EXCERPT from the Digital IQ Index®: Middle East | Prestige
To access the full report, contact membership@L2ThinkTank.com

...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
To access the full report, contact membership@L2ThinkTank.com

...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
Digital IQ Index®:

Middle East | Prestige

To access the full ...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
To access the full report, contact membership@L2ThinkTank.com

...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
Digital IQ Index®:

Middle East | Prestige

To access the full ...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
Digital IQ Index®:

Middle East | Prestige

To access the full ...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
To access the full report, contact membership@L2ThinkTank.com

...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
To access the full report, contact membership@L2ThinkTank.com

...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
Digital IQ Index®:

Middle East | Prestige

To access the full ...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
Digital IQ Index®:

Middle East | Prestige

To access the full ...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
Digital IQ Index®:

Middle East | Prestige

To access the full ...
EXCERPT from the Digital IQ Index®: Middle East | Prestige
Digital IQ Index®:

Middle East | Prestige

To access the full ...
© L 2 2013 L 2 ThinkTank.com Reproductions Prohibited
This report is the property of L2 Think Tank. No copyrighted materia...
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  1. 1. EXCERPT from the Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com October 17, 2013 SCOTT GALLOWAY NYU Stern Middle East | Prestige © L2 2013 L2ThinkTank.com
  2. 2. EXCERPT from the Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com Digital IQ Index®: Middle East | Prestige October 17, 2013 Overlooked? The Arabian Peninsula, including the United Arab Emirates, Saudi Arabia, Kuwait, Qatar, and Bahrain, represent an $8.5 billion market for luxury goods.1 Middle East ≥ Dubai ≥ Dubai Mall The Middle East luxury market is approximately the same size as Russia’s luxury market—eighth Concentration of Middle East Luxury Goods Market FY2012 (in USD billions) largest in the world. The market is concentrated. The United Arab Emirates (UAE) represents 2 40 percent, and the majority of luxury sales in the UAE are traced to Dubai, nearly a third of the region’s total.3 The Dubai Mall accounts for half of the luxury purchases in the city-state.4 43% Critical Mass? At first glance, the Middle East appears immune to the digital contagion spreading through 26% $8.54B emerging markets. Digital ad spending in the region is $1 billion and, despite strong growth, $3.66B will reach only 13 percent of media spend in 2016 (half the global average).5 13% $2.20B $1.10B Although the Internet audience is comparatively small (90 million users, 4 percent of worldwide total), per capita penetration is high in the five countries examined.6 Saudi Arabia Middle East UAE Dubai Dubai Mall has reached the 50 percent inflection point, while Bahrain, Kuwait, Qatar, and the UAE have breached 70 percent—over indexing versus the region (40 percent) and world (34 percent). Source: Bain & Company | Fondazione Altagamma In the UAE, the pillars of online retail are forming: •  16 percent of Internet users shop online •  73 percent of Internet users engage in social media •  61 percent smartphone penetration •  50 percent of shoppers visit a store’s website in advance of an outlet visit.7 As consumers wait for retailers with established market presence to shift from an offline mentality to active online experimentation, first movers are filling the void. In March, Tejuri.com launched, becoming the region’s first e-shopping mall.8 © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 1. “Worldwide Luxury Markets Monitor,” Bain & Company, May 16, 2013. 2. Euromonitor International, Passport Dashboard: Luxury Goods, FY12. 3. “Dubai booms again on back of the Arab Spring,” Chris Arsenault, Al Jazeera, June 1, 2013. 4. “Dubai accounts for one-third of luxury shopping in Middle East,” Cleofe Maceda, gulfnews.com, July 11, 2013. 5. “Worldwide Ad Spending Forecast: Emerging Markets, Mobile Provide Opportunities for Growth,” Alison McCarthy, eMarketer, January 2013. 6. “Middle East Internet Users, Population, and Facebook Statistics,” Internet World Stats, June 2012. 7. “UAE online retail market on course for $1bn barrier,” Gillian Duncan, The National, September 9, 2013. 8. “Region’s first e-shopping mall launches in UAE,” Stephen McBridge, ITP, March 4, 2013. 2
