online crises.
I am confused: where should I
find the official statement?
Unlike offline crises, we can monitor the public’s
reaction to the crisis management strategy in real time.
This allows us to continuously tweak and improve our
strategies to better address the issue and better
protect our clients’ brand.
I think I will still buy one. It’s a good
product and they showed good will
during this crisis
Conversation samples about Brand X’s online crisis on Chinese forum platforms

39. Key Crisis Characteristics in the Microblog Era
Traditional Crises
Crises in the Weibo Era
Speed Spreads in hours, days, weeks
Spreads in seconds and minutes
Channel Reported by print, broadcast and TV media
Crises often erupt on microblogs and amplifies interactively in new and traditional media
Key Opinion Leaders (KOL) play an important role in pushing for change, while crisis
Traditional media plays a hugely important role in disseminating stakeholders (victims, netizens, brands, media) exacerbate the crisis from multiple angles and
Role information, pushing for change and demanding answers
channels. Ordinary netizens and online influencers who sympathize with the victims help to
spread the message further and faster.
Form Monotonous print, photos or TV coverage
Vivid and multiple forms such as spoofs, videos, cartoons, and re-enactments
Personal and emotionally charged expressions have become an important driver in the
Tone Relatively neutral, objective, unbiased
spread of a crisis
Feedback Difficult and slow to collect feedback
Rapid fire feedback; an inappropriate response may easily trigger a second crisis, or aftershock
39

40. Knowing LOCAL, Understanding GLOBAL
UNDERSTAND + UNDERSTAND
YOUR
+ UNDERSTAND
THE ROLE OF
BUILD AN
STRATEGY
YOUR BUSINESS
CUSTOMERS
DIGITAL
ACTIONABLE
Listen
Plan
Execute
Optimise
4
0

41. 5) Learn from experience

42. The Simple 3-Step Program
Step 1: Look at search volumes and conversations about your brand.
If either is significant, you need a localized approach.
Step 2: Think strategically about digital marketing. Use data and
insights about your customers from your website and online
conversations
Step 3: Begin participation.
Think holistically
an integrated approach works better.

43. Beyond e-commerce an integrated digital
strategy helps
1. Capitalize on fast-growing markets
2. Monetize existing demand
3. Complement the store presence
4. Open new markets

44. Who we are

45. We are the largest
digital agency in Asia
19 countries
26 offices
3 000 digital experts

46. Ogilvy Social Media Awards in Asia-Pacific
Aiming to beat our own record as the region’s most awarded social media team
Wommy (GLOBAL)
Digital Media Awards (APAC)
• 2011: Momentum Awards – Bronze
• 2011: Best Use of Social Media – Bronze
Digital PR Awards (2011)
Click Awards
• Best Online Community – Won
• 2010: Integrated Marketing
• Best Digital Marketing Campaign – Honorable Mention
• Best Social Network Campaign – Honorable Mention
WPPed Cream Awards
• 2010: Best Consumer Marketing
Sabre Awards
• 2011: Global Digital/Social Consultancy of the Year
ITSMA Marketing Excellence Awards
• 2010: Most Effective Public Relations (Diamond)
Marketing Magazine
• 2011: Best Use of Media – Integrated
IBM Global Best Practice Awards
• 2011: Excellence in Creativity and Execution in Social Media,
The Holmes Report
Innovate India 2011
• 2011: APAC Digital Consultancy of the Year
• 2010: Best CFO Case Study (Silver)
• 2010: Best Impact in Regional Activity Using Social Media
Asia Pacific PR Awards
(Bronze)
• 2010: Best Use of Digital x 3
• 2010: Values Award
• 2009: Best Use of Digital
Atticus Awards
Asia Marketing Effectiveness Awards
• 2010 Best Digital Influence Essay
• 2010: Most Effective Public Relations

47. Grazie!

48. CONTACT
Thomas Crampton
APAC Director | Social Media | Hong Kong
EMAIL
thomas.crampton@ogilvy.com
BLOG
http://thomascrampton.com