World luxury index™ china 2013

1. In partnership with: THE WORLD LUXURY INDEX™ China 2013 THE MOST SOUGHT-AFTER LUXURY BRANDS Photo architecturepics.org

2. Created as a way to provide luxury brands with a standardized way of measuring brand interest at an international level, Digital Luxury Group, in partnership with Luxury Society, unveils: An international ranking and analysis of the most searched-‐‑for brands within the luxury industry. © Digital Luxury Group, SA 2 A New Luxury Benchmark is Born. The World Luxury Index.

3. A Market with Untapped Potential. "ʺThe potential in China is so important. You might have a slowdown there, but the tank is so big. There are so many cities where we have not scratched the potential yet” Bernard Fornas Co-‐‑Chief Executive Oﬃcer of Richemont -‐‑ Riding the Tiger of Luxury, WSJ, March 18th 2012

4. © Digital Luxury Group, SA 4 The World Luxury Index China 2013. 400+ brands 6 Key Segments Unbiased insights from the top search engines in China: 680 million+ searches* Cars HospitalityBeautyFashion Jewelry Watches Covering: * From Jan -‐‑ Dec 2012

5. © Digital Luxury Group, SA 5 WHAT ARE THE MOST SEARCHED LUXURY BRANDS IN CHINA?

6. 6 TOP 50 MOST SOUGHT-AFTER Luxury Brands in China. Data range: Jan -‐‑ Dec 2012 1 Audi 奥迪 26 Armani 阿玛尼 2 BMW 宝马 27 Tiffany & Co. 蒂芙尼 3 Chanel 香奈儿 28 Swarovski 施华洛世奇 4 Estée Lauder 雅诗兰黛 29 Jaguar 捷豹 5 Louis Vuiòn 路易威登 30 Bentley 宾利 6 Lexus 雷克萨斯 31 Maserati 玛莎拉蒂 7 Mercedes Benz 梅赛德斯奔驰 32 Rolls Royce 劳斯莱斯 8 Dior 迪奥 33 Sheraton 喜来登酒店 9 Porsche 保时捷 34 Biotherm 碧欧泉 10 Lamborghini 兰博基尼 35 Maybach 迈巴赫 11 Lancôme 兰蔻 36 Omega 欧米茄 12 Gucci 古驰 37 Lincoln 林肯 13 Hermès 爱马仕 38 Borghese 贝佳斯 14 Volvo 沃尔沃 39 Hilton 希尔顿酒店 15 Land Rover 路虎 40 Clarins 娇韵诗 16 Infiniti 英菲尼迪 41 Benefit 贝玲妃 17 Chow Tai Fook 周大福 42 Acura 讴歌 18 Cadillac 凯迪拉克 43 Elizabeth Arden 伊丽莎白雅顿 19 Cartier 卡地亚 44 Versace 范思哲 20 Clinique 倩碧 45 Anna Sui 安娜苏 21 Burberry 博柏利 46 InterContinental 洲际酒店 22 Coach 蔻驰 47 Rolex 劳力士 23 Ferrari 法拉利 48 Guerlain 娇兰 24 Prada 普拉达 49 Longines 浪琴 25 Shiseido 资生堂 50 Rado 雷达 © Digital Luxury Group, SA

7. © Digital Luxury Group, SA 7 Top 3 Brands by Segment. FASHION CARS BEAUTY HOSPITALITY WATCHES JEWELRY #1 #2 #3

8. © Digital Luxury Group, SA 8 Brands – Who ’s IN/OUT. •  Brands entering the top 50 for the ﬁrst time: •  Brands no longer in the Top 50: (# 43) (# 50) (was # 42) (was # 48)

9. A Market Going Independant. “Many brands expected that an increase in Chinese sophistication would reduce the cultural gap with their overseas consumers. In some cases, it actually contributed to the development of unique local preferences, independent from Western tastes, thus challenging luxury brands in terms of product oﬀering but also opening up the way for new opportunities to grow in the Chinese market.” Pablo Mauron General Manager China at Digital Luxury Group Photo Qeelin