  3. 3. EXCERPT from the Digital IQ Index®: Middle East | Prestige Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com Destination October 17, 2013 Middle East Media Spend & Growth by Channel After a long winter of economic crisis, the hospitality industry has resumed aggressive 2012 vs 2016E (in USD millions) expansion as rooms still command a higher RevPAR than the United States and APAC.9,10,11 Mobile Starwood Hotels & Resorts Worldwide plans to open 50 new properties across the Middle East and Africa over the next five years. Abu Dhabi will become the first city to boast two Total Digital $21,975 $17,158 St. Regis properties. Hilton Worldwide has a Waldorf Astoria planned for Doha (Qatar) and a convention center to open later this year.12 The activity reflects a targeted investment. With tourism down 5 percent last year due to political turmoil, regions perceived as less volatile benefit.13,14 Dubai’s 9.9 million overnight visitors in 2013 made it the seventh most trafficked global destination.15 A contender for the $2,923 World Expo 2020, Dubai could challenge the current number one destination (Bangkok).16 $871 Robust digital investment by hotel brands is evident—four of the top five and nine out of $7 the top twenty brands in L2’s Middle East ranking are hotels. $58 2012 Digital IQ = Shareholder Value 2016 Source: eMarketer This study attempts to quantify the digital competence of
81 global and 13 local prestige brands. Our
aim is to provide a robust tool to diagnose digital strengths and weaknesses and help brands achieve greater return on incremental investment. Similar to the medium we are assessing, our methodology is dynamic and we hope you reach out with comments that Revenue Per Available Room (RevPAR) Reported by Region 2009–2013 (in USD) improve our methodology and findings. 2009 2010 2011 2012 SCOTT GALLOWAY Professor of Marketing, NYU Stern Founder, L2 2013 YTD Average $126.13 scott@stern.nyu.edu Average Average $85.99 $83.27 Average $60.55 9. “Occupancy in the Middle East And Africa Region Up 4.0% June 2013,” Hotel News Resource, July 24, 2013. 10. “Hotel Occupancy in the Americas Region Up 2.3% to 69.3% August 2013,” Hotel News Resource, September 20, 2013. 11. “Occupancy in the Asia Pacific Region Up 3.0% to 71.8% August 2013,” Hotel News Resource, September 20, 2013. 12. “Why the Middle East is the new luxury travel destination,” Erin Shea, Luxury Daily, March 20, 2013. 13. “Middle East sees 13% rise in inbound tourists,” Sarah Algethami, gulfnews.com, August 26, 2013. 14. “Tourists Wary of Turmoil in the Middle East Are a Boon to Southern Europe,” Raphael Minder, The New York Times, September 1, 2013. 15. “Mastercard Global Destination Cities Index,” MasterCard Worldwide Insights, 2Q 2013. 16. “Dubai could be world’s no 1 for tourists by 2020,” Daniel Shane, Arabian Business, May 29, 2013. Asia Pacific Americas Europe Middle East Source: STR Global © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 3
  4. 4. EXCERPT from the Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com Digital IQ Index®: Middle East | Prestige October 17, 2013 Digital High Net Worth Proportion of Millionaire Households Global Ranking and Percentage: Kuwait #1 Qatar 14.3% Bahrain Qatar Saudi Arabia #3 Kuwait 11.5% #6 Bahrain 4.9% Estimated number of Internet users, 2013: 90 Million projected to reach 413 Million by 2015 #8 UAE 4.0% UAE Middle East Spotlight 94% Male 6% Female Liquid assets $46 UAE Kuwait Qatar Bahrain 27.1M 8.3M 3.3M 1.8M 1.2M million million 41,755,070 1990 55% Self Made Saudi Arabia 60% online presence forecast to grow to $15 Billion by 2015 53% of shoppers older than 26 shop online 43% of consumers in the GCC make online purchases at least once per month 31% Inheritance/Self Made 