Study Conducted by GW School of Business and L2 Reveals that Audi, Burberry and BMW Lead China’s Prestige Brands in Social Media, Online Strategy

Second Annual Prestige 100®: China IQ Index Ranks the Digital Footprint of 100 Prestige Brands in China

FOR IMMEDIATE RELEASE
September 13, 2011

WASHINGTON – Audi took the top spot in the second annual L2 Prestige 100®: China IQ index, which measures the digital competence of 100 prestige brands in China, the world’s fastest growing luxury market. This study was developed by NYU-Stern Professor Scott Galloway and a team of experts from L2, a think tank for digital innovation and Doug Guthrie, dean of GW’s School of Business and China scholar. The brands included in the study were scored on more than 300 data points across four dimensions — site, digital marketing, social media and mobile. To download the complete rankings and key findings, visit this link.

“In today’s global economy, China is the driver of so much growth” said Dean Guthrie. For many companies, if you get your China strategy right, you are probably going to be okay. However, the Chinese market is still tremendously misunderstood; and the digital landscape in China even more so. L2 Think Tank is a radical innovator in the area of research of digital research and marketing. GWSB’s partnership with Scott and his team give us a real opportunity to put forward knowledge about China that is simply not out there.”

Sixty-eight percent of the brands in the study were classified as “challenged” or “feeble.” Only three, Audi, Burberry and BMW, earned “genius” distinction, suggesting that digital efforts in China are nascent. However, there is evidence the market is moving quickly. The number of brands selling online doubled from 2010 to 2011, while brand participation on Chinese social media platforms increased from less than 5 percent to 66 percent of brands.

“The prestige market globally is predicted to grow at a rate 2.2x GDP, most of it powered by one market – China” said Professor Galloway. “The online medium presents a tremendous opportunity to reach a Chinese consumer who is younger, digitally native and obsessed with luxury.”

Top Ranked Brands in the Study:

1. Audi
2. Burberry
3. BMW
4. Volvo
5. Benefit Cosmetics
6. Cadillac (tied)
6. Estée Lauder (tied)
8. Land Rover (tied)
8. Mercedes-Benz (tied)
10. Porsche

Key findings include:

Selling is Knowing: Twenty brand sites are e-commerce enabled, twice the number from 2010. Brands selling online have an average digital IQ 16 points higher than those without online sales. With 11 out of 15 brands selling online, beauty and skincare brands continue to have the highest e-commerce penetration. However, the fashion category had the largest change from 2010 – increasing from 7 percent to 24 percent.

Digital Disparity: Although 56 percent of Chinese luxury purchases are made abroad, only 58 percent of brands provide U.S. and European store locators, a large missed opportunity. The majority of sites fail to list pricing in Chinese currency, provide user reviews or integrate Chinese social media.

Wild About Weibo: In the highly fragmented Chinese social landscape, Sina Weibo, a Chinese microblogging site, is the platform of choice. Fifty-seven percent of prestige brands maintain a presence on this platform launched in April 2010.

Buried on Baidu: With 76 percent of the Chinese search market, local search engine Baidu has continued to gain share at Google’s expense. However, visibility on Baidu has declined since April 2010 with 42 percent of prestige brand sites failing to be returned in the top three search results for a Chinese brand name search, up from 29 percent.

Mobile Incompatibility: Two-thirds of China’s 485 million Internet users access the web via their phone, yet only 25 percent of brands (up from 2 percent in 2010) maintain a mobile optimized site. While 60 percent of Prestige 100® brands have an app in the Chinese iTunes store (up from 16 percent in 2010), only two-thirds of these apps are available in Chinese.

On October 14, L2 will host the Social Graph: China Clinic in Shanghai, a series of intensive workshops highlighting best practices and findings from the study.

About L2
L2 is a think tank for digital innovation. Founded by NYU Stern professor of marketing Scott Galloway, L2 helps prestige brands navigate the digital marketing landscape through events, research and advisory services. L2 Digital IQ Index® and Prestige 100® studies measure brands digital efforts on some of the fastest growing platforms and are published annually across industries including fashion, beauty and skincare, automobiles, watches and jewelry and spirits and champagne.

For more information, visit: www.l2thinktank.com or to speak with L2’s Scott Galloway, please contact him at scott@stern.nyu.edu.

About GWSB
The George Washington School of Business prepares students for professional management careers. The depth and variety of its academic and professional programs, including five specialized master’s programs, provide rich opportunities for students in the school’s core bachelor of business administration, master of business administration and doctoral programs. GW’s undergraduate- and graduate-level international business programs rank among the worlds best.

To speak with GW’s Dean Guthrie, please contact Jill Sankey at 202-994-6466; jpsankey@gwu.edu.

-GW-

Posted by GWSB on September 13, 2011 | Filed under: Press Releases.