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Episode Seven: Man And Machine
Brought to you by: IBM
Chinese shoppers love luxury brands, but until now their e-commerce experience has not always measured up.
"The market is changing fast and you don't necessarily know what is brewing for the next stage," said Angie Au-Yeung, who joined Richemont last year in the newly-created role of senior e-commerce manager, China. One of Ad Age's Women to Watch China 2014, Ms. Au-Yeung is responsible for growing online sales for Swiss-based Richemont's luxury brands including Cartier, Van Cleef & Arpels, Piaget, Jaeger-LeCoultre and Montblanc. Richemont also owns luxury fashion site Net-A-Porter.
An e-commerce pioneer, she oversaw digital and e-commerce for Lee Jeans in China before a stint as digital commerce director at Bleum Commerce, helping western brands sell online in China.
Today, she's addressing the e-commerce challenges luxury brands face in China, like the pervasive fear of buying fakes. That's a problem even for basics like shampoo, and becomes a major issue for shoppers spending thousands on a watch or pen from a prestigious brand. Here are Ms. Au-Yeung's tips for driving luxury e-commerce:
Fight fakes with information
Brands without a good direct-to-consumer site push consumers to look for information and products on third-party channels that are mostly unauthorized and often sell counterfeit products. "The first and most important step is always to have the official presence, a clear anchorage for brands to differentiate and further educate consumers against fakes," Ms. Au-Yeung said.
Create a brand experience that matches the store
Brand owners have struggled to develop digital platforms offering luxury customers an experience on par with retail channels. Technology advances like html5 help brands create user-friendly sites that offer a visually and "sensorially-rich experience" relevant to the brand DNA that works online and on mobile devices, she said.
Your strategy is digital
"Many [brands] still think e-commerce equates opening a Tmall store on Alibaba, while social media equates hiring a digital person to tweet a few times a day on Sina weibo and now on WeChat," she said.
Think at least mid-term, she advised. "Where do you see this going in three to five years? [Don't] just work out a three-year P&L projecting x% of growth each year. How about your plan for people and training, organizational structure and operations readiness to really cope with this growth?"
China is different; deal with it
Take payment and delivery. Many Chinese still pay cash on delivery--easy for groceries, but a security risk for both buyer and seller for ultra-expensive products. That's why in China "brands need to have a real open mind," she said. "Global best practices do not always apply in this market."
But don't panic
Learn to operate under pressure. "Many brands offer deep discounts when they really shouldn't, or they strategized online sales as a dumpster for overflowing inventory. Then how much marketing effort is needed to remedy the harm done to the brand?"
Her final tip for luxury e-commerce brands in China? "China is a picture yet to be painted. Be a little patient for your customers to mature, which will not take long."
The Ad Age Questionnaire
Home city: I was born in HK but I haven't figured out where home is yet.
Hobbies: Many. From museum musing to rock climbing – my latest venture.
First job: A 24/7 account executive in a PR agency. It was the perfect training, and I'm grateful for being able to have it from my first job.
Lived abroad: Europe, USA, Asia.
Best advice you've ever gotten: Love life and do what you think is right. And if you can't convince them, confuse them.
Biggest change you've seen in the industry: The change I'm experiencing now is luxury going digital, be it marketing or e-commerce, which brings another whole layer of ininteresting happenings into the market.