SL Site Performance in China Report

8/3/2019 SL Site Performance in China Report

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August 2011

Why Luxury Websites AreDisappointing Chinese Consumers

(And Why This Matters to You)


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WHY LUXURY WEBSITES ARE DISAPPOINTING CHINESE CONSUMER

Copyright Strangeloop Networks Inc. 2011 2

PREFACE

While many global markets today areflat or shrinking, China is booming. Thissuccess extends to luxury brands, whichare struggling to stay afloat elsewhere intodays tenuous economic climate.

In 2009 during the low point of theglobal recession the sale of luxurygoods in China grew by 16%. Analystshave forecast that China will comprise 20percent of global luxury sales by 2015,surpassing Japan as the worlds single

largest luxury market.

To leverage the popularity of Europeanluxury brands, labels like Louis Vuitton,Gucci, and Hermes have more than

tripled their bricks-and-mortar presencein mainland China. At the same time,however, many of these same luxurybrands are failing to deliver an optimalonline experience to their growingChinese market.

BRAND OWNERS IGNORETHIS DISCONNECT AT THEIROWN PERIL.

According to a recent McKinsey report,The internet has rapidly become thesecond most important consumer touchpoint for luxury categories suchas fashion.

And Chinese shoppers have not yetreached their peak of projected spending

Recent studies show that these shopperare moving online in unprecedentednumbers. Mainstream consumers ofluxury goods are getting younger.Three-quarters are under 43 years old,with more than half between the agesof 25-28. These shoppers are as tech-savvy and demanding as young peopleanywhere else in the world.

China being the second largest market in the world for luxurygoods means that no established or aspiring internationalluxury brand can ignore the Chinese market.

Ronald Degen, International School of Management (2009)


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KEY FINDINGS

At Strangeloop, we conducted a study of 100 leading international luxury brands websitesto determine how they perform for a typical visitor in urban China. (For details, seeMethodology at the end of this report.)

Average load time for a luxury goods website in Jiangsu,China: 16.2 seconds

Number of sites that were blocked or non-functional: 1(helmutlangjournal.com)

Percentage of sites that use a content delivery network(CDN) to accelerate page load times: 29

Among the five slowest sites, the number that use a CDN: 0

Among the five fastest sites, the number that use a CDN: 0

Proportion of sites with a specific Chinese URL: 3 out of 10

Percentage that offer a Chinese language option: 36

FIVESLOWESTSITES:

Escada - 58.811

Frederic Fekkai - 54.277

Movado - 49.657 Emanuel Ungaro - 44.742

Boucheron - 41.811

FIVEFASTESTSITES: Halston - 1.942

Fred Leighton - 2.259

Givenchy - 2.329

Gianfranco Ferre - 2.757

Mikimoto - 3.041


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WHY RETAILERS SHOULD BE CONCERNED ABOUT

THEIR ONLINE PRESENCE IN CHINA

THREE FACTORS ARECONVERGING TO MAKE CHINAA POWERHOUSE OF ONLINECONSUMER ACTIVITY:

1. China has emerged as a majorglobal consumer of luxury goods.

In 2010, Chinas luxury goods consumptionreached US$6.5 billion, maintainingthe worlds fastest growth rate for threeconsecutive years. [Goldman Sachs]

By 2015, China is expected to overtakeJapan as the worlds largest consumer ofluxury goods. And by 2020, Chinas luxuryconsumer base is expected to expand from80 million to 180 million people. [McKinsey]

THE ROLE OF THEINTERNET IN CHINA

In 2010, online sales accountedfor more than 10% of retail sales inShanghai.

This demonstrates the impact ofthe internet on ecommerce in moredeveloped markets. It is also anindicator of the future potential of onlineshopping in China. [DDMA]

One in four Chinese internet userswill not purchase a product beforeresearching it online.

Shanghai consumers reported thatonline information was the largestinfluence on the final decision for 34%of all products purchased in 2010.[DDMA]

Luxury brands, to continue or become successful, must winin China to continue winning in the rest of the world.

