The document provides an overview of the luxury market in China and discusses how luxury brands can utilize social media strategically. The key points are: 1. The luxury market in China is huge and growing rapidly, expected to account for 20% of the global luxury market by 2015. Leather goods (bags) generate the most online discussion. 2. Different social media sites have varying levels of engagement and influence regarding luxury brand discussions. Understanding these sites is important for effective media planning. 3. Brands should listen to conversations, understand Chinese cultural context and purchase drivers, and then strategically participate in discussions using celebrities and other approaches tailored to each brand's voice.

1. The Voice of Luxury:
Social Media and
Luxury Brands
in China
2011 GroupM Knowledge - CIC White Paper on Luxury

2. Executive summary
Background: The luxury market in China is huge and growing fast.
• China’s most wealthy are spending more every year, with luxury consumption
expected to account for 20% of the global market by 2015.
Methodology:
• General Market Intelligence: GroupM Knowledge provided a luxury market
overview, including data from the GroupM Knowledge/ Hurun Wealth Report
• Social Media Intelligence: CIC collected, mined and analyzed millions of
Chinese social media comments relating to luxury, utilizing patent pending
technology and a team of seasoned analysts
CIC L-K-P FRAMEWORK FOR MAKING SENSE OF THE BUZZ
Listen听 Know识 Participate融
Topic E-Culture Communication
Listen to the buzz Know the culture Participate in the
and find out and context of the conversation.
what’s hot online. internet
community.
The Voice of Luxury: Social Media and Luxury Brands in China i

3. Executive summary
Strategy 1: Listen to talk about luxury
• Brand Overview: Louis Vuitton lead the luxury market’s online discussion in
China; Chanel command high buzz volume and positive sentiment.
• Category Overview: “Leather Goods” (Bags) - the most discussed luxury
category in China.
• Efluencer Overview: The top 20% of netizens contributed 80% of the content
in luxury category. There are 4 types of luxury efluencer shaping the
conversation: Shopaholic, Style Guru, Fashionista and Brand Fan.
Strategy 2: Know and understand China’s unique cultural context
• “Shai” (showing off) is very popular in Chinese luxury & fashion BBS
communities, accounting for an average of 90% of the comments about luxury
brands.
• Globally speaking, China is positioned as “in the show” stage of luxury
consumption, going through different stages of shai; Product Shai, True Man
Show and Lifestyle Shai.
• Overseas purchase and purchasing agents (i.e. Daigou) are also hot topics.
• Live broadcasting from fashion shows is a new way for Chinese netizens to
keep in touch with the latest fashion trends. Now “runway broadcasting” is
popular via microblog, incorporating pictures, videos and real-time interaction.
• Chinese luxury consumers are categorised in four groups: Aspirational Buyer,
Quality Pursuer, Status Seeker and Trend-Setter.
Strategy 3: Participate in the conversation in a relevant and appropriate way
• The microblog (weibo) offers brands a platform that is not only for listening but
also for actively participating in the online conversation. Chanel is the most
mentioned brand in Chinese microblogs (600,000 tweets between January and
May 2011), while Burberry’s account is the most engaged (43,001 retweets
and 5,320 comments in the same period).
• There are numerous engagement strategies that brands can employ to
participate in the conversation, including leveraging celebrities’ massive social
reach to spread the brand culture.
• Brands should track weibo accounts carefully to ensure they create content
that resonates with netizens and is appropriate for the brand’s voice.
• Central to microblog engagement and any social media participation is a tone
of voice befitting your brand culture. So, luxury brands must find the luxury
voice in social media.
August 2011
The Voice of Luxury: Social Media and Luxury Brands in China ii

4. Table of contents
Chapter I
Listen- Listen to the buzz and find out what’s hot online
P 02 - 1.1 Luxury Category Overview
P 07 - 1.2 Luxury target audience
P 10 - 1.3 Luxury efluencers
Chapter II
Know- Know the culture and context of the internet community
P 13 - 2.1 Luxury brand position in China
P 17 - 2.2 Purchase drivers
P 18 - 2.3 Differences between Chinese and Western consumers
P 24 - 2.4 Overseas purchase
P 27 - 2.5 Counterfeits
Chapter III
Participate- Participate in the conversation
P 28 - 3.1 Luxury brand microblogs
P 33 - 3.2 How do luxury brands utilize social media?
P 35 - 3.3 Social media strategies / Marketing luxury brands
P 37 - 3.4 New challenges and opportunities
The Voice of Luxury: Social Media and Luxury Brands in China iii

5. Research Methodology
Data Source
General market intelligence
GroupM Knowledge provided general luxury market overview data, including data from the
GroupM Knowledge/ Hurun Wealth Report 2011.
The study carried out research both from the ‘bottom-up’ and ‘top-down’. From the
‘bottom-up’, the research looked at the number of key investment and spending indicators
amongst mainland Chinese. These included the number of individual properties by region
worth between 5 million yuan and 10 million yuan, the number of luxury cars purchased in
the last three years costing 500,000 yuan or more, the number of high bracket income tax
payers, company registered capital and so on. For the ‘top-down’ approach, it applied the
Gini coefficient, measuring income distribution against the 2010 China GDP and 2009 China
GNP.
Social media intelligence
CIC has been collecting and mining luxury conversations from across the unique,
fragmented and dynamic social media landscape for over 3 years and boasts an archive of
over 10 million comments.
For this study, CIC collected, mined and analyzed millions of Chinese social media comments
about luxury utilizing patent pending technology and a team of seasoned analysts.
• BBS analysis : CIC collected over 4,500,000 comments in Q1 2011 from luxury and fashion
related BBS sites.
CIC Luxury & Fashion Panel Data BBS Overview (per month)
1,500,000+ messages collected per month
-Cover 40+ luxury & fashion sites
- Track 1,000+ luxury & fashion related products, 30+ related drivers & attributes
- 80,000+ posters
- 220,000+ brand messages
- 100,000+ driver mentions
• Microblog analysis : CIC collected over 2.4 million tweets mentioning luxury brands
from Sina Weibo between January and May 2011. CIC also collected tweets from
selected luxury brand’s microblog accounts. All of these were then mined for
mentions of over 1000 luxury and fashion related products and related attributes.
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P01

6. The Voice of Luxury: Social Media and Luxury Brands in China

7. Chapter I: Listen
Chapter I
China’s Vast Luxury Market and Unique Luxury IWOM
1.1. Luxury Category Overview
1.1.1 China’s Luxury Status
Chinese luxury consumption is projected to grow 18% annually from 2010 to 2015, by which
time accounting for over 20% of the global luxury market.
Luxury goods consumption in China, 1998-2015
180
Unit: Billion RMB
80
55 64
5
1998 2008 2009 2010 2015E
Global Share (%) <1% 6% 8% 10% 20%
Source: Mckinsey Insights China - Understanding of China’s Growing Love for Luxury
I. Growing Number of Chinese Rich
The number of wealthy Chinese with a personal fortune of 10 million RMB or more reached
960,000 in 2010, an increase of 9.7% compared to the previous year.
The top 10 domestic markets by 10million+ RMB population:
1. Beijing
2. Guangdong
3. Shanghai
8 4. Zhejiang
Solid macro 1
5. Jiangsu
economy 7 6. Fujian
10 5 7. Shandong
3
9 4 8. Liaoning
6 9. Sichuan
2 10. Henan
Source: GroupM Knowledge - Hurun Wealth Report 2011
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P02