10. 10 Chanel Oversteps Louis Vuitton. 2012 Rank 2011 Rank Chanel #3 #5 Louis Vui`on #5 #3 “Chanel is beneﬁting from an important level of interest in China, mostly emanating from strong interest from Chinese consumers in its Beauty products, which Louis VuiSon does not have.” David Sadigh Founder & CEO of Digital Luxury Group

11. •  Cars remains the most searched for luxury sector in China 11 Cars Lead. BREAKDOWN BY SEGMENT © Digital Luxury Group, SA

12. © Digital Luxury Group, SA 12 “Language barriers continue to create complexities between Chinese consumers and Western luxury brands. Almost 40% of searches are for either non-‐‑oﬃcial or original brand names, whilst the remaining searches are for their oﬃcial Chinese name.” Echo Zhiyue ZHOU (周之悦) China Digital Strategist, Digital Luxury Group How Chinese Consumers Search for Brands?

13. © Digital Luxury Group, SA 13 How Chinese Consumers Search for Brands? •  Chinese consumers search for brands in various ways, reflecting how they are being remembered in the mainland. Brands should keep this in mind when developing their communication strategies for China, especially new brands entering the market. Variation of search paèrns between segments: • The Beauty segment has the highest ratio of Chinese brand names • Fashion is the segment most searched in brands’ original names, but also in acronyms *Benchmark study and analysis jointly conducted with: 62% 66% 30% 20% 6% 10% 1% 3% Search engines E-‐‑commerce sites* Consumer Search Pattern for Brand Names on Search Engines and E-commerce Sites English acronyms or others Non-‐‑official Chinee name Official original name Official Chinese name

14. 14 Differences between Individual Brands. 19% 73% 8% Tiffany & Co. Non-‐‑official name ‘蒂凡尼’, a misspelling of the official one 67% 5% 28% LexusNon-‐‑official name ‘凌志’, given by retailers before the brand’s official entry into the China market in 2004, is still very popular 8% 63% 29% GucciSearches for ‘古奇’ and ‘古琦’, both misspelling of the official Chinese name The official Chinese name ‘古驰’ is li`le known in China 95% 5% Estée Lauder Estée Lauder is overwhelmingly recognized by its Chinese name ‘雅诗兰黛’, because of the brand’s consistent communication but also the difficulty to remember the original name for Mandarin speakers © Digital Luxury Group, SA

15. 15 © Digital Luxury Group, SA Cars

16. © Digital Luxury Group, SA 16 Top 10 Car Brands in China. #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 (/)* (/) (+1) (-1) (/) (/) (/) (+1) (-1) (+1)

17. © Digital Luxury Group, SA 17 Top rising brand Top declining brand A Race of Cars. Maybach (-10) Jaguar (+5) Evolution Rank 2012 Brand Name +5 29 Jaguar +2 18 Cadillac +2 37 Lincoln +1 32 Rolls Royce +1 15 Land Rover +1 30 Bentley / 1 Audi / 2 BMW / 6 Lexus / 9 Porsche / 10 Lamborghini -‐‑1 16 Inﬁniti -‐‑1 42 Acura -‐‑2 14 Volvo -‐‑3 7 Mercedes Benz -‐‑4 31 Maserati -‐‑6 23 Ferrari -‐‑10 35 Maybach

18. •  China is now the 1st market for Jaguar. Sales have increased by +74% in 2012, compared with +4% average growth rate for the overall car market •  The joint venture with Chinese local brand Chery has triggered a lot of interest and is also Jaguar’s 1st joint venture outside the UK •  The 1st manufacture sector of Jaguar outside the UK is located in China •  Jaguar has paid great a`ention to product customization for the Chinese market (3.0 L engine, long wheelbase, etc.) •  Jaguar 4S stores in China are equipped with golf practice ﬁelds, massage rooms, internet bar etc., to take care of Chinese consumers’ unique needs © Digital Luxury Group, SA 18 Jaguar - Rising Star. Photo autoguide.com