Ronald Degen, International School of Management (2009)


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2. Chinese consumers are goingonline in unprecedented numbers.

As of June 2010, China had 420 millioninternet users more than five times asmany as in India and nearly twice as manyas in the U.S. and it was adding 6 millionnew users every month. By 2015, there willbe more than 750 million internet users inChina. A significant number of these will bemobile internet users. [McKinsey]



PROFILING CHINAS LUXURYCONSUMERS: WHO ARE THEY?

Mainstream consumers of luxurygoods in China are getting younger.

Those in the 25-28 age range withmonthly incomes of more than 10,000yuan (US$1521) account for more thanhalf. While their European counterpartsare generally over 40, and those in theU.S. are over 60, Chinese luxury goods

consumers are primarily in the 18-50age group. This implies a far more rapidfuture growth in Chinas luxury goodsmarket than in those of Europe or theU.S. [World Luxury Association]

Traditionally loathe to offer their products directly online forfear of diluting their brand, many luxury brands arefinding theyhave little choice but to establish a robust online presence.

McKinsey, Understanding Chinas Growing Love for Luxury, March 2011


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3. Chinese shoppers have not yethit their projected peak of onlinespending.

We have only begun to see the impact ofChinese consumers on global ecommerce.Only a third of Chinas internet userscurrently shop online, compared withtwo-thirds in the U.S. Chinas online retailmarket expanded by 117 percent in 2009,from $19 billion to $39 billion. That makesit the worlds second biggest, after the U.S.

($156 billion). And it is expected to getmuch, much bigger. [source: iResearch]

PROFILING CHINAS LUXURYCONSUMERS: WHAT ARETHEY BUYING?

Chinese luxury goods consumersgenerally indulge in small personalitems, such as clothing, perfumes,watches, and leather goods.

Apparel is the most popular shoppingcategory in China, accounting for 36percent of Chinese consumer goodsspending. Personal digital productswere next, accounting for 29 percent.The most owned luxury fashion brandsin China are Lacoste, Valentino,Chanel, and Bally. The top luxurybeauty brands are Este Lauder,Lancme, and Guerlain.



Chinas online retail market expanded by 117 percent in2009, from $19 billion to $39 billion. And it is expected toget much, much bigger.


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Despite the rapid pace with which Chinese shoppers are moving to the internet, veryfew brands are investing enough in their websites to deliver the fast, convenient onlineexperience their customers are quickly learning to demand.

THE AVERAGE LUXURY WEBSITE TOOK 16.2 SECONDS TO LOAD.

Strangeloop conducted a study of 100 leading luxury brands websites to determine howthey perform for a typical visitor in urban China. (For details, see Methodology at the endof this report.) Our research found that the average home page took 16.2 seconds to load.This is eight times slower than the optimal page load time of 2 seconds, as defined both byusability expert Jakob Nielsen and by Forrester Consulting. [Forrester]

HOW WEBSITES ARE DISAPPOINTING

CHINESE CONSUMERS


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While most web users around the world use modern browsers, which are designed torender todays complex web pages faster, 60% of online shoppers in China use InternetExplorer 6. This is despite the fact that IE6 poses security risks for users and delivers a suboptimal online experience.

There are several reasons behind why the majority of shoppers still browse via IE6:

Over 90% of software in China is pirated, which deters users from upgrading theirsoftware and accepting browser updates.

Many commonly used Chinese websites have been constructed and tested to worksolely with IE6.

Online banking in China is exclusively via Windows and IE6.

While Microsoft has recently stepped up its efforts to eliminate Internet Explorer 6 worldwidvia its Internet Explorer 6 Countdown campaign, it is expected that IE6 will continue tobe installed by default in China for the next several years, until Windows 7 takes over theChinese market.

Clearly, site owners who want to reach the Chinese market are challenged to createmodern feature-rich, content-rich websites that perform quickly even on dated browsers.