8. Chapter I: Listen
II. Overview of Luxury Consumption in China
- Annual consumption accounts for 5% of total assets.
- China’s wealthy are spending more:
• 50% spend 1-3 million RMB per annum, a 11% increase from previous year
• 37% spend less than 1 million RMB per annum, down by 8% on previous year
• 13% spend more than 3 million RMB per annum, down by 3% on previous year
- Travel accounts for 29% of millionaire’s consumption, followed by daily luxuries, child
education, entertainment, gift giving and finally, saving.
Figure 1-1 Millionaire Consumption Patterns
Consumption Pattern 2011 (%) 2010 (%) 2009 (%)
Travel 29 27 16
Daily luxuries 23 24 25
Child education 22 20 18
Entertainment 12 9 16
Gift giving 7 11 21
Saving 7 10 4
Source: Hurun Best of the Best 2011- Preferred brands of China's richest
Source: GroupM Knowledge - Hurun Wealth Report 2011
III. Recognition of Luxury Brands Among Wealthy Chinese
- Chinese millionaires’ recognition of luxury brands has risen by 20% year on year.
- Louis Vuitton once again came in first for luxury brands but Hermès performed outstandingly
this year, rising from fourth place to second in the last year.
- The average Chinese millionaire has 3.7 watches.
Figure 1-2 Best Fashion Brands by Category
Category Brand Category Brand
Best Jewelry Cartier Best Overall Watch Patek Philippe
Best Fashion Label Giorgio Armani Best Watches with High
Patek Philippe
Best Accessory Hermès complications
Best Luxury Writing Instrument Montblanc Best Jewelry Watch Cartier
Best Skincare Estee Lauder Best Fashion Watch Gucci
Source: Hurun Best of the Best 2011- Preferred brands of China's richest
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P03

9. Chapter I: Listen
1.1.2 Luxury Category Introduction
The Chinese luxury market is booming. Many international brands are expanding their
investment in China and opening a lot of new stores, not only in tier I cities like Beijing and
Shanghai but also in lower tier cities as well.
The luxury category, as defined in this white paper, includes leather goods (bags), shoes,
fine jewelry, watches, RTW (Ready-to-wear or prêt-à-porter) and accessories (sunglasses,
belts and so on). Cars, hotels, cosmetics and service level products are not covered in this
report.
Figure 1-3 Selected Luxury Category
Leather Goods Shoes Fine Jewelry
Buzz Volume:79,649 posts Buzz Volume:31,718 posts Buzz Volume:16,489 posts
Accessories RTW Watch
Buzz Volume:15,182 posts Buzz Volume:13,420 posts Buzz Volume:12,514 posts
Source: CIC luxury panel data in Q1 2011
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P04

10. Chapter I: Listen
1.1.2 Luxury Category Buzz Distribution by Site
Bulletin Board Systems (BBS) are online discussion forums or communities frequently
focusing on high engagement categories. BBS provide a good channel to listen to consumer
feedback and to gain category insights in China. BBS play a particularly important role in the
unique Chinese social media landscape. Compared with other mature categories like
Cosmetics and Auto, there is less brand initiated buzz, mainly dominated by consumers’
organic buzz.
In CIC’s luxury panel, about 360,000 posts mention luxury brands and products in each
quarter. Fashion sites, Lifestyle communities and Luxury verticals are key buzz distributors,
among which 55bbs, Yoka and Iwatch are the top 3 sites where netizens talking about
luxury.
Understanding the sites with the most buzz can assist in more effective (social) media
planning.
Figure 1-4 Luxury Category Buzz By Site
Sites No. of Posts Post % No. of Conversation No. of Posters
55bbs 112,556 31.7% 2,139 14,868
Yoka 56,176 15.8% 1,955 4,910
Iwatch 36,978 10.4% 3,035 9,399
Belle8 27,877 7.8% 934 3,366
Liba 19,994 5.6% 697 3,541
KDS 15,290 4.3% 3,844 6,652
Watchlead 15,170 4.3% 1,513 719
Taobao 11,025 3.1% 2,571 3,245
Sohu 8,955 2.5% 1,106 598
Dianping 8,801 2.5% 461 1,698
Baidu 6,166 1.7% 1,450 1,353
Cqmmgo 5,940 1.7% 298 2,586
Tianya 5,849 1.6% 1,106 2,625
Mplife 4,493 1.3% 328 1,627
Others 20,303 5.60% 4,087 6,337
TOTAL 355,573 100.0% 25,524 63,524
Source: CIC luxury panel data in Q1 2011
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P05

11. Chapter I: Listen
1.1.3 Community Segmentation Analysis
Posting Rate (PR) is one of the online community passion indexes. A higher value indicates
that community members are more active and engaged in particular topics. Combined with
number of posters and buzz volume, we can map out community segmentation.
Figure 1-5 Map of Luxury Community
25
Watchlead
20
Sohu
15
QQ
Yoka
10
Belle8 55bbs
5 Liba
KDS
Taobao
Iwatch365
0
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
No. of Posters
Note: Bubble Size = Buzz Volume
Source: CIC luxury panel data in Q1 2011
Posting Rate= No. of Posts/ No. of Posters (i.e. average num of posts per poster )
Brand can optimize online media planning by understanding of different segment of communities.
Figure 1-6 Segmentation of Luxury Communities
+
Niche Communities Online Community Buzz Leader
− Sophisticated campaigns which − Key media spending
require high participation − Building awareness
Posting Rate
− Close cooperation with − Establish loyal users / brand fan
communities relations
Communities with less influence Popular Communities
− Help to spread the campaign or − Low barrier campaign
new launches information − Increasing awareness
- No. of Posters +
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P06

12. Chapter I: Listen
1.2 Luxury Target Audience
1.2.1 Luxury Category Poster Analysis
In the luxury category, the top 20% netizens contributed nearly 80% of the contents. Those
active netizens frequently share their shopping experience, brand news and luxury category
knowledge.
Figure 1-7 Buzz Distribution by Netizens
100%
20.0%
80%
60% 79.7%
40% 80.0%
20%
20.3%
0%
Netizens Contents
Source: CIC luxury panel data in Q1 2011
Content Analysis of Active Posters
Shopping experience sharing is a common phenomena in luxury category because Chinese
consumers are willing to show off their purchasing power and shopping achievements.
Secondly, brand news sharing is effective in attracting netizen participation, such as
seasonal new products launches, fashion shows, parties and so on. Knowledge sharing is
the third hot topic, which is a particularly popular in the watch category.
Figure 1-8 Content Analysis of Active Posters
Top Posters (ID) Buzz Sample Topic Content Site
烈火坚冰 1,572 爱马仕2011春夏新品鉴赏 Brand news sharing QQ
若 然 1,150 Zegna 2011/2012秋冬男装 Brand news sharing Sohu
Cathyxu861 1,008 超级血拼在中港加 Shopping experience 55bbs
[VACHERON
Ohseal 1,005 Knowledge sharing Watchlead
CONSTANTIN]6378
Tingtingky 979 TT@2011 P44 3/17更新咯 Shopping experience Liba
Source: CIC luxury panel data in Q1 2011
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P07

13. Chapter I: Listen
1.2.2 Hot Online Behavior Overview
“Shai” (or, showing off a product) is very hot in China’s luxury and fashion BBS communities.
Trading second-hand luxury products and counterfeits is also common among Chinese
luxury consumers.
Figure 1-9 Buzz Ranking of Hot Topics (Buzz Incidence)
Shai 57.5%
Experience/Knowledge
sharing
2.4%
Product inquiry 2.4%
Brand news sharing 1.9%
Trading 1.8%
Source: CIC luxury panel data in Q1 2011; Base: 355,573 luxury category posts in Q1 2011
Buzz Incidence: The ratio of a specific topic buzz in the total number of buzz
I. Buzz Trend of Shai Post
Buzz trend of Luxury “Shai” posts showed obvious seasonality. Buzz peaks occurred around
festivals/holidays when people could take shopping trips. From our perspectives, “Shai” is an
important touching point to link netizens’ offline shopping behavior with online expression.
Figure 1-10 Monthly Buzz Trend of “Shai” Posts
Unit: post National Day & Christmas & Spring
Mid-autumn Festival New Year Holiday Festival Labor Day
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Aug.09 Sep.09 Oct.09 Nov.09 Dec.09 Jan.10 Feb.10 Mar.10 Apr.10 May.10 Jun.10 Jul.10
Source: CIC luxury panel data in Aug.2009-Jul. 2010
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P08