19. © Digital Luxury Group, SA 19 Jaguar - Rising Star. “This year Jaguar Land Rover expects its China sales to increase between 20% and 30% over 2012'ʹs sales, while growth in Europe is expected to increase only by a single-‐‑ digit percentage rate. Total investment in its China strategy over the past three to ﬁve years was way past £1 billion -‐‑ Investment in its joint venture with local car maker Chery Automobile Co. accounts for roughly half. Under its joint venture agreement, JLR also must produce a brand speciﬁcally for the joint venture. "ʺ Phil Popham Director of Group Sales Operations, Jaguar Land Rover -‐‑ Tata'ʹs Jaguar Expects China Sales to Leap Over Europe, WSJ, April 23rd 2013

20. 20 © Digital Luxury Group, SA Beauty Photo Shiseido

21. © Digital Luxury Group, SA 21 Top 10 Beauty Brands in China. #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 (/) (+1) (-1) (+1) (-1) (/) (/) (/) (/) (/)

22. © Digital Luxury Group, SA 22 Skincare is King. •  The Chinese beauty market is dominated by skincare -‐‑ unlike most Western and other BRIC markets Breakdown of Searches for Beauty Products in China

23. 23 Breakdown by Category. •  Estée Lauder and Clinique, are winning over Chinese women’s hearts thanks to strong skincare products 86% 56% 9% 4% 94% 57% 12% 22% 30% 15% 6% 17% 2% 22% 60% 81% 26% Estée Lauder Lancôme Dior Chanel Clinique Avg. (Top 5 brands) %Skincare %Makeup %Fragrance © Digital Luxury Group, SA

24. 10.4% 22.7% 89.7% 77.3% Lancome Estee Lauder © Digital Luxury Group, SA 24 Victory of Skincare Lines Dedicated to China. •  Overwhelming brand awareness of Estée Lauder’s ‘Nutritious’ line. At first developed specifically for the Chinese market, the brand is now selling it in western markets as well. Searches for ‘Nutritious collection’ or ‘Red pomegranate’, the Chinese name of the line Searches for ‘Génifique’ the most popular product line of Lancôme

25. © Digital Luxury Group, SA 25 Most Popular Beauty Products. Clinique ‘Dramatically Different Moisturizing Gel’, known as ‘The buèr’ (‘黄油’) in China #1 Makeup •  Chinese consumers spontaneously rename products they love using “cute” nicknames, often linked to food Benefit ‘dr. feelgood’ makeup primer, known as ‘Piggy oil’ (‘猪油膏’, widely used in Chinese cooking) in China #1 Skincare

26. © Digital Luxury Group, SA 26 Top 3 Fragrances in China Most Popular Fragrances. •  Compared with the highly local-‐‑speciﬁc skincare and makeup segments, preference for fragrances is much more in line with international trends #1 Dior ‘J’adore’ #2 Chanel ‘No.5’ #3 Chanel ‘Chance’

27. 27 © Digital Luxury Group, SA Fashion

28. © Digital Luxury Group, SA 28 Top 10 Fashion Brands in China. #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 (/) (+1) (+1) (-2) (+2) (-1) (-1) (+1) (+17) (+2)

29. •  Bags and wallets dominate the Chinese fashion market generating almost 90% of total interest © Digital Luxury Group, SA 29 China’s Love Affair with Bags. *‘All others’ include: belts, scarves, ties, gloves, cuﬄink

30. © Digital Luxury Group, SA 30 Top Handbag Models. Rank vs. Global Brand Models 1 +2 Céline Luggage 2 -‐‑1 Hermès Birkin 3 +4 Chanel 2.55 4 -‐‑2 Longchamp Le Pliage 5 -‐‑1 Hermès Kelly •  Céline’s iconic ‘it bag’-‐‑ Luggage, tops handbag models in China, +2 places ahead of its global ranking. For more information please visit: www.worldhandbagreport.com

31. © Digital Luxury Group, SA 31 •  Local celebrity endorsement has played a major role in its popularity. •  Chinese ‘nicknames’ for the ‘Luggage’ has made it easy to remember. The model is widely renamed ‘囧包’ and ‘笑脸包’ in China. •  The ﬁrst word refers to a facial expression – a Chinese internet meme-‐‑ that the bag resembles. The second word means-‐‑ ‘smiling bag’-‐‑ also linked to its appearance. Name Helps Product Stand Out. The Chinese internet meme ‘囧’ refers to a facial expression, thought to resemble the Céline Luggage handbag

