Between 2006 and 2015, the number of internet users in China has grown almost fivefold larger, from 137 to 667 million. Today, China is the country with the most netizens, more than the next two countries combined (India and the United States).

Baidu, China’s largest search engine and the equivalent of Google in the Western world, sees 2.1 million luxury related searches every day. Over the past 18 months, this interest in luxury brands in China has grown by 28%. Interestingly, the market slowdown that some luxury brands have experienced in China has not been reflected in Chinese consumers’ search for luxury brands online. In fact, quite the opposite.

In this context, Digital Luxury Group has partnered with Baidu to better understand what exactly is inspiring and motivating the Chinese luxury consumer to spend. Findings of the analysis were presented to an audience of luxury marketers at the recent Luxury Society Keynote event in Paris in October, the highlights of which are shared with Europa Star readers here.

HOW CHINESE INTEREST IN WATCHES COMPARES WITH FASHION & JEWELLERY

With a 38% increase since January 2014, ready-to-wear is the segment that has seen the highest rise in interest (over watches, jewellery and handbags). However, watches remain the most-searched luxury segment online and received the second strongest growth in interest over the past 18 months (+25%).

Interestingly, of all the searches made for watches, the vast majority are made on a mobile device. The share of searches made on mobile is even higher for watches than the luxury industry average: 70% for watches, and 61% for the luxury industry.

“Today 70% of all searches for luxury watches are made on a mobile device, which is higher than the luxury industry average.”

The mobile share has grown significantly over the past months due to improvements made to the Chinese infrastructure, which have made it easier for users to connect all around the country. This reinforces the importance of well-thoughtout mobile strategies. All too often however, luxury brands’ corporate websites do not meet the needs of the Chinese audience offering limited content, poor translation or slow loading time. With 7 out of 10 searches made from mobile, luxury brands should fully embrace mobile to deliver enhanced user experiences and truly convey their luxury identity online.

SEARCH ENGINE VISIBILITY

There are a number of differences between Google and Baidu for digital managers to take into consideration. The Baidu Brand Zone, for example, allows a brand to occupy the first half of the page when users search using any keyword related to the brand. Multimedia content can be enabled and call-to-actions can link back to different sections of a brand’s website or social media platforms. From observation, the Baidu Brand Zone can capture over 50% of the demand expressed online and is the best tool for brand protection.

In addition to Baidu Brand Zone, there are several Baidu properties that are trusted sources of information from a user’s point of view. For example, Baidu Baike (similar to Wikipedia) which is a Baidu property that yields strong authority on search results acts as an alternative to Western websites, which might not load fast enough or propose relevant content to Chinese netizens, to provide users with qualified brand information. In order to deliver a consistent message to consumers, luxury brands not only need to focus on their own communications channels, they also need to work with Baidu and leverage its relevant properties to capture demand expressed through online search. “In China, you cannot just repurpose your pay-per-click, Google-like approach. Your search engine strategy will require you take into account Baidu properties as well as its specific advertising formats,” explains Pablo Mauron, Managing Director of Digital Luxury Group in Shanghai.

BRANDED CONTENT

Chinese users rely heavily on the internet to look for information and inspiration. And while keywords directly associated with the brand remain important, the DLG-Baidu research shows that Baidu users also use non-branded keywords that yield top-ranking search results featuring the brand’s products, how to wear them, specialised websites and pictures of the items.

Luxury brands looking to leverage a strong content strategy should consider two important points: first, rankings are very popular in China as they comfort potential customers in their choices. Although they might not be legitimate (as any media or website can publish its own without a clear methodology), online rankings do have a significant influence. For this reason, some brands deploy new strategies to guarantee their visibility in these rankings.

Second, street snaps and mix & match visuals are commonly sought after by consumers searching online for inspiration. Specialised websites that give consumers recommendations on how to wear the products are extremely popular.

“Inspirational content is required to feed a sophisticated audience.”

Inspirational visual content is paramount to connect with a sophisticated audience and luxury brands are capitalising on it already. Louis Vuitton, for example, launched a campaign in which users searching for the Series 2 Exhibition are greeted with a large mosaic image. Furthermore, Louis Vuitton’s product content is displayed behind this image. Unlike with Google, where the results shown are more organic, in Baidu the brand has the ability to choose what results to display.

INFLUENCER MARKETING

As part of their quest for inspiration, Chinese consumers also look to influencers, or Key Opinion Leaders (KOLs) as they’re known in China, for style advice and inspiration. KOLs play a major role in defining consumer preferences, which is reflected in the number of related searches made online. Searches for Ma Rui, a Chinese TV and radio host, have increased eightfold in the past 18 months. Unlike Western bloggers, KOLs in China focus their influence via their social media communities, on platforms such as Weibo and WeChat.

Luxury brands that work with KOLs can achieve impressive results, like when German fashion brand MCM recently collaborated with South Korea’s K-pop band EXO.
EXO’s popularity in the China market helped to further generate visibility and awareness for the brand, which today is a fashionista favourite in major Chinese cities. In conclusion, China has emerged as the nation with the most internet users around the globe, yet the strategies adopted by Western luxury brands are all too often mere replications of the brands’ Western way of operating. An in-depth local understanding is needed to develop specific online strategies that cater to Chinese consumer preferences. Brands will need to master visibility on Baidu but also engage potential consumers with inspirational content shared via specialised websites and platforms, their own social media channels and KOLs if they want to trigger purchase consideration.

Source: Europa Star November 2015 Magazine Issue