14. Chapter I: Listen
II. Hot Online Topics by Brand
For fashion brands (e.g. LV, Chanel, Gucci), product shai (87.1%) dominated the hot content.
For watch brands, like IWC, knowledge sharing and brand news sharing are most common.
For trading luxury products, second-hand goods and counterfeit trading were also hot
buzzed online.
Figure 1-11 Buzz Ranking of Hot Topics by Top 10 Brands (Buzz Share)
Louis Vuitton
Chanel
Gucci
Coach
Prada
Dior
Cartier
Burberry
Hermes
IWC
TTL Brands
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Shai Experience/Knowledge sharing Product inquiry Brand news sharing Trading
Source: CIC luxury panel data in Q1 2011
Buzz Share: Refers to percentage of posts related to each attribute out of the sum of all attributes related
posts. The total percentage is 100%.
Note: Base is the sum of the top 5 hot attributes. Base: TTL brands: 234,505 posts.
LV: 37,105 posts; Chanel:25,530 posts; Gucci: 24,280 posts; Coach: 27,263 posts; Prada: 14,356 posts;
Dior:11,578 posts; Cartier: 8,511 posts; Burberry: 13,832 posts; Hermes: 9,346 posts; IWC: 10,720 posts
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P09

15. Chapter I: Listen
1.3 Luxury Efluencers
1.3.1 Classify Luxury Efluencers
Luxury Efluencers: They have huge influence and effective interaction with luxury fans.
Based on the buzz content, there are 4 clear behavioral characteristics amongst Luxury
Efluencers in the online community:
• Shopaholic: Showing off collections and “building floor”, which is a cumulative
update of their shopping achievements in a specific post, regularly updated to
attract netizen awareness.
• Style Guru: Expertise sharing to build effective interaction with luxury fans,
especially in the watch category
• Fashionista: Share latest fashion trends and use “Street Shot”(街拍) and “Self-
Shot”(自拍) to show off their trendy lifestyles.
• Brand Fan: Fiercely loyal to a particular brand, refer to themselves as “Fans” (粉)
to show their dedication to the brand.
I. Case Study of Shopaholic: “Tingtinky” (Netizen’s ID)
A typical heavy buyer, regularly posting new products to “build floor”. In addition, she
achieves good interaction with netizens by answering product inquiries. This post attracted
over 18,600 replies.
“Building
Floor”
Sample Quote of Social: Sample Quote of Inquiry:
Netizens: 我觉得miumiu老合适TT宝贝的风 Netizens:请问Betsey Johnson的鞋子哪里有
格//I feel Miu Miu fit your style. 卖啊？ // Where do you buy Betsey’s shoes?
Tingtinky:得到SARA额肯定~吾得意地笑啊 Tingtinky:我在香港买的哦
得意地笑// I’m happy because of your 上海好像么有专卖店的// I bought in Hong
comments. Link Kong. Betsey Johnson does not have store in
Shanghai. Link
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P10

16. Chapter I: Listen
II. Case Study of Style Guru: “瓜瓜的小光” (Netizen’s ID)
A typical “Guru”, sharing watch category knowledge and building effective interaction with
netizen by Q&A. This post attracted over 42,800 replies.
Sample Quote of Q&A:
Netizens: Oris适合初玩表的人戴吗，
Netizen’s question 有什么款好推荐的。// Could you give
suggestions for new users like me?
瓜瓜的小光: Oris不错，对于男表而
言，它的机芯小了。 FM的定位是高
端，低端的价格偏高了// Oris is good,
but its men watch’s chip is small. FM is
瓜瓜的小光’s answer a high-end brand, and the price of its
low-end watches are expensive. Link
III. Case Study of the Fashionista: “喜欢旅游的小孩子” (Netizen’s ID)
Sharing the latest fashion trends using “Street Shots” of European and US celebrities. This
post attract over 1,000 replies.
Sample Quote:
Subject:欧美明星一周娱乐星闻播报
(街拍+礼服+八卦)第87辑2.14-2.20//
Street Shot of Western celebrities in
Feb 14th – Feb 20th 2011.
Reply: 我喜欢Dianna Agron 。甜死
了// I love Dianna Agron, she is a
sweet girl. Link
IV. Case Study of Brand Fans: “外星人也爱美 ” (Netizen’s ID)
Hermes fans, focused on collecting Hermes products, including bags, scarves, watches and
so on. This post attracted over 350 replies.
Sample Quote:
2010年买的5个Hermes //My
five Hermes bags purchased in
2010
Reply:真美啊……蓝色的真好看
// So beautiful, especially the
blue one. Link
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P11

17. Chapter I: Listen
1.3.2 Daren Models-The interaction of netizens on luxury social networks
When plotting the interaction on social networks, there are essentially two axes:
conversation and activity. Conversation is about opinions expressed and emotions
exchanged; posting, forwarding, replying, supporting and voting. Activities generally occur
spontaneously and are initiated by luxury Daren or by the overall community but can be
sparked by a third party. By activity we mean things like offline event, brand promotion, and
fashion show.
Figure 1-12 The connecting threads of personal relationship within a luxury social network
Conversation
Voting Like
Replying Viewing
Posting Forwarding
Spectator Brand Fan Luxury Shopaholic Spectator
Efluencer
Private
Advertising
Messages
Sales
Task Promotion
Brand
Gathering
Promotion
Activity
Note: “Luxury Efluencer” refers to
both Style Gurus and Fashionistas
Source: CIC White Paper, Efluencer Model, Mar 2011
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P12

18. The Voice of Luxury: Social Media and Luxury Brands in China

19. Chapter II: Know
Chapter II
Chinese Consumers
2.1 Luxury Brand Position in China
2.1.1 Luxury Brand Buzz Volume Ranking
According to the brand buzz volume ranking, Louis Vuitton was most discussed online,
followed by Chanel, Gucci and Coach.
Figure 2-1 Top 20 Luxury Brand Buzz Volume Ranking
Louis Vuitton 66,659
Chanel 55,299
Gucci 40,029
Coach 39,651
Prada 28,162
Dior 26,973
Cartier 25,072
Burberry 24,514
Hermes 23,988
IWC 20,819
Tiffany 17,977
Rolex 16,783
Miu Miu 16,284
Armani 11,093
Balenciaga 9,715
Bottega Veneta 9,385
Longines 7,058
Marni 7,019
Omega 6,716
Ferragamo 6,511 Unit: Post
Source: CIC luxury panel data in Q1 2011
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P13

20. Chapter II: Know
2.1.2 Brand IWOM Health Matrix
Regarding a brand’s IWOM health, among the top 20 luxury brands, Chanel enjoyed both
high buzz volume and sentiment. Louis Vuitton had the most buzz volume but was
relatively weak in online sentiment.
Figure 2-2 IWOM Health Matrix
100% Balenciaga
Miu Tiffany Burberry
BV Miu Prada Coach
Marni Hermes
Rolex Chanel
95% Armani
Ferragamo
Dior
NSR
90% Cartier
Omega
Gucci
LV
85%
Longines
IWC
80%
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000
Buzz volume
Source: CIC luxury panel data in Q1 2011
NSR= (Positive Post – Negative Post)/ (Positive Post + Negative Post)
* Different colored areas were divided by the average of NSR and buzz volume of top 30 brands
IWOM Health Matrix: a comparative analysis across selected brands/products: X axis
(horizontal axis) stands post number, Y axis (vertical axis) refers to buzz sentiment (higher
NSR means more positive). The position of every brand is determined by the buzz volume
and net sentiment rate (NSR) of the brand. For the brands with high NSR but low buzz
volume, they may need to improve marketing communication to consumers and spread
their good reputation more effectively; for the brands with high buzz volume but low NSR,
they may need to focus on improving consumer satisfaction and enhancing the brand buzz
sentiment.
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P14