32. 32 © Digital Luxury Group, SA Jewelry Photo Bulgari

33. © Digital Luxury Group, SA 33 Top 10 Jewelry Brands in China. #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 (/) (/) (/) (+1) (-1) (/) (+5) (+3) (-2) (-2)

34. © Digital Luxury Group, SA 34 Big Players Dominate. #1 #2 #3 •  Top 3 brands represent almost 90% of total interest •  Rings is the most popular product category representing half of the market

35. 73.3% 52.7% 36.8% 25.8% 8.7% 54.4% 0.9% 35.9% 6.3% 1.1% 0.0% Chow Tai Fook Cartier Swarovski Brand & Products Material Price Points of Sales All others © Digital Luxury Group, SA 35 Breakdown by Search Intention. •  Cartier, the higher-‐‑end brand amongst the top three, generates more searches for ‘Price’ than other search intentions Breakdown of Search Intentions for Top 3 Jewelry Brands in China

36. © Digital Luxury Group, SA 36 Top 3 Jewelry Collections. Cartier Love Cartier Tank The Tiffany Setting •  Timeless signature design collections lead the way with Cartier and Tiffany’s •  The Tiffany Seìng is known in China by its nickname: ‘Tiffany 6 paws’ (‘六爪’) •  Chow Tai Fook ranks #1 on a brand level but has no recognizable collection -‐‑ An opportunity for the Chinese brand to grow in its home country? #1 #2 #3

37. © Digital Luxury Group, SA 37 China’s LOVE Affair with Cartier. •  Cartier entered the mainland oﬃcially in 2001 •  LOVE collection launched in China in 2006 •  Cartier China’s 1st digital marketing campaign was for the LOVE collection with MSN China Luxury Channel: -‐‑ Aim was to generate increased brand awareness among 25-‐‑35 yrs old white collar workers -‐‑  Created a microsite, resulting in +1 million page views during campaign period •  Cartier’s Tank jewelry collection beneﬁted from name recognition linked to extensive communication campaigns by the Maison in 2012 for the 75th anniversary of the iconic Tank watch. The celebration was promoted heavily on social media, especially Sina Weibo, China’s No.1 social platform, on which Cartier now has 460K+ fans

39. © Digital Luxury Group, SA 39 Top 10 Watch Brands in China. #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 (/) (+1) (-1) (/) (/) (/) (+1) (-1) (/) (+3) Evolution VS. Jan -‐‑ Dec 2011 (WorldWatchReport™ 2012)

40. © Digital Luxury Group, SA 40 Rank 2012 Evol. vs. 2011 Brand Model vs. Global rank 1 +3 Omega De Ville +12 2 -‐‑1 Omega Constellation +9 3 -‐‑ Cartier Ballon Bleu +28 4 +1 Chanel J12 +5 5 -‐‑3 Longines Master +34 Elegance Dominates Top 5 Watch Models. •  All top ﬁve watch models in China are very classic and elegant, far away from the world of sports and chronographs which are more popular with Western consumers

41. © Digital Luxury Group, SA 41 Love for Ceramic. •  Passion for ceramic is overwhelming in China (45.6% of total interest in materials) compared with any other country, such as: The United States (7.3%), Japan (16.7%), United Kingdom (8.5%) and Germany (12.9%) Breakdown of Watch Material Searches in China For more information please visit: www.worldwatchreport.com

42. © Digital Luxury Group, SA 42 Unleashing China’s Purchasing Power. “The need to unleash purchasing power promises future growth for the Chinese luxury watch market. Personally I think it will maintain its rapid growth rate, though it might drop to a stable rate compared to previous years, just as China’s GDP needs to slow down. This is a result of the growing maturity of consumers, selection range expansion, dispersed purchase channels and development of higher demands.” Yingze (William) Bai Editor-‐‑in-‐‑Chief, Horlogerie Culture Center of China

