Screen shot 2013-03-28 at 5.45.04 PMIn a new study released today called “The Bling Dynasty,” HSBC examines how Chinese luxury consumption is shaping retail not just across China but neighboring Asian markets as well. Unsurprisingly, the study found that Mainland Chinese shoppers spend a significant amount of money on luxury goods while traveling in the region, currently accounting for 15 percent of Taiwan’s total luxury spend and 75 percent of Macau’s. In terms of buying  high-end pieces from the comfort of their own home, office, or wherever they have their smartphone or tablet, the Chinese are just as motivated to spend. From a $15 billion luxury e-commerce market in 2011 to a $20 billion one last year, the digital side of China’s “Bling Dynasty” is poised to see even more growth in 2013. Particularly when it comes to fashion. Unfortunately, global fashion brands aren’t as prepared as they need to be to handle the digital demand. In recent days, we’ve discussed fashion’s poor performance in social media and mobile in China, today we focus on organic and paid search.



At present, 70 percent of Chinese consumers search for luxury brands at least once per month, and 35 percent search at least once per week. Despite these high search volumes,  only four Chinese-language fashion sites (Burberry, Chanel, Louis Vuitton, Ports 1961) appear in the first page of organic results on Baidu, which handles 73 percent of China’s five billion daily search queries. On China’s second largest search engine, which handles 10 percent of Mainland searches, again, just four fashion brands (Chanel, Louis Vuitton, Ports 1961, Prada) had any first-page organic results. Paid search is another story. Just 37 percent of brands are engaging in paid search on Baidu and less than a third (30 percent) invest in Baidu Brand Links–in both cases, fashion trails every other prestige vertical.


Out of the 27 brands in our supplement, only Bottega Veneta and Coach purchase competitive ads against Hermès and Chanel, respectively. And because third-party retailers purchase so aggressively, brands control a mere six percent of paid search real estate for brand terms. What all of this means is that brands are relying far too heavily on the assumption that shoppers know exactly what brand they want when shopping online. While there are a fair number who do just want that Gucci shoe or that Tom Ford dress, there is an even greater number who find the right item through discovery–a descriptive but non-brand specific query that generates a mix of results, that leads to the right result. And while brands can’t guarantee that these queries will lead shoppers to their particular site, they can greatly increase the chances of this happening through smart paid search investments.


Daily Insights in Your Inbox

Edit your preferences or unsubscribe