- Don-Alvin Adegeest |
Louis Vuitton is the top luxury brand in China according to the Gartner L2 Luxury China Index, which ranks digital IQ. Bulgari, Cartier, Gucci and Mont Blanc round out the top five luxury brands. Burberry is the only British brand to be ranked in the top 10, achieving a digital IQ of 121 for 9th place.
According to L2’s analysis, Chinese shoppers are still purchasing items such as high-end handbags and sneakers, despite the nation's economic slowdown and uncertain trade war with the US. L2 states Traditional luxury brands have maintained growth by adapting to Gen Z trends like streetwear and sneakers while leveraging new breed of Chinese brand ambassadors — particularly young pop idols — to promote their products online.
The strongest digital performance comes from Louis Vuitton, who’s number one ranking and high online buzz in China over its streetwear products and announcement of Kris Wu as its global brand ambassador has brought it the highest digital IQ score. In 2017 Louis Vuitton launched it’s Chinese e-commerce channel and last year utilized the streetwear “drop” model with a WeChat pop-up shop Mini Program for popular sneakers designed by Virgil Abloh.
The battle for China’s luxury consumer
As the world’s top luxury brands embrace e-commerce in China, the battle is still on to become the dominant space where Chinese consumers shop online for high- end products. Luxury brands still prefer control over their e-commerce experiences and customer relationships, with brand-owned WeChat stores and DTC remaining the most popular channels for selling online. In its latest investor presentation, for example, Kering stated its goal of taking “full control of client experience,” both online and offline, in the coming year, the French luxury in its investor presentation.
Despite some momentum in attracting luxury brands, e-tailers Tmall and JD.com still lag behind, prompting strategic alliances with luxury pure plays. Since traffic is key for e-commerce sales volume and search channels are pay-to-play, e-tailers may have an opening, as it is difficult to come by organic traffic to DTC channels. The opportunity to increase exposure to Chinese shoppers continues driving luxury brands slowly but surely onto e-commerce platforms. However, it remains to be seen whether the most exclusive flagship brands will ever get on board.
The Gartner L2 Digital IQ index helps brands understand how digital is impacting their industry, for more information visit www.l2inc.com.
Article source: Digital IQ Index Luxury China 2019 by Garner L2.