TOKYO: Luxury brands are in danger of neglecting prospects in Japan as they chase consumers in China, a study from L2, the thinktank, has warned.

The report, entitled Digital IQ Index: Japan, analysed the digital performance of 100 luxury brands – 95 international and five local – during February 2013.

It observed that only around one fifth of Japanese luxury consumers were "less interested" in spending on luxury goods while three quarters of luxury chief executives reported that the economic climate had had no effect on sales in that country.

This suggests that, while the demand is there, prestige brands have failed to grasp the opportunity presented by the rapid rise of ecommerce in recent years.

The channel has achieved an 18% compound annual growth rate between 1999 and 2012 – driven by younger consumers and men, both of which groups, L2 noted, over-index across digital channels.

But only 48% of luxury brands are selling online. And while a quarter of Japanese ecommerce sales now take place by mobile, again, less than half of prestige brands had a mobile site that catered to Japanese consumers.

Relatively little attention was paid to social media, with just 35% of luxury brands having a Japanese Twitter and 39% a dedicated Japanese Facebook page. This despite the online communities of such brands having some of the highest engagement rates in the region.

Over half permitted product sharing via social media but just nine shared to the Japanese social media site Mixi and these were mostly beauty brands. A similarly small number permitted users to post reviews and ratings, said the study.

Consumers wanting to speak to brand representatives in their own language had at best a 50-50 chance of achieving this, since only half of brands had a local customer service number.

Online video is another area where prestige brands could do more, suggested the report. Japanese consumers view 1.5 times the global average number of online videos but just 15% of these brands had a dedicated Japanese YouTube channel.

Data sourced from L2; additional content by Warc staff