21. Chapter II: Know
2.1.3 Content Exploration for Luxury Negative Comments
In the luxury category, negative comments are normally associated with counterfeits,
product quality and design, as well as things like service and celebrities.
The counterfeit issue and “street bag” are most associated with Louis Vuitton, Gucci and
Coach. For product problems, leather goods and watches face the most complaints. Poor BA
service and unpleasant shopping experience are associated with most famous brands.
Figure 2-3 Negative Content Analysis
Counterfeit Related Product Related Others
• Counterfeit
• Quality issue • Poor BA service &
• “Street bag” (too
• Don’t like the taste of shopping experience
common to see on the
design • Celebrity crisis
streets)
Sample Quotes: Sample Quotes: Sample Quotes:
说实话LV就算是个好牌， Gucci的质量差啊，我的包 我在恒隆买的LV有染色问
在中国也被糟蹋了，A货 没用几次，拉链尾部的金 题去换，一个叫Olivia的服
太多了，我背个真的出去 属就掉下来了//Gucci's bag 务员，态度傲慢强硬，说
都没劲了。// To be frank, quality is poor. My bag's 我完美主义// I found my
there are too many zipper was broken with just LV bag had colored handle. I
counterfeits of LV in China, a few usage. Link want to change the bag,
which does not make me but a BA called Olivia was
look good even I carry a arrogant and did not let me
real one. Link to change the bag. Link
你看大街上连卖菜的包包 觉得coach包和LV包怎么那 当年你再嚣张跋扈拿宗教
也有双G标志时候你觉得 么难看// I feel Coach and 当设计都没人管你，因为
买这个牌子还有意思么 LV really ugly. Link 能给DIOR赚的盆满钵满。
//Gucci has become the 现在借机fire你也是虚张声
street bag. Link 势，多年前因为John先生
惊世骇俗的破坏性设计而
起死回生//Dior leveraged
John Galliano to revive.
Now he is fired. Link
Note: the volume chart indicates the buzz volume of negative posts
Source: CIC luxury panel data in Q1 2011
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P15

22. Chapter II: Know
2.1.3 Luxury Category Buzz Ranking
Leather Goods (Bags) are most discussed among Chinese consumers, followed by shoes and
fine jewelry. Bags are popular in China because they are durable and functional.
Figure 2-4 Luxury Category Buzz Ranking
Leather Goods (Bags) 79,649
Shoes 31,718
Fine Jewelry 16,489
RTW 13,420
Watches 12,514
Accessories 10,615
Sun Glasses 4,567 Unit: Post
Source: CIC luxury panel data in Q1 2011
2.1.4 Buzz Drivers Ranking
Price is the most buzzed topic by Chinese luxury consumers, followed by style, celebrity and
overseas purchase. While discussion of the brand story/history is low, it is in line with the
developing status of the luxury category in China at this stage.
Figure 2-5 Top 10 Buzz Drivers Ranking
Price 19,857
Style 8,666
Celebrity 6,575
Overseas Purchase 6,375
Advertisement 3,505
Quality 2,731
Service 2,405
Counterfeit 1,764
Designer 1,609
Unit: Post
Brand Story/History 90
Source: CIC luxury panel data in Q1 2011
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P16

23. Chapter II: Know
2.2 Purchase Driver
Given the fast growth of the luxury category and China’s diversified market, we have
observed different typologies with different motivations and behaviors. Based on the IWOM,
Chinese luxury consumers are mainly divided into 4 types:
• Aspirational Buyer: Most are college students and white-collar; very price sensitive.
Another interesting insight we observed amongst aspirational buyers is an increased
likelihood to purchase accessories of premium and famous luxury brands. This
phenomena is called ‘Big brand, small category’ (大牌小物).
• Quality Pursuer: Purchase luxury products in search of fine workmanship and quality.
• Status Seeker: Prefer famous brand with big logos to show their status.
• Trend Setter: Younger group, willing to purchase trendy but lower awareness brands.
Use luxury brands to show their identity and individuality
Figure 2-6 Purchase Driver by Four Consumer Types
Aspirational Buyer Quality Pursuer Status Seeker Trend-Setter
1. Style & design
1. Price 1. Quality 1. Brand awareness
2. Price
2. Style & design 2. Style & design 2. Style
3. Quality
3. Brand awareness 3. Price 3. Quality
4. Exclusivity
Sample Quote： Sample Quote: Sample Quote: Sample Quote：
我最贵的包包也不到 我也不是名牌的疯 炫一下很少出现在55 看到Sergio rossi了，呵
5000哦，我的口号是 狂追求者。就是自 上的大牌ETRO、 呵，这个牌子我也很喜
理性败家// My most 己用东西很注重品 GUCCI、PRADA, 欢，设计很大气,鞋子很
expensive bag is lower 质和质感// I’m not MIUMIU等// Show off 舒服，国内知道这个牌
than 5,000 RMB. My big brand fans, my famous luxury 子的人不大多//
slogan is purchasing quality is most brands, such as Gucci, Although most of Chinese
luxury products import for me to buy Prada, Miu Miu, etc. people do not know
rationally Link products. Link Link Sergio Rossi, I like it. It
has good design and
comfortable. Link
Note: the number means the priority of purchase drivers
Source: CIC luxury panel data in Q1 2011
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P17

24. Chapter II: Know
2.3 Differences between Chinese and Western luxury consumers
2.3.1 Chinese Luxury “Shai” Culture
Chinese luxury consumers are keen to show off (“SHAI” 晒) their luxury products and trendy
lifestyle.
Figure 2-7 Chinese Luxury “Shai” Culture
Knowledge
In the know Show I know
(very knowledgeable and (very knowledgeable and
not so willing to show off) willing to show off)
Don’t know & can’t show In the show
(limited knowledge and (limited knowledge and
not so willing to show off) willing to show off)
Showing off
Note: Developed markets Vs. developing markets in Asian countries
Evolution of Chinese luxury “Shai” Culture
Chinese “Shai” culture evolved with the development of the luxury market in China. Over
time, the form of “Shai” is being consistently enriched. Generally, there are three stages:
Shai Product, True Man Show (真人秀) and Shai Lifestyle.
Figure 2-8 Evolution of Chinese Luxury “Shai” Culture
Shai The original appearance of “Shai” –
Product showing off your purchasing power
The updated version
of “Shai” product – True man
Show
showing off your
(真人秀)
expertise & creativity Very emotional –
Shai showing off your overall taste
Lifestyle
(what’s your life looks like)
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P18

25. Chapter II: Know
I. Product Shai
The original expression of “Shai” - showing off your purchasing power.
To “Shai” a product is one of the favorite online behaviors in the luxury / fashion category.
Given that Chinese luxury consumers are still in the preliminary stage (“in the show” stage),
to “Shai” products becomes a very popular way for them to show off and learn more about
the luxury category from other consumers’ “Shai”.
In a typical product “shai”, there are pictures of the product, normally including the whole
collection (全家福), followed by a single picture for each SKU. In addition, it may include
some introduction of the product and emotional sharing of personal shopping experience
(败家经验分享).
“Building floor” is commonly used by luxury Shopaholics to continuously shai their ever
expanding collections. (“Shaiers” would write a summary on the topic post, which is easier
for “Shaiees” to view their interested topics). The regular update of “shai” can consistently
attract people’s awareness.
Figure 2-9 Building Floor Culture of Product Shai
Top 10 topics:
P1: Gucci bag, Coach necklace and bag
P2: Tissot watch, Biotherm skincare products
P3: Swarovski necklace
P4: Zhoudafu bracelet
“Building P5: Bally men’s bag
Floor” P6: LV Palermo PM
P8: LV Neverfull
P9: True Man Show for LV Neverfull
P11: Gucci key bag
P12: Giorgio Armani sunglass
Link
Virtual Luxury Shopping Basket
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P19