MODERN EXPECTATIONS MEET OLD BROWSERS


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CONCLUSION: IMPLICATIONS BEYOND LUXURY GOODS

Companies need to understand the rapidly evolving role ofChinese consumers in the marketplace, and they need tobe prepared to deliver the premium online experience thatthese consumers demand.

By every measure, global ecommerce is exploding, and nowhere isthis growth more apparent than in China. The luxury retail market is avanguard for retail in general, and the performance of luxury retail sitesis a canary in the coal mine of Chinese ecommerce. Right now, thecanary is not healthy.

The average luxury website takes 16 seconds to load for a typical visitor in urban China.At the same time, web users in China are among the most demanding in the world: 75%expect websites to load in 3 seconds or less. [Gomez] These consumers expect fast,content-rich, feature-rich websites, regardless of the fact that the majority of these users arusing dated browsers that slow down page speed.

How do you evaluate the quality of the online experience you are delivering to users inChina? Ask yourself:

How fast does your website load for a typical visitor in urban China?

How does your site measure up to the expectations of a Chinese audience?

Do your websites and web-based applications perform as intended across thebrowsers, devices and networks used by consumers in China?

We have only begun to see the impact of Chinese consumers on global ecommerce.Businesses that embrace this audience, offer the most usable websites, and provide thefastest, most consistent performance will emerge as leaders in their category.

HOW FAST DOESYOUR WEBSITE LOAD FOR VISITORS IN CHINA?Request your free performance report today.

www.strangeloopnetworks.com/test-in-China


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This study used WebPagetest a third-party tool that simulates real-world browserbehavior to measure page load times from a real users perspective to test each siteshome page via the WebPagetest server in Jiangsu, China, as the site would appear to avisitor using Internet Explorer 7 on DSL.

In some cases, WebPagetest was not able to render a result. These instances arerepresented as null in the test appendix. Each site was tested 10 times and the medianrun used.

METHODOLOGY

ABOUT STRANGELOOP

This report was compiled by Strangeloop, a leader in providing Web Content Optimization(WCO) solutions that enable companies such as Petco and Visa to speed up the page loadtimes of their websites and enterprise applications. An early entrant in the WCO space, thecompany was the first to market an automated solution the Strangeloop Site Optimizer to tackle the core of todays performance problem as a service via the cloud. Strangeloop

was also the first company to integrate Googles SPDY protocol into its product offerings.Site Optimizer, which is also available as a hardware appliance, simplifies Web ContentOptimization from a lengthy and complex coding process into an automated function. Formore information, visit www.strangeloopnetworks.com.


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SOURCES

DDMA, The Influence Online Information has on Chinese Consumer Buying Behavior, 201http://www.ddm-asia.com/en/published_reports/onlineInfoImpactStudy/introAndObjectives.php

Forrester Consulting, eCommerce Web Site Performance Today: An Updated Look AtConsumer Reaction To A Poor Online Shopping Experience, August 2009

http://multichannelmerchant.com/whitepaper/0831_Akami_ecommerce_whitepaper/

Gomez, What Users Want from Mobile, July 2011http://www.gomez.com/wp-content/downloads/19986_WhatMobileUsersWant_Wp.pdf

Internet Retailer, What you dont know about browsers can hurt your conversion rate,February 2011

http://www.internetretailer.com/2011/02/15/what-you-dont-know-about-browsers-can-huyour-conversion-rate

iResearch, China Online Shopping Market Rapidly Develops in 2010, June 2011http://www.iresearchchina.com/view.aspx?id=9170

Jakob Nielsen, Website Response Times, June 2010http://www.useit.com/alertbox/response-times.html

KPMG, Luxury brands in China, March 2007http://www.kpmg.com/cn/en/IssuesAndInsights/ArticlesPublications/Pages/Luxury-brandsChina-200703.aspx

McKinsey, Understanding Chinas Growing Love for Luxury, March 2011http://www.mckinsey.com/locations/greaterchina/InsightsChina_LuxuryGoods.pdf

