Britain has become the hot global luxury retail destination, and online sales are key. Recent figures from McKinsey predict that online sales of luxury items will continue to rise, however they highlighted that 57% of British luxury brands suffer from not investing enough in e-commerce. More needs to be done to capitalise on the international appetite for British luxury. So how should these brands capture the hearts and minds of consumers in new markets? Key findings from our Luxury Report bring some clarity.
Oban International's LIME (Local In-Market Expert) network focused on local perceptions of British luxury brands and identified ways that marketers can improve digital marketing tactics and strategies on an international scale. The research focuses on countries with an established or emerging luxury market; China, Russia, India, South Korea, Poland and Thailand. The geographical scope of opportunity in the luxury market is vast, and the scale of competition reflects this. To succeed, brands need to establish their point of difference according to local attitudes, and this starts with doing comprehensive research into local searches to ensure that content reflects these trends.
Emerging markets, such as Poland and India, express very positive sentiments towards British brands. Indira, an Indian LIME says: “As the online shopping trend increases in India, many online shopping sites like Jabong and Myntra are beginning to sell British luxury brands.” However, the inclusion of preferred brands like Lee Cooper, Topshop and Topman calls into question how international companies define luxury. For some consumers, simply being imported from a more affluent country elevates a brand to the 'L' level. Messaging and strategy to convey true luxury will be key in these territories.
Conversely, in Russia, the frayed image of British brands needs darning. Anton, LIME for Russia, says: “I’m afraid the UK is not connected to luxury in the minds of average Russians. Luxury for us is France (perfume), Italy (clothes), Germany (cars), Japan (electronics), Switzerland (watches), and the US (software)." Clarity on brand values, identifying which products appeal and building effective marketing campaigns to drive online engagement and sales are fundamental.
It’s worth noting the report also found Chinese shoppers are more inclined to buy British on British soil. As a result, using locally optimised, visually rich media, such as video, live-streaming and using VR and AR technology, is an effective tactic to immerse and engage shoppers. Combining this with secret product reveals on native social platforms like WeChat should also be considered to encourage online spend on British brands.
Across these territories, the greatest competition is posed by other imported brands, particularly from Europe, alongside some native players. China’s luxury landscape is increasingly diverse. The profile of native luxury brands is rising, as demonstrated by the Chuang x Yi boutique in Shanghai which stocks exclusively Chinese luxury brands. In Poland, native luxury businesses also perform strongly. For Russia and emerging luxury markets like Thailand and South Korea, people prefer to buy goods from Western countries. They are viewed as offering higher quality, and consumers who buy these items get a sense of elevated social status. Conversely, the Indian market is more open and varied. There are significant but varied opportunities for British brands in all these markets, as long as they get their digital marketing strategies right.
Perhaps the most surprising finding from the report was that the 'Brand Britain' label doesn't have the authority that might be expected in most of the territories examined. Issues such as counterfeit goods, value for money, up-and-coming native brands and competition from other nations are affecting the label. These concerns must be acknowledged and met head-on. That said, there are still countries where the ‘Brand Britain’ label has real power. Sun, a LIME in South Korea advised: “In general, 'British' means high quality and reputable, as people in South Korea associate the label with heritage and tradition. British brands need to make the most of the association with the ‘British’ label to improve awareness and popularity amongst local consumers.”
Counterfeiting remains an issue in the region. Lei, in China points out: “Thanks to its popularity in China, Dunhill has the most counterfeit bags in the country." Brands need to ensure that their sites are visible to local search engines, that links are authoritative and that content, social media engagement and paid media contribute to building positive brand awareness that drives consumer purchasing. Burberry is cited as performing very well by LIMEs in Thailand, China and India, as is Carlton London, which appears above native brands in search in India.
Luxury brands may be thriving but they must ensure consistency of experience and brand feel across all consumer touchpoints to continue this trajectory. The growth of international e-commerce in countries such as India, Thailand and South Korea presents a particularly strong opportunity for luxury brands that are looking to grow in these markets.
Keeping all this in mind, the LIME top tips on how luxury marketers can successfully grow their business online in international markets are:
1. The ‘British Brand’ label should be carefully considered throughout marketing activation. Focus should be on quality and heritage – this is particularly important in South Korea.
2. Consumers are cautious about the authenticity of international luxury goods, so combine online and offline campaigns to showcase a consistent brand experience across platforms.
3. Rich media do well for luxury online – use locally optimised video, images and articles to engage in these territories.
4. Research online consumer searches in each market and make sure that content themes reflect and meet these local needs.
By Greig Holbrook, founder of Oban International
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