26. Chapter II: Know
II. True man Show (真人秀)
The first stage in the evolution of “Shai” product – showing off your expertise and creativity.
“True Man Show” or Live Demo is an emerging way to “Shai” products. Netizens not only
shai the product but also show the real efficacy and personal taste of dressing up. Due to its
tangible efficacy, it attracts significant popularity among luxury/fashion fans and has
become a new means of expression in the luxury/fashion category.
It has also been observed that in the “True Man Show”, netizens are more willing to share
their opinions and interact with others’. In this regard, it could be leveraged in brand
campaign ideation to broaden brand awareness and increase consumer engagement.
Figure 2-10 True man Show
DIY Outfit Matching Show Decoding of Fashion Trend
Sample quote
Sample quote:
Subject: [V] 2009秋冬教你如何打扮''色彩
Subject: 十一出游SHOW搭配 Link // My
搭配''Link// Teach you how to wear in fall-
showcase of outfit for National Day holiday
winter
outing
Topic post:有些MM总认为色彩堆砌越
Re:就喜欢这样的贴，既养眼又叙事清
多，越“丰富多彩”。集五色于一身，
楚，支持美女继续发贴// I love this post
for it’s not only an eye candy but also good 遍体罗绮，镶金挂银，其实效果并不
好。 // Some girls hold that the more
learning for us.
colors they put on, the more fabulous look
they will get. However, the fact is quite the
opposite.
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P20

27. Chapter II: Know
III. Shai Lifestyle
“Shai Lifestyle” talks to the emotional side of luxury consumers – showing off their overall
taste. Essentially, it’s a question of what your luxury life looks like.
On top of product related “Shai”, Lifestyle related “Shai” is also very popular in luxury /
fashion category, including “street shots” or “self-shots”. The photos are mainly about
people’s fashion and luxury lifestyle, such as night life/clubbing, travel and stylish hobbies.
Lifestyle related “Shai” is a hot trend in China. Brands could consider collaborating with
lifestyle communities and leveraging the emerging microblog and SNS platforms to
maximize the influence, which would resonate well with luxury fashion consumers.
Figure 2-11 Lifestyle Related Shai
Street Shot Night Life Hobbies Travel
Sample quotes: Sample quotes:
Subject: 9月北京街拍 全是漂亮的MM Link
三亚圣诞归来，碧海蓝天+亚龙湾+大东海
//September Street Snapshot in Beijing, all
+蜈支洲+西岛, 实在太棒了 (Link) // Just
the pretty girls.
come back from Haina， it’s really great!
Re:不错哦，都好潮啊// Good. They are so
fashion.
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P21

28. Chapter II: Know
2.3.2 Live Runway Broadcasting Culture
Live runway broadcasting is a new form for Chinese netizens to keep in touch with fashion
trends. Before the emergence of the microblog in China, runway live broadcasting was on
BBS. Now runway live broadcasting is hot via microblog thanks to imbedded pictures, videos
and real-time interaction.
Case Study: Burberry Beijing Show
Burberry broadcast its fashion show for Burberry Prorsum in Bejing on April 13th 2011 and
invited Chinese celebrities Su Hong and Cheng Kung to run the brand account, posting
photos and video with descriptions to promote interaction with netizens. In addition,
designer Christopher Bailey answered netizens questions about Burberry, which attracted
over 10,000 retweets.
Figure 2-12 Burberry’s 3D Fashion Show in Beijing
Sample quotes of Netizens Feedbacks:
我看的触目惊心的 非常震撼 Burberry和Keane真的是很好的结合 很硬朗很英伦 Link //
I’m impressed by Burberry. It’s great, Burberry launched a typical British style with Keane.
我对这个品牌所传达理念的认识也翻新了 Link// I get new understanding of the brand
culture of Burberry from this fashion show.
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P22

29. Chapter II: Know
2.3.3 Luxury E-commerce Platform
A host of third party e-commerce platforms emerged in 2010. Emporio Armani also
launched their first Chinese official online store. The third party e-commerce platforms
provide luxury products with big discounts to attract consumers. The safe payment system,
mature delivery service and variety of promotions enhance the shopping experience.
Emporio Armani’s e-commerce site faces some common problems that branded e-
commerce has previously encountered in China; the price is not attractive because the
product price is same online and offline, less product choice and the lack of luxury, in-store
shopping experience also affect sales.
Figure 2-13 Online Luxury E-commerce Platform
Emporio Armani E-commerce Platform Third Party E-commerce Platform
Emporio Armani launched Chinese online
store on Nov 26th 2010
Source: CIC
Case Study of Third Party E-commerce Platform: Meici
Meici is an e-commerce website selling luxury products at a discount. Meici also has Luxury
Care , which provides professional maintenance service for luxury products, including
cleansing, color care and repair service. Its maintenance service is popular because luxury
brands do not provide maintenance service in China. Furthermore, Meici set up a reliable
e-commerce platform; authenticity of products guaranteed, fast and nationwide logistics
system and return or refund policy within 7days.
Meici Ecommerce Link Meici Luxury Care Link
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P23

30. Chapter II: Know
2.4 Overseas Purchase
2.4.1 Overseas Purchase Overview
As ever larger numbers of Chinese consumers travel overseas, they recognize that certain
products are significantly cheaper abroad. One netizen claims that a Prada bag is 12,600
RMB in Beijing but it only 795 EUR (7,398.75 RMB) in Europe (Link). It is more than just price
that has netizens talking though. They mention that there is more choice, more styles and a
better shopping experience.
Of all the destinations, Hong Kong is the most mentioned specially in relation to shopping.
Strategy is also popular when netizens discuss the shopping in Hong Kong. The second
destination for luxury shoppers is the US, where most netizens leverage business trips to
shop and will discuss their preparations before traveling. Paris is the third most popular,
regarded as an extremely fashionable and charming city with a good shopping environment.
However, in line with the new tax policy, the price difference between HK and the Chinese
mainland is becoming smaller. Japan, Korea and Singapore are becoming increasingly
popular shopping destinations for Chinese consumers. Duty free shopping (DFS) at the
airport is the most mentioned in relation to tax free shopping and credit card promotions.
Figure 2-14 Emporio Armani Price Difference: China Vs. France
China France
China: 3,300 RMB
France: 250 EUR
Exchange Rate:
1 EUR=9.3066 RMB
250 EUR= 2,326.65 RMB
Price difference=
3,300-2326.65=973.35 RMB
肩背包 Sac porté épaule
¥ 3,300.00 EUR 250.00
Source: Ecommerce of Emporio Armani
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P24

31. Chapter II: Know
2.4.2 Daigou: Types of Purchasing Agent
The majority of people are not actually able to travel overseas as frequently as they’d like. So,
purchasing agents (Daigou, “代购”) are emerging quickly in China. Based on scale and motivation,
purchasing agents can be divided in to three types: Amateurs, Specialists and Masters.
Figure 2-15 Three Types of Purchasing Agents
Profit-driven
Masters
(24/7 and long term)
Specialist
(regular and
long term)
Amateurs
(random and
one off)
Relationship-
driven
Individual Organization
Source: CIC
Note: The bigger the circle, the higher the visibility/ buzz volume
2.4.3 Comparison of Three Purchasing Agents
Masters and Specialists are the main focus of netizen’s discussion of online purchasing agents
because they provide a mature purchasing model and a wider variety of brands and products.
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P25

