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In China, Luxury Conglomerates Don't Totally Have Their Online Strategy Together

But they should do something about it: E-commerce is gaining in popularity in China, even while luxury sales overall are slowing.

Growth in luxury sales in China may have dropped significantly over the last year, but consumers seem increasingly interested in taking their big designer buys online. According to new research from L2, the proportion of Chinese shoppers who prefer to make their luxury purchases online increased 22 percent to 36 percent.

Still a minority, sure -- but it suggests that those prestige brands that have made slow steps forward into e-commerce in China would do well to up their digital game. As it stands, only 21 percent of fashion brands sell online in China, versus 79 percent in the U.S.

But when it comes to digital intelligence in China — an assessment of a company’s social media, e-commerce and marketing initiatives — none of the major luxury conglomerates seem to have nailed down a strong strategy across their portfolio companies. Kering, Richemont and LVMH all had brands scattered across L2’s grade curve, although PVH broke ahead of the pack with Tommy Hilfiger, which scored higher than any other American or European brand.

Overall, Labelux and LVMH have done higher enterprise value than Kering, which beats the others out in Europe and the U.S.

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In all fairness, establishing a strong online presence in China can be an uphill battle. L2 notes that PVH “aggressively invested” in its digital presence after regaining the rights to Tommy Hilfiger in China in 2011, but hasn’t been able to gain the same toehold for Calvin Klein thanks to tricky licensing agreements.

Meanwhile, LVMH has made strides in combating gray market sales of its goods on Chinese e-commere marketplaces like Tmall — which, while legal, are unsanctioned by the brand — but still hasn’t established its own, direct channels.