More Luxury Brands See Youku As China Marketing Tool

    Many of the luxury brands that depend on the increasingly lucrative China market have been quick to experiment with digital marketing via popular "clones", adaptations of websites and services that are blocked in mainland China.
    Jing DailyAuthor
      Published   in Technology

    Louis Vuitton, Dior, Burberry, Gucci, Omega And Cartier Among Brands Marketing Through Video Platform#

    Burberry's official Youku page

    Earlier this year, Jing Daily suggested that Beijing's luxury advertising ban, which cracked down on outdoor advertisements that "promote hedonism, lavishness and the worship of foreign things”, would lead to a greater digital marketing push by high-end brands. As we pointed out, an increasing number of labels have either launched Chinese-language websites or full-featured online shopping functionality in recent months, hoping to tap China's fast-growing e-commerce market, and some of the brands that depend on the increasingly lucrative China market have been quick to experiment with digital marketing via popular "clones", adaptations of websites and services that are blocked in mainland China.

    This digital push has been perhaps most visible among brands like Louis Vuitton and Burberry, which were (relatively) early adopters of Sina Weibo, the Chinese equivalent of Twitter, and the popularity of their Weibo accounts has seen labels like Chanel, Gucci and DVF jump on the bandwagon in rapid succession within the last several months. Again leading the pack, LV and Burberry are among the first brands to link up this year with Jiepang, the Chinese equivalent of the location-based service FourSquare, offering branded "virtual badges" for users who "checked in" at boutiques and putting users in the running to win tickets to store launches and other events. Now, turning more to the visual side of marketing, we're seeing more luxury brands boost their presence on Youku, the Chinese adaptation of Youtube. According to a company release, Since this February, seven major brands have launched exclusive video channels on Youku, joining other labels like Dior, Gucci and Omega.

    Interestingly enough, Louis Vuitton was one of the first brands to experiment with Youku, launching video ads in 2009 and a full branded channel in 2010. Within the last year, possibly emboldened by the views LV's videos were getting, other brands like Guerlain, Cartier and Longines launched their own channels, and in the first half of this year, Burberry streamed a live webcast of its Milan Fashion Show on Youku, helping its official channel reach over one million views.

    As the Youku release suggests, digital marketing in China is perhaps more important than in more mature markets because China's luxury consumers tend to be far younger than their Western or Japanese counterparts. The "overlap" in the luxury consumer base and the user demographics of video sites like Youku, which are similarly youthful, means they're a marketing tool that's difficult to ignore. As Youku SVP, Frank Ming Wei, added, increasing their presence on video sites like Youku is a good strategy for luxury brands to reach consumers in more far-flung interior regions. Said Wei, "Our nationwide reach is helping these brands make inroads into second- and third-tier cities where they had previously not had strong footholds."

    Jiepang's LV virtual badge

    The growing digital presence of luxury brands in China is an interesting development, and in some ways we can view Louis Vuitton as something of a bellwether in this space. The curious question, however, is whether these efforts are actually paying off in terms of sales. While LV's tie-up with Jiepang was by most accounts a success, this success was partly due to the fact that many Jiepang users simply wanted to display the free virtual LV badge on their profiles. This, of course, is something of a marketing success but if it doesn't influence actual sales, it's essentially a fun little gimmick. That said, it's a very important space to watch, and if brands start to use Jiepang or other services to offer special promotions, we could theoretically see a significant sales bump.

    Now, as more brands launch exclusive channels on video sites like Youku and go beyond simply posting in-video advertisements, we still have several questions: How will brands best use this platform to actually entice viewers to buy? Youku users may be young, but are they the correct economic demographic? Are China's wealthy young luxury consumers actually influenced by this type of online marketing, or are their purchases driven by their peers?

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