32. Chapter II: Know
Masters Specialists Amateurs
• B2C sites with suppliers • Individuals with • Individuals travelling
Who abroad constant overseas overseas occasionally
connections (e.g. family
living overseas)
• Provide information and • Information on • Information can be on any
direct purchase on own purchasing agent sub- site or forum
Where e-commerce platform forums portals, lifestyle • Most offline
sites or beauty verticals
• Both online and offline
• For profit • Make a living or subsidize • Out of goodwill/ friendship
Why they’re other work
• Sometimes also involve
good relationship
• Set menu: comprehensive • Provide a list of brands/ • As needed. No menu
product catalogue on own products • Price tag
platform (e-commerce site) • Sometimes provide
• A la carte: browse products personal recommendation
What & from external sources (e.g. • Buyers sometimes can
How brand’s own site) and then order items they want
order from purchasing • Very little promotion
agent site
• Various types of promotion
2.4.4 Tax Policy Influenced the Daigou Price
China custom announced the new tax policy for “personal postal articles” from 1st
September 2010. The inward/outward tax for “personal postal articles” was adjusted. The
lowest duty-free allowance is adjusted from RMB 500 to RMB 50 at one time
Daigou price was hugely influenced and lots of taobao stores stopped their Daigou business
or raised their Daigou price already.
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P26

33. Chapter II: Know
2.5 Counterfeit Issue
2.5.1 Why do people purchase counterfeit luxury goods?
Counterfeits are an inevitable topic when talking about luxury market in China. Based on the
IWOM content, it’s observed that Chinese counterfeit buyers had various motivations. For
brands though, some of these fake buyers can be converted to authentic luxury consumers.
Can’t afford, but driven by vanity
“买不起 买买山寨的 过过念头，虚荣心 Like the design, but not willing to afford the
啊虚荣心～ (link) // I can’t afford. Just price of authenticity
bought a counterfeit due to vanity.”
“俺看上真货的款式,看不上真货的价格 SO
我买个假的. 款式和价格我都看的上!! (link)
// I like the design and pattern of real LV. But I
don’t like the price. So I’d like to buy the
counterfeit which had good design and
acceptable price”
No brand awareness
Counterfeit
“有的人(比如很多阿姨)就压根不知道 Buyer
那个是LV,只当是个寻常包就买了背了
(link)// some people, they have no brand Own both authentic and
awareness at all. They just take the counterfeits
counterfeit as an ordinary bag.” “真的也有，假的也要.真真假假
很好玩啊(link) // I owned both
the real ones and counterfeits. It’s
interesting to mix use the real and
the fake.“
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P27

34. The Voice of Luxury: Social Media and Luxury Brands in China

35. Chapter III: Participate
Chapter III
Luxury Brands Social Media Strategy
3.1 Luxury Brands on Weibo
3.1.1 Luxury Brands Weibo Buzz Overview
Weibo (microblog) has emerged as an important channel for real-time information updates,
recently capturing the attention of the world’s leading luxury and fashion brands. In
October 2010, Louis Vuitton became the first global fashion brand to launch a microblog
presence in China. In Q1 2011, we have witnessed a rapid build up of luxury brands on
Weibo, including Gucci and Burberry. Among the top 20 most discussed luxury brands on
the Chinese Internet, there are 8 luxury brands that have launched official accounts on Sina
Weibo. BBS remains an important channel for listening but Weibo also facilitates
participation.
Figure 3-1 Top 20 Luxury Brand Buzz Ranking by Tweet
Ranking Brand No. of Mentions Brand Account (Y/N)
1 Chanel 593,075 N
2 Dior 311,211 N
3 Gucci 253,232 37,548 followers
4 Hermes 236,208 N
5 Prada 204,298 N
6 Burberry 188,860 152,120 followers
7 Armani 92,568 N
8 Tiffany 89,582 N
9 Cartier 88,312 56,496 followers
10 IWC 80,862 1,619 followers
11 Coach 49,475 845 followers
12 Balenciaga 40,963 N
13 Louis Vuitton 38,917 99,491 followers
14 Rolex 36,706 N
15 Omega 31,388 N
16 Ferragamo 27,663 N
17 Longines 26,600 17,408 followers
18 Miu Miu 26,017 N
19 Bottega Veneta 12,767 4,016 followers
20 Marni 4,167 N
Data source: CIC Weibo tracking, Jan - May 2011.
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P28

36. Chapter III: Participate
3.1.2 Luxury Brands Account Performance
Among the top luxury brands with official accounts on Sina Weibo, Burberry generates the
most engagement, that is, more retweets and netizen comments than their competitors.
Much of this was driven by its Beijing fashion show and the live runway content released via
its Sina Weibo account. Louis Vuitton also attracts high participation and enjoys the highest
retweet rate return from their activity due to effective content and strong brand awareness
(the most well-know luxury brand in China).
Figure 3-2 Luxury Brands’ Weibo Account Performance Overview, Jan-May 2011
Burberry 43,001
5,320
Louis Vuitton 18,067
4,142
Gucci 9,512
3,207
Longines 4,465
3,076
Bottega Veneta 2,777
799
550 Num of Retweets
IWC
209 Num of Comments
Coach 176
69
Figure 3-3 Brand Account Retweet Rate and Comment Rate Overview, Jan-May 2011
Num of Tweets Retweet Rate Comment Rate
400
342
350
300 277 296
250
200 155
144
150
97
100 61 66 74 57
50 19 13 38
22 10 4 2
68 11 1
0 9
Burberry Louis Vuitton Gucci Longines Bottega Veneta IWC Coach
Source: CIC
Note: Retweet rate= Num of retweets/No. of tweets; Comment Rate=Num of comments/No. of tweets.
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P29

37. Chapter III: Participate
3.1.3 Content Analysis of Brand Accounts
Product introductions, celebrities & designers, fashion events and sponsorships are the most
common content produced by luxury brands. In addition, online campaigns employing the
“@friends” tactic is also common. For example, Longines launched a series of incentivized
retweet campaigns about tennis; while Coach launched emotional campaigns on Mother’s
Day.
For fashion brands like Burberry, LV and Gucci, the content of articles are most focused on
fashion events and celebrities. Watch brands like IWC and Longines share category
knowledge, which is also an important tactic in releasing content that resonates with
netizens.
Figure 3-4 Content Analysis of Luxury Brands’ Account by Tweet, Jan-May 2011
Burberry
Louis Vuitton
Gucci
Longines
Bottega
Veneta
IWC
Coach
Average*
0% 20% 40% 60% 80% 100%
Product Introduction Celebrity & Designer Fashion Event & Sponsorship
Online Campaigns Store Promotion & Opening Brand Story
Charity Knowledge Sharing Others
Source: CIC Weibo Tracking
Note*: Average refers to total 7 brands average.
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P30

38. Chapter III: Participate
Retweet Rate by Topic by Brand
In terms of retweet rate, charity, fashion events and store promotions are the most popular
amongst luxury brand accounts. Brands could consider releasing more content relating to
fashion events in order to attract netizens’ attention and increase their weibo exposure.
Figure 3-5 Retweet Rate by Topic by Brand, Jan-May 2011
TTL Louis Bottega
Topic Burberry Gucci Longines IWC Coach
Brands Vuitton Veneta
Product
74 57 330 72 6 36 12 6
Introduction
Celebrity &
64 52 272 85 4 26 8 2
Designer
Fashion Event &
109 323 331 41 8 57 4 0
Sponsorship
Online Campaigns 14 N/A N/A N/A 26 N/A N/A 1
Store Promotion
90 36 336 100 14 49 6 N/A
& Opening
Brand Story 43 N/A 146 28 N/A 37 4 0
Charity 175 N/A 644 51 3 N/A 2 N/A
Knowledge
6 N/A N/A N/A 7 N/A 5 N/A
Sharing
Others 50 17 260 13 2 N/A 6 0
Retweet Rate: average num of retweets per tweet
TTL Brands are the average of the 7 luxury brand
Source: CIC
Fashion Event Celebrity & Designer Product Introduction
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P31

