Scott Galloway explains how the “staggering” size of China means it is the key to success for prestige brands
NYU Stern Marketing Professor and Founder of L2 discusses the findings of his new study ‘L2 Digital IQ Index’. He highlights how with more people online in China than in the US, Japan and Europe combined, any brands that are serious about e-commerce need to address the Chinese market. According to Galloway e-commerce, or “the biggest opportunity in prestige in a generation” is of particular relevance to China because so far destination stores have not created the buzz that they have in previous markets. He posits that just as in India the telephone market skipped land lines and went straight to mobiles, China may skip the process of ‘theatre retail’ and go straight to online. Moreover, he points out that a lot of the economic growth in China is going to be outside ‘tier 1 cities’, where big brands aren’t even thinking about building statement stores.
Galloway believes that so far beauty and the auto industry are outperforming the other luxury sectors, and brands that Galloway believes are doing it best include BMW, Mercedes, Lancome and Estee Lauder. Lancome have launched their own social media site, called Rose Beauty which specifically speaks to a Chinese market and already has 4 million users, and Estee Lauders are doing the seemingly obvious, but often overlooked, task of tailoring their product to the market, extremely well.