14% Inheritance Billion in 2012 Billion in 2015 M-commece forecasted to grow to $4.9 Source of Wealth: 2010 Qatar 61% B2C E-commerce sales were $9 Most likely to represent the Finance & Banking sector or an Industrial Conglomerate not an Oil Baron Gulf Coast Population Total 61% growth Kuwait 62% Only 15% of businesses have an Population: Saudi Arabia UAE 71% Average net worth $151 Demographics Bahrain 77% Average Middle Eastern ultra high net worth individual is Married Median Age 56 years Internet Penetration by Country: Only 32% of women in the Arab world shop online Median Age: E-commerce Saudi Arabia Bahrain Kuwait UAE Qatar Male 27.0 32.8 30.0 32.0 33.4 Female 24.8 28.6 26.6 25.0 28.0 47% Prepaid Cards 30% Credit Cards 30% Bank Transfer GDP Per Capita: E-commerce sites in the Middle East selling physical goods report that the payment method for 70–80% of orders is Cash on Delivery Sources of E-commerce payment: 28% Cash on Delivery Importance of Platform for Information: 27% PayPal Qatar E-commerce Users by Age Bracket: Saudi Arabia Bahrain Kuwait UAE Qatar $19,890 $23,410 $46,461 $66,626 $97,967 <16 31% 16–25 41% 26–35 52% 35+ 53% Bahrain Saudi Arabia UAE TV 58% 84% 92% 87% Internet 72% 85% 78% 82% Newspapers 48% 73% 65% 72% Source: BCG, IMF, Nations Online, Mintel Global Luxury, Go-Gulf, Majalla, Wamda, Northwestern University, Wealth-X Research © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 4
  5. 5. EXCERPT from the Digital IQ Index®: Middle East | Prestige Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com October 17, 2013 About the Ranking The Methodology 30% Site 30% Digital Marketing 20% Mobile 20% Social Media Effectiveness of Brand Site Search, Display, and Email Marketing Efforts Language & Local Content Technology Store Locator & Account Search, Navigation, & Product E-commerce Category Specific Functionality Search: Traffic, SEM, SEO, Web Authority
 Compatibility, Optimization, and Marketing on Smartphones, and Tablets Brand Presence, Community Size, Content, and Engagement Mobile Site: Compatibility, Functionality, Load Time Facebook: Likes, Growth, Tabs & Applications, Responsiveness, Engagement Innovation & Brand Buzz: Multichannel Brand Initiatives, Local Network Brand Mentions Email Marketing: Frequency, Content, Promotion, Language & Regional Presence, Trigger Emails Mobile Applications: iOS & Android (Phone & Tablet) Presence, Popularity, Functionality Twitter: Followers, Growth, Frequency, Programming YouTube: Views, Number of Uploads, Subscriber Growth, Viral Videos, YouTube Search Visibility Emerging Social Media: Pinterest, Instagram, Google+ © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 5
  6. 6. EXCERPT from the Digital IQ Index®: Middle East | Prestige Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com October 17, 2013 Brand List in Alphabetical Order BEAUTY 18 WATCHES & JEWELRY 22 HOSPITALITY 14 RETAIL 5 FASHION 35 - Local Brands © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 6
  7. 7. EXCERPT from the Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com Digital IQ Index®: Middle East | Prestige October 17, 2013 Digital IQ Ranking RANK BRAND 1 RANK Four Seasons Hotels 9 T Accor 12 Meydan City Corporation Landmark Group 12 Marks and Spencer T 19 T Fairmont Raffles Hotels International 7 Proctor & Gamble 17 L’OCCITANE Group 6 T InterContinental Hotels Group 11 5 Chalhoub Group 17 Rotana Hotel Management Corporation 4 Damas International Burberry Group 10 T BRAND 16 Starwood Hotels & Resorts Worldwide 2 RANK 15 8 Hilton Worldwide 2 BRAND Mouawad Jewelry 20 T Gucci Group Chanel 14 Jumeirah International L’Oréal Group © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 7