39. Chapter III: Participate
3.1.4 Brand Owned Weibo Followers Analysis
For luxury brands, it’s important to have the both quantity and quality of followers. For
example, Bottega Veneta enjoyed a relatively high proportion of quality followers; those
whose accounts have more than 100 followers. A high-quality follower group helps branded
weibo accounts with reach and exposure of their content.
Figure 3-6 Brand Weibo Followers’ Breakdown by Num of Second Layer Followers
Followers >200 Followers 101~200 Followers 51~100 Followers 10~50 Followers < 10
100%
15% 12% 12%
19% 21% 17%
27% 28%
80% 16%
29%
28% 33%
36% 16% 18%
60% 35% 27%
18%
17% 21% 15%
40% 19%
18% 15%
18%
19%
17% 19%
17% 13%
20% 15%
14% 34%
19% 22% 19%
15% 14% 17%
12%
0%
Average Burberry Louis Gucci Longines Bottega IWC Coach
Vuitton Veneta
Followers Num 152,120 99,491 37,548 17,408 4,016 80,862 845
Launch Time 2011.2 2010.10 2011.1 2010.11 2011.4 2011.3 2011.4
Source: CIC Weibo tracking; random sampling of brand account followers. (API data access of followers profiles)
Note: Average refers to total 7 brands average.
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P32

40. Chapter III: Participate
3.2 How do luxury brands utilize social media?
3.2.1 General Tactics
Generally, brands can develop digital tactics in relation to the following perspectives:
Platform (where you launch the campaign), People (who you target and leverage to help
communication and broadcast) and Culture (the hottest trends, content and behavior).
• Brand’s campaign can utilize multiple
Platform & Channel: social media platforms, including
Multi-channel microblog, blog, BBS, video sharing etc.
Broadcasting • BBS good for listening; microblog good
for listening, engagement and viral.
People: Culture:
Efluencers Hot Online Culture
• Fashion editors and • The diversified “Shai” culture
celebrities are good choices • Creative “DIY” culture
for luxury brands to leverage • Live broadcasting
with campaign activity,
especially when it comes to
their microblog campaign.
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P33

41. Chapter III: Participate
3.2.2 Case Study: Tweet Diffusion Model for Burberry 3D Fashion Show
It’s interesting to look at the tweet’s journey through the social network. In this case,
Burberry posted a warm note about a 3D fashion show in Beijing via Sina Weibo, which
generated 854 retweets, 104 comments and achieved a total exposure of over 3 million
netizens. From the below tweet diffusion model, we can identify efluencers’ performance
(e.g. “全球热门排行榜”) and evaluate their effectiveness in spread of brand’s tweet.
Figure 3-7 Analysis Tweet Diffusion Model
Layer 7
Layer 6
Layer 5
“The famous British band, Layer 4
Keane will attend the event
@Burberry. They will have Layer 3
their first show in China in Layer 1
Burberry’s Beijing event on
Apr 13th, so as to show the
close relationship between
Burberry and British music.
Tom Chaplin, singer of Keane
made a special video for
Chinese fans” Layer 2
Layer of % of total Exposure
Exposure Layer Retweets % of Retweet
Followers Contributed
Original 133,274 4.28% 1 324 37.9%
1st 2,525,826 81.04% 2 444 52.0%
2nd 247,868 7.95% 3 47 5.5%
3rd 173,247 5.56% 4 12 1.4%
4th 23,910 0.77% 5 18 2.1%
5th 8,570 0.27% 6 6 0.7%
6th 2,913 0.09% 7 3 0.4%
7th 1,146 0.04% Total 854 100%
Total 3,116,754 100%
Source: CIC
Note: Tweet Exposure = total number of direct followers + Nth (n>1) layer followers of whom did the retweet
% of total Exposure Contributed= each layer’s followers/ total followers
% of Retweet = Each layer’s retweets count/ total layers’ count;
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P34

42. Chapter III: Participate
3.3 Social Media Strategies/Marketing for Luxury Brands
3.3.1 Offline to Online
Luxury brands can increase brand awareness and make a connection with consumers
through the “O2O” campaign approach.
Figure 3-8 The cycle of “O2O” scenario:
Brands can leverage online
platforms to promote offline
campaigns
Brand offline campaigns Online platforms
Increase awareness &
Making the connection
Offline participants would shai
their experience and share
feedback on online platforms
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P35

43. Chapter III: Participate
3.3.2 How to Build Brand Relationship with Social Media?
As Chinese social media platforms differ in various ways, luxury brands should take
advantage of the particular strength of the platform for different marketing strategies.
Figure 3-9 Social Media Approach for Luxury Brands
Popular Microblog/ Fashion Sites & Brand Fans Club
Video Sites Premium SNS (e.g. Weibo brand
(e.g. Weibo, Youku) (e.g. Yoka, Liba, P1.cn) account, Douban fans
group)
• Mass awareness • More relevant target
distribution groups • Very focused target
• Mainly target • More sophisticated group
aspirational luxury consumers • Brand users and
consumers • Social elements with brand fans
special focus on • Fan management or
relation building. CRM
Broad Awareness & Appeal Emotional Attachment
Brand Appreciation
Sina Weibo & Youku P1.cn Fans Group
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P36

44. Chapter III: Participate
3.4 The Expansion of Weibo Presents New Opportunities and
Challenges for Luxury Brands
3.4.1 The Opportunities for Luxury Brands
With the expansion of the microblog medium in China, it brings new opportunities for luxury
brands to enhance their social media marketing and strategy.
I. Source of Celebrities on Weibo
Microblogging is largely personality-driven and the top ten accounts are celebrities and
other prominent individuals (Chinese actress Yao Chen currently holds the most popular
account in China, with over 10 million followers). As a result, the personal accounts of
fashion industry figures often attract more followers than the accounts of large fashion
brands themselves. Luxury brands could leverage the influence of celebrities and collaborate
with them in both awareness and engagement campaigns.
Burberry : Chen Kun and Su Hong turn over Burberry account on the Beijing 3D fashion show
Burberry announced that Chen Kun and Su Hong would report on its Beijing 3D fashion show in April
2011 via the Burberry Sina Weibo account. This tweet attracted 2,449 retweets .
Source: CIC
II. Branded Communication via Weibo: What’s the right voice for a luxury microblog?
From our perspective, the microblog is a humanized window into brand culture. It is
important for luxury brands to use an appropriate tone and content that is in line with their
brand image and position. This will help to protect brand image while building an emotional
bond with netizens and maintaining a ‘distance’ appropriate for prestige brands.
Video: Louis Vuitton City Guide, LV uses text
description with attached related video to show the
luxurious brand culture
Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P37

45. Chapter III: Participate
3.4.2 The Challenges for Luxury Brands
Microblogging also creates challenges for brands; from crisis management to followers
maintenance.
I. Brand Crisis Management
The microblog is an open platform and as such, it is a challenge for luxury brands to maintain
the proper image and publicly manage any crisis. When there is such a crisis, the viral nature
of the microblog medium will make the spread much faster than any other media channel.
Case Study: Dior John Galliano Case
On the 25th of February 2011, Dior’s chief designer John Galliano was arrested by French police. This
news rapidly spread on Sina Weibo and aroused a lot of discussion; over 16,000 tweets.
John Galliano被Dior炒鱿鱼了！消息被 John Galliano，英国的时装icon，因醉酒涉
确认了，惊人。大家还是要努力工作 及闹事及歧视犹太人言论被拘留，并在今
啊//It’s confirmed that John Galliano was 日被Dior公司宣布停职。 Link //John
fired by Dior. It’s shocking. Galliano was arrested by police due to abuse
Jewish and then was fired by Dior today
II. Follower Maintenance
With a growing number of followers, brands will spend more time on follower
maintenance. Luxury brands with an unmanageably large number of followers find it
difficult to build good interaction with the majority, which can reduce the followers’ brand
loyalty.
In addition, more and more brand accounts face the problem of ghost followers (僵尸粉),
which not only increases the cost of follower maintenance but is also detrimental to the
efficiency of brand broadcasting.
Note: Ghost Followers - Virtual followers are registered by software, its main purpose is to
increase the number of an account’s followers. Ghost followers generally post little content
and undertake little interaction with others. There are also some artificial “real followers”
with account information and the appearance of genuine activity. However, these accounts
are not legitimate and their purpose is the same with ghost followers. Source: CIC
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China P38