Ronald Degen, Opportunity for Luxury Brands in China, 2009http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1531562

World Luxury Association, Psychological Trends of Luxury Consumer Behavior on ChinasMainland, 2010

http://www.womenofchina.com.cn/html/report/1800-1.htm


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APPENDIX

COMPANY NAME WEBSITE USEOFCDN

FIRST VIEWLOAD TIME

Anna Sui http://www.annasui.com.cn/zh-cn/index.html No 10.122

Anne Klein http://www.anneklein.com/ Yes 32.439

Annick Goutal http://www.annickgoutal.com No 14.5

Asprey & Garrard http://www.asprey.com No 12.649

Audemars Piguet http://www.audemarspiguet.com/ No 0

Badgley Mischka http://www.badgleymischka.com/ No 4.3

Balenciaga http://www.balenciaga.com/int/en/Default.aspx?nav=/edition-exclusives/&lang=cntrad

No 4.443

Bally http://www.bally.com/ No 19.978Balmain http://www.balmain.com/ No 33.962

Barry Kieselstein-Cord http://www.kieselstein-cord.com/ No 16.499

Baume Mercier http://www.baume-et-mercier.com Yes 11.646

Bedat & Co http://www.bedat.com/ No 8.925

Bill Blass http://www.billblass.com No 7.807

Bob Mackie https://www.bobmackie.com/ No 23.66

Borghese http://www.borghese-asia.com/html/chi/index.php

No 19.905

Bottega Veneta http://www.bottegaveneta.com/ Yes 12.865

Boucheron https://www.boucheron.com No 41.811

Bulgari http://zh-tw.bulgari.com/ Yes 39.659Bulova http://www.bulova.com/ No 40.592

Burberry http://www.burberry.com/ Yes 11.982

Calvin Klein http://www.calvinkleininc.com Yes 3.781

Carolina Herrera http://www.carolinaherrera.com/ No 3.784

Cartier http://www.cartier.cn/#/home Yes 7.266

Cerruti http://www.cerruti.com/ No 0

Chanel http://www.chanel.com/ No 30.391

Chloe http://www.chloe.com/#/cht Yes 3.774

Chopard http://www.chopard.com/ No 11.569

Christian Dior http://www.dior.com/ file/prehome_new/index.html#

Yes 37.268

Christian Lacroix http://www.christian-lacroix.fr/ No 9.634

Coach http://china.coach.com/online/handbags/Home-14001-14500-cn

Yes 11.803

David Yurman http:/ /www.davidyurmanstores.com/tcn/default.aspx

No 12.899

Dolce & Gabbana http://chi.dolcegabbana.com/?__utma=1.402231214.1300987996.1300987996.1301004916.2&__utmb=1.2.10.1301004916&__utmc=1&__utmx=-&__utmz=1.1300987996.1.1.utmcsr=%28direct%29|utmccn=%28direct%29|utmcmd=%28none%29&__utmv=-&__utmk=223317915