  8. 8. EXCERPT from the Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com Digital IQ Index®: Middle East | Prestige October 17, 2013 Key Findings Site Middle East Site Configuration Site Localization & E-Commerce September 2013, n=94 Only 37 percent of global sites actively cater to the Global Brands Middle East market, and just over half (57 percent) serve the region through a local domain. Only four brands— Alexander McQueen, Jimmy Choo, Michael Kors, and Bloomingdale’s—ship to the region from their global sites. Local Brands Brands in Index Global 81 Local 13 Among the Gulf Cooperation Council (GCC) countries, 43 percent of Internet users make an online purchase at least once a month.17 However, only one-third of prestige brand sites are E-commerce enabled in the region—and of Site Catering to Region Yes 30 No 51 those, three-quarters are hotel brands. Only three non-hotel brands—Bottega Veneta, Burberry, and Gucci—are selling online in the region. Local brands are also behind the curve. Only two hotel brands—Rotana and Meydan—and two retail Configuration .ae or 17 equivalent /ar 13 brands—Splash Fashions and Damas Les Exclusives—are E-commerce enabled. Sixty-two percent of local sites lack Shipping Internationally to Middle East Arabic content. Cash on delivery is the payment method for 70 percent 4 of online purchases of physical goods. However, no global 18 Shipping from Global Site brands offer this option and only one local brand measured in the Index—Splash Fashions—provides COD. Wire transfer, a common payment form in the region, is only available on the Middle East Site Language Capability Gucci AE and Damas Les Exclusives sites. September 2013 Global Brands, n=30 67% 38% Complete Arabic Local Brands, n=13 7% 0% Partial Arabic 27% 62% No Arabic 17. “The Next, Next Thing,” Jon Weinberg, The Majalla, September 2, 2011. 18. “E-Commerce in the Middle East grew 300% in the past year,” Nancy Messieh, The Next Web, June 3, 2012. © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 8
  9. 9. EXCERPT from the Digital IQ Index®: Middle East | Prestige Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com October 17, 2013 Key Findings Digital Marketing Email Marketing in the Middle East Email July–September 2013 Email is an important marketing tool in the region, with open rates of almost 20 percent (comparable to 18.9 percent in Global Brands, n=30 87% Local Brands, n=13 the U.S).19 Almost 90 percent of global brands offer email sign-up, though follow-up is weak—less than half send a welcome email. Local brands fare worse, with less than half offering email sign-up and only 23 percent sending a 47% 46% welcome message. Brands send very few emails—just over 0.6 per week. With a lack of E-commerce, email could be an 13% 15% brands include a link to a store locator, and just 10 percent 8% list brick-and-mortar locations. Mobile-optimized email is key as more than 71 percent of mobile Internet users in the Middle East rank email as their 27% 23% effective source of store traffic. However only 31 percent of Email Sign Up 8% 0% Link in English Emails for Arabic Arabic Text in Emails Welcome Email Emails Are Personalized primary mobile Internet activity.20 Though all messages were viewable on a mobile device, the majority of emails received were designed for the desktop or laptop. Percent of Brands Sending Emails by Frequency July–September 2013, n=30 40% 30% 20% 7% 0.0 0.1– 0.5 0.6–1.0 1.1–2.0 3% 2.1–3.0 Emails Per Week 19. “2013 Email Marketing Metrics Benchmark Study,” Silverpop, June 2013. 20. “71% of Mobile Internet Usage is for Email in Middle East,” Andrew Bonar, Email Expert, February 4, 2011. © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. Average: 0.63 per Week 9
  10. 10. EXCERPT from the Digital IQ Index®: Middle East | Prestige Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com October 17, 2013 Key Findings Social Media Social Media Eighty-eight percent of Internet users in the Middle East access social networking sites daily. The primary activity is Middle East Social Media Penetration exploring and discussing pop culture, community issues, September 2013 sports, and politics—brands and E-commerce are not Global Brands, n=81 Local Brands, n=13 (currently) top of mind.21,22 Facebook leads in a crowded market for platforms. With an estimated 58 million users, Facebook is the dominant platform in the region.23 For content, beauty 41% 100% 20% 69% 21% 62% brands are best at embracing local languages—Vichy, L’OCCITANE, Bobbi Brown, and Avon all have pages in Arabic. Some of their tabs are also in the local language, demonstrating an ability to target the local market at a deeper level. Hotel brands lag, with almost all tabs in English and some replying to Arabic comments in English. Marks & Spencer Arabia and Ritz Carlton Dubai Financial Facebook Twitter YouTube Centre punch above their weight class as statistical outliers in engagement relative to their community size, while beauty brands Vichy, Lancôme, and Clarins are outliers below the mean. 19% 46% Instagram 11% 31% Pinterest 12% 23% Google+ 21. “Internet Usage in The Middle East – Statistics and Trends [Infographic],” Go Gulf, August 2, 2013. 