44. Chinese Luxury Hospitality Focus. Top Local Destinations Shanghai Beijing Tianjin Shenzhen Hangzhou Top International Destinations Hong Kong Singapore Maldives Bangkok Guam Top 10 Hotels #1 Sheraton #2 Hilton #3 InterContinental #4 Shangri-‐‑La #5 Westin #6 Four Seasons #7 Renaissance #8 Hya` Regency #9 Nikko #10 Ri|-‐‑Carlton +56.4% +50.0% +49.3% +49.1% +45.3% +42.0% +34.9% +30.9% +29.2% +22.8% +3.3% St. Regis Kempinski Grand Hya` Mandarin Oriental Le Méridien Banyan Tree Fairmont Wyndham Langham Soﬁtel China Top 10 Fastest Growing Hotels +1.9% +35.4% +62.7% +3.3% +20.5% +76.2% Luxury Major Luxury Exclusive Upper Upscale China Global Vs. Global +1 -‐1 +7 +12 -‐2 -‐2 +2 -‐2 +18 -‐3 © Digital Luxury Group, SA

45. Chinese Luxury Hospitality Focus. •  Upscale and luxury have remained constant as a share of total hotels in China ( +8% on average progression 2003-‐‑2010). •  The number of domestic travelers is forecasted to increase by over +25% from the current level to reach 3.3 billion by 2015. •  The World Tourism Organization projects that by 2020, 100 million Chinese tourists will make their way abroad annually. Source: Euromonitor International, Tourism Flows Outbound in China, March 2012.Mintel The rise of the BRICs-‐‑ For more information on Luxury Hospitality, please view our reports: © Digital Luxury Group, SA

46. Interested in More Information? Digital Luxury Group oﬀers the opportunity to subscribe to a business intelligence service, which monitors the changing consumer interest of luxury prospective clientele. Through unique benchmarking metrics, luxury brands receive timely updates on the consumer demand for brands, competitors, product categories as well as various insights on key marketing drivers capturing the a`ention of luxury consumers worldwide. For more information, contact us: wlichina@digital-‐‑luxury.com © Digital Luxury Group, SA

47. The World Luxury Index™ is an international ranking and analysis of the most searched-‐‑for brands and services within the luxury industry. Covering over 400 companies within six key segments (fashion, beauty, jewelry, cars, watches, and hospitality) in ten key luxury markets, the World Luxury Index™ provides insights on the unbiased search inputs coming from global luxury consumers in the world’s top search engines (Google, Bing, Baidu, Yandex). The result is a one-‐‑of-‐‑a-‐‑kind benchmark of the luxury brands capturing the a`ention of luxury-‐‑minded consumers around the world. Digital Luxury Group has a history in luxury industry market intelligence. Since 2004, the WorldWatchReport™ has provided the luxury watch industry with unmatched insights and garnered a`ention from the world’s leading publications, such as: 47 ABOUT. © Digital Luxury Group, SA

48. © Digital Luxury Group, SA 48 ABOUT. www.digital-luxury.com www.luxurysociety.com With offices in New York, Geneva, Shanghai, and Dubai, Digital Luxury Group (DLG) is the first international company dedicated exclusively to the design and implementation of digital communication strategies for luxury brands. Luxury Society is the world'ʹs most influential online community of top luxury executives. Based in Paris, with members in more than 150 countries, Luxury Society informs and connects CEOs, managers, journalists, consultants, designers and analysts from across the luxury industry.

49. CONTACT. www.digital-luxury.com GENEVA NEW YORK SHANGHAI DUBAI 590 Madison Ave New York, NY 10022 T: +1 212-‐‑521-‐‑4310 E: newyork@digital-‐‑ luxury.com 7 Avenue Krieg 1208 Geneva T: +41 22 702 07 60 E: geneva@digital-‐‑ luxury.com Suite 1509, Shatha Tower, Dubai Media City PO Box 50954 Dubai T: +971 4 454 8464 E: dubai@digital-‐‑luxury.com 15/F One Corporate Avenue 222 Hubin Road, Luwan District Shanghai, 200021 T: +86 21 6122 1065 E: shanghai@digital-‐‑ luxury.com

World luxury index™ china 2013

World luxury index™ china 2013

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