Since February 2011, seven world-class luxury brands, most recently Cartier, have opened exclusive branded video channels through China’s leading Internet television site Youku.com, Inc. (NYSE: YOKU). Other luxury brands with exclusive presences on Youku include Louis Vuitton, Dior, Burberry, Gucci, Omega, and Mido.
The branded video channels are not the luxury brands’ first foray into online video marketing in China. Louis Vuitton first tested the waters in 2009, with low-key in-video ads on Youku. Marketing strategies grew more diverse in 2010. With Louis Vuitton opening dedicated pages for their products on Youku, Guerlain, Cartier, and Longines, among others, followed suit.
The start of 2011 saw a dramatic increase in online video campaigns by luxury brands, either through exclusive official channels or traditional in-video ads on Youku, or by partnering with Youku for live event webcasts. Burberry experimented with streaming a live webcast of its Milan Fashion Show on Youku in February; the brand’s official channel on Youku has since been viewed over one million times.
To date, half of the top ten brands on BrandZ, Millward Brown Optimor’s annual list of the world’s most valuable global brands, have invested in online video marketing campaigns through Youku. In addition to Louis Vuitton, Gucci, and Cartier, Chanel and Fendi, also both top BrandZ brands, have both begun placing in-video ads through Youku.
The World Luxury Association’s 2010-2011 Annual Report ranks China as the second-largest consumer market for luxury goods, accounting for 27% of the global market, ahead of the United States (14%) and second only to Japan (29%). The same report predicts that China will become the world’s largest market for luxury brands in 2012.
Chinese consumers of luxury items tend to be younger than is typical elsewhere, leading many luxury brands to make the Internet a key component of their marketing strategies. The overlap between luxury brands’ target demographic and Youku’s viewership demographic, which comprises young, educated urban professionals, is one of the factors that makes Youku an attractive choice for online luxury brand marketing.
“Luxury brands are highly selective in terms of the platforms they advertise on and their choice of Youku speaks to the perception of Youku as a premium platform,” said Frank Ming Wei, Senior Vice President of Youku. “Our proprietary content delivery network allows us to present these brands’ videos with the quality and reliability that are the hallmark of their own products, while our nationwide reach is helping these brands make inroads into second- and third-tier cities where they had previously not had strong footholds.”
Youku continues to evolve and expand its offerings for brand advertisers, including updating its video channel feature to allow more customized designs and better integration with social media. Youku Link, the company’s cross-platform synchronization product, allows users to more easily integrate Youku’s offerings, including branded content, into their online social lives across China’s leading social and microblogging platforms.
According to iResearch, Youku had more than 231 million monthly unique visitors from homes and offices and 52 million from internet cafes in early 2011.
Youku.com Inc. is China’s leading Internet television company. Our Internet television platform enables users to search, view and share high-quality video content quickly and easily across multiple devices. Youku, which stands for “what’s best and what’s cool” in Chinese, is the most recognized online video brand in China. Youku’s American depositary shares, each representing 18 of our Class A ordinary shares, are traded on NYSE under the symbol “YOKU”.
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