A new report by BNP Paribas said China will be the largest e-commerce market in 2014, and luxury shoppers in the country are even more receptive to digital commerce and marketing than their western counterparts. In May, L2 published the Digital IQ Index: Luxury – China report, which assesses the digital competence of 95 global brands in the Chinese market. The report found foreign brands had a lot of catching up to do in digital offerings in China. Sixty-one percent of brands in the study fell in the Feeble category and just 10% were gifted, a distribution weighted more heavily towards digital weakness than in other reports.
Chinese luxury brands, however, have a grip on digital. The five in the study averaged a Digital IQ score of 98, compared to 70 for the 12 U.S.-based brands in the study.
Another surprising revelation about how far behind brands were in the study was the dearth of e-commerce sites. Seventy-seven and 71% of Index brands have e-commerce enabled for the U.K. and U.S. respectively, while only 15% host e-commerce sites for China. That gap should be narrowed as China is expected to account for 50% of luxury purchases by 2020.