22. “New Study on Media Use in the Middle East,” Neil Spencer, Social Media Today, May 27, 2013. 23. “Social media usage in the Middle East,” Ahmed Gabr, Wamda, June 16, 2013. © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 10
  11. 11. EXCERPT from the Digital IQ Index®: Middle East | Prestige Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com October 17, 2013 Table of Contents Click logo to return here. Click screen shots with this icon to view online! Click to jump to: 5 Spotlight: Middle East 6 Methodology 7 Brand List 8 Top 20 Ranking 9 Key Findings Site 24 Flash of Genius 24 Rotana Hotels: Mobile Integration Moves 9 Site Localization & E-commerce Beyond Booking 11 Souq.com 25 Marks and Spencer: Offline/Online Synergy 12 Store Locator & CRM 26 Bloomingdale’s: Local Programming via 13 Middle East Hotel Site Sophistication Online Personas Digital Marketing 27 Faces: Digital Beauty Tips 14 Search 28 The Ritz-Carlton: Building Awareness 15 Email Among Influencers Social Media 17 Social Media 18 Facebook 19 Twitter & LinkedIn 29 L2 Team 30 About L2 20 YouTube 21 Instagram Mobile 22 Mobile Site 23 Mobile Apps © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 11
  12. 12. EXCERPT from the Digital IQ Index®: Middle East | Prestige Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com About L2 October 17, 2013 ? L2 is a think tank for digital innovation. We are a membership organization that brings together thought leadership from academia and industry to drive digital marketing innovation. Upcoming Events L U N C H :   WATC H ES & J E W EL RY October 24, 2013 · New York City October 29, 2013 · Geneva R ESEAR C H Digital IQ Index®: The definitive benchmark for online competence, Digital IQ Index® reports score L U N C H :   BE A U TY brands against peers on more than 600 quantitative and qualitative data points, diagnosing their digital October 31, 2013 · New York City strengths L U N C H :   FA S H I O N and weaknesses. L2 Collective : Series of benchmarking reports designed to help member brands better understand ® resources, human capital, budgets, and priorities supporting digital strategies. November 22, 2013 · New York City L2 FORUM November 6 & 7, 2013 · New York City EVENT S Forums: Big-picture thinking and game-changing innovations meet education and entertainment. The largest gatherings of prestige executives in North America. 300+ attendees Clinics: Executive education in a classroom setting with a balance of theory, tactics, and case studies. 120 –180 attendees Working Lunches: Members-only lunches led by digital thought leaders and academics. Upcoming Research D I G I TA L I Q I N D EX ® R E P O RT: Watches & Jewelry Beauty Fashion Sportswear Homecare Topic immersion in a relaxed environment that encourages open discussion. 40–80 attendees CONSULT ING Advisory Services: L2 works with brands to garner greater return on investment in digital initiatives. Advisory work includes Digital Roadmaps, Social Media Strategy, and Organizational Strategy engagements. MEMBER SHIP For membership info and inquiries: membership@L2ThinkTank.com © L2 2013 L2ThinkTank.com. Circulation of the report violates copyright, trademark and intellectual property laws. 12
  13. 13. © L 2 2013 L 2 ThinkTank.com Reproductions Prohibited This report is the property of L2 Think Tank. No copyrighted materials may be reproduced, redistributed, or transferred without prior consent from L2. L2 reports are available to L2 Members for internal business purposes. A THINK TANK for DIGITAL INNOVATION 51 East 12th Street, 2nd Floor New York, NY 10003 L2ThinkTank.com info@L2ThinkTank.com EXCERPT from the Digital IQ Index®: Middle East | Prestige To access the full report, contact membership@L2ThinkTank.com
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