Yes 28.911


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APPENDIX


FIRST VIEWLOAD TIME

Donna Karan http://www.donnakaran.com/ No 10.284

Dooney & Bourke http://www.dooney.com No 22.696

Ebel Ebel http://www.ebel.com No 39.964

Elizabeth Arden http://www.china.elizabetharden.com/ No 13.856

Emanuel Ungaro http://www.ungaro.com/ No 44.742

Escada http://www.escada.com/ No 58.811

Estee Lauder http://www.esteelauder.com Yes 0

Fendi http://www.fendi.com/#/cn No 8.991

Ferragamo http://www.salvatoreferragamo.it/cn/ No 11.559

Fred Joaillier http://www.fred.com/ No 30.961

Fred Leighton http://www.fredleighton.com/ No 2.259

Frederic Fekkai http://www.fekkai.com/ No 54.277

Geoffregy Beene http://www.geoffreybeene.com/ No 29.966

Gianfranco Ferre http://www.gianfrancoferre.it No 2.757

Giorgio Armani http://www.armani.com/ No 4.218

Girard-Perregaux http://www.girard-perregaux.com/home-zh.aspx No 24.168

Givenchy http://www.givenchy.cn/ No 2.329

Gruppo La Perla http://www.laperla.com Yes 44.8

Gucci http://www.gucci.com/cn/home Yes 13.265

Guerlain http://www.guerlain.com Yes 18.148

Guess http://www.guess.ca/ Yes 10.147

Halston http://www.halston.com/ No 1.942

Hanro http://www.hanro.com/ No 0

Harry Winston http:/ /www.harrywinston.cn/v2/tw/main.php?lang=zh-tw

No 4.028

Helmut Lang http://helmutlangjournal.com/ N/A 22.331

Hermes http://www.hermes.com/index_cn.html No 9.493

Jean Paul Gaultier http://www.jeanpaulgaultier.com/ No 0

John Galliano http://www.johngalliano.com/ No 12.73

Joop http://www.joop.com/ No 37.159

Judith Leiber http://www.judithleiber.com/ No 17.331Karl Lagerfeld http://www.karllagerfeld.com/ No 7.762

Kenneth Cole http://www.kennethcole.com/ Yes 13.232

L.A.M.B. http://www.l-a-m-b.com/ No 5.267

La Mer http://www.cremedelamer.com/ Yes 33.486

La Prairie http://www.laprairie.com/lp/zh_cn/main.html Yes 26.795

Lancome http://www.lancome.com/ No 12.471

Liz Claiborne http://www.lizclaiborne.com/ No 5.374

Louis Feraud http://www.feraud.com/ No 17.709


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APPENDIX


FIRST VIEWLOAD TIME

Louis Vuitton http://www.louisvuitton.com/cn/ flash/index.jsp?direct1=home_entry_cn0

4.888

Michael Kors http://www.michaelkors.com/ No 20.975

Mikimoto http://www.mikimoto.com.hk/en/home/index.htm No 3.041

Missoni http://www.missoni.com/ No 8.35

Montblanc http://www.montblanc.com.cn/index.php No 16.689

Montres Breguet http://www.breguet.com/cn/content/view/full/2 Yes 27.64

Moschino http://www.moschino.it/ No 3.821

Movado http://www.movado.com/ No 49.657Narciso Rodriquez http://www.narcisorodriguez.com/ No 5.486

Natori http://www.natori.com/ No 13.523

Nina Ricci http://www.ninaricci.com No 10.546

Oscar De la Renta http://www.oscardelarenta.com/ No 38.66

Patek Philippesa http://www.patek.com/ No 4.911

Piaget http://www.piaget.com.cn/ Yes 22.444

Prada http://www.prada.com/hans Yes 5.5

Ralph Lauren http:/ /global.polo.com/global/V2/default.asp?sto=532&cid=4&ab=int_fd_china

No 3.294

Randolph Duke http://www.randolphduke.net No 3.232

Ray-Ban http://china.ray-ban.com/ Yes 19.931Rolex http://www.rolex.com/zh-hant Yes 17.711

Shiseido http://www.shiseido.com.cn/ No 19.269

Tag Heuer http://www.tagheuer.com/index.lbl?lang=zh Yes 9.83

Thierry Mugler http://www.mugler.com Yes 8.931

Tiffany & Co http://www.tiffany.cn/ Yes 25.641

Tommy Hilfiger http://www.tommyhillfiger.com/ No 4.624

Valentino http://www.valentino.com No 16.061

Van Cleef http://www.vancleef-arpels.com/cn/van-cleef.html?zone=as

No 17.648

Vera Wang http://www.verawang.com/ No 6.335

Versace http://www.versace.com/cn No 16.334

Yohji Yamamoto http://www.yohjiyamamoto.co.jp/ No 1.954

Yves Saint Laurent http://www.ysl.com/ No 6.43

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SL Site Performance in China Report