Luxury brands can tap Asian "gateways"

10 May 2013

SINGAPORE: Global luxury brands are missing an opportunity to reach Chinese consumers travelling to the "gateway" shopping destinations of Hong Kong, Taiwan and Singapore because they are not digitally optimised in those locations, a new report has argued.

The thinktank L2 noted in its Digital IQ Index: The Gateways that Chinese consumers accounted for one third of global luxury consumption and that two thirds of their purchases were made outside mainland China.

But with the rising value of the euro, more are choosing to journey regionally to the aforementioned three territories. Chinese travellers are, for example, projected to account for 60% of luxury sales in Hong Kong in 2013.

L2's research, however, found that only 23% of prestige brands offered a mobile-optimised China site for use when travelling, while the visibility of Hong Kong and Taiwan sites on the Baidu search engine was poor, with two thirds of searches ("brand term + country") appearing outside the top three results.

The report also said that, despite digital and mobile fluency across the gateways, e-commerce and m-commerce remained under-developed. Just 10% of prestige brands supported e-commerce in Taiwan, and even less in Hong Kong and Singapore.

In addition, just 20% had a mobile-optimised site in Hong Kong and 15% in both Taiwan and Singapore.

More than half of luxury brands had local sites for Hong Kong (54%) and Taiwan (56%), but just 37% had an equivalent for Singapore. Language was also an issue, with one third of Hong Kong sites being in English, despite being the national language in Singapore.

Site functionality was generally limited, with only half the brands across the three markets supplying a dedicated customer service number, while facilities such as live chat, social sharing, ratings and reviews were less common.

L2 also noted the failure of the majority of prestige brands to maintain a dedicated YouTube channel in any of the three markets, despite APAC markets accounting for around 30% of global video views.

Data sourced from L2; additional content by Warc staff