46. The Voice of Luxury: Social Media and Luxury Brands in China

47. About GroupM Knowledge
About GroupM China
GroupM is WPP’s consolidated media investment management operation,
serving as the parent company to agencies including Kinetic, Maxus, MEC,
MediaCom, and Mindshare.
GroupM is the global number one media investment management group.
GroupM employs more than a thousand people in eight cities across China.
With total media billings in excess of USD 4 billion (RECMA: 2010 Definitive),
GroupM is China’s top media communications group and the industry’s
biggest investor in syndicated and proprietary media research and
optimization tool development.
About GroupM Knowledge
GroupM Knowledge is GroupM’s think tank and knowledge management
arm in China. This unit is responsible for industry-wide thought leadership
research, exploring issues affecting the media industry in China; working
with syndicated research suppliers, and managing the Group’s proprietary
tools, research and systems. The unit also manages a media consultancy,
advising clients with specific media research requirements.
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China

48. About Other GroupM Knowledge Research Projects
 Project Deep Dive (PDD) 2011: GroupM proprietary survey on China’s lower
tier markets
 Digital Touch with TNS: Reveal China’s most effective touch points
 Mobile 360: Mobile phone as an effective communications touch point
 China’s Youth Research: To understand media consumption habits and
aspirations of Chinese youth
 LuxC: Understanding luxury car users and segmentation research
 ‘Big Bang’Eye Spy Research: Using eye tracking to evaluate effectiveness of
magazine and online ads
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China

49. Contact us
Shanghai:
28F, The Center, No.989, Changle Rd. Shanghai 200031 China
Tel: 021 – 2405 – 1293 / 94
长乐路989号世纪商贸28楼，上海, 200031, 中国
电话: 021 – 2405 – 1293 / 94
Beijing:
Room1202,12/F Hua Li Building, No.58 Jin Bao Street Dong Cheng District
Beijing 10005 China
Tel: 010 – 8523 – 3679
东城区金宝街58号华丽大厦12层1202室, 北京, 10005, 中国
电话: 010 – 8523 – 3679
Guangzhou:
8/F, Development Center, 3 Lin Jiang Road, Pearl River New City
Guangzhou 510623 China
Tel: 020 – 2881 – 8288
天河区珠江新城临江大道3号发展中心8楼, 广州, 510623, 中国
电话: 020 – 2881 – 8288
Contact us:
Lucy Zhang lucy.zhang@groupm.com
Futures Director of GroupM Knowledge
www.groupmchina.com
www.igroupm.cn (Q4.2011)
weibo.com/groupmknowledge
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China

50. About CIC
About CIC
CIC is China's leading social business intelligence provider. CIC enables
businesses to fully leverage the power of social media and (Internet Word of
Mouth) IWOM intelligence across the organization. Since coining the term
IWOM in 2004, CIC has pioneered the industry to help companies meet their
social media marketing and social business needs by providing customized
research, consulting services, syndicated reports, as well as technical
solutions and platforms all via an objective, third party perspective. In addition
to helping companies leverage social media intelligence for more informed
decisions, CIC is monetizing the social business industry in China by creating an
integrated social business support system.
CIC utilizes its own patent pending technology to capture millions of online
conversations and “makes sense of the buzz” by assembling them into easy to
understand intelligence and provides interpretation which informs strategic
decisions and leads to action. CIC gathers and mines over 100 million naturally
occurring consumer comments every month from a range of uniquely Chinese
social media platforms including blogs, BBS and social network sites and applies
its unique, China-derived methodology and indexes to provide a detailed and
comprehensive picture of the social media landscape and its implications for
business. CIC has well over 2 billion mentions of brands and products from well
over 1 billion consumer comments that have been indexed and archived.
CIC has strong, long term retainer relationships with multinational agencies and
Fortune 500 companies, including Nike, Pepsi, Intel, L‘Oreal Group, BMW, P&G,
Unilever and many more.
Copyright Statement
This report is copyrighted material owned by CIC. Any improper use of this
document or its content will be considered a violation of CIC IP copyright and
CIC has the right to take legal action.
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China

51. CIC white paper archive
Find more CIC white papers on our CIC slideshare site:
www.slideshare.net/CIC_China
2011: CIC 2011 White Paper: From Social Media to Social Business Topic 1: An Overview
of the Evolution of Chinese Social Media | view
2010: Chinese Consumer Report (in collaboration with Roland Berger) | view
2010: Internet word of mouth proven to have impact (CIC and R3) | view
2010: ExpoSay: Shanghai Expo tickets are the focus of intense buzz in China's Social
Media (Edition_1) | view
2009: Making Sense of IWOM
Topic 1: IWOM White Paper on the Role of Internet Word of Mouth in Driving
Purchase Decisions | view
Topic 2: How IWOM is generated and disseminated | view
Topic 3: How Brands Can Participate in Online Communities | view
2009: Chinese Consumer Report (in collaboration with Roland Berger) | view
2008: The Internet is THE community
Topic 1: The Chinese IWOM Landscape | view
Topic 2: Alternative Ways to Measure Internet Community Dynamics | view
Topic 3: The Diversity of Chinese Net Language | view
Topic 4: Reshaping the Relationship between Brands and Consumers | view
2008: Tuning into Sports IWOM | view
2008: Tuning into Notebook IWOM | view
2007: What's Driving Auto Buzz | view
2007: The Talk About Phones | view
2007: Word of Health: China | view
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China

52. Contact us
Shanghai:
Suite 108, Block A, UDC Innovative Plaza, 125 Jiangsu North Road
Shanghai, China, 200042
Tel: 021 - 5237 3860 | Fax: 021 - 5237 3632
江苏北路125号华联创意广场A栋108室, 上海, 200042, 中国
电话: 021 - 5237 3860 | 传真: 021 - 5237 3632
Beijing:
1006 / 10F, Block C, No. 60, Dongsihuanzhong Road, Chaoyang District
Beijing, China, 100025
朝阳区东四环中路60号远洋国际中心C座1006室, 北京, 100025, 中国
电话: 010 – 5908 0268
Contact us: info@cicdata.com
weibo.com/seeisee www.linkedin.com/companies/359113
www.douban.com/host/cic www.jiepang.com/cic
www.seeisee.com @cicdata
www.seeisee.com/sam
www.tudou.com/home/iwomchina CIC_CN
www.slideshare.net/CIC_China
© 2011 GroupM Knowledge & CIC The Voice of Luxury: Social Media and Luxury Brands in China

53. The Voice of Luxury: Social Media and Luxury Brands in China

54. www.groupmchina.com
www.igroupm.cn (Q4.2011)
weibo.com/groupmknowledge
Site: www.ciccorporate.com
Blog: www.seeisee.com
Founder Blog: www.seeisee.com/sam
IWOMmaster platform: www.iwommaster.com
IWOMdiscover platform: discover.iwommaster.com
IWOMexplorer platform: explorer.iwommaster.com
IWOMcooperator platform: cooperator.iwommaster.com
The Voice of Luxury: Social Media and Luxury Brands in China