china online boom: yet to come for ostrich luxury...

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LUXURY GOODS China Online Boom: ...yet to come for Ostrich Luxury Brands 21 FEBRUARY 2017 at 05:29* We go back to surveying how western luxury goods brands are faring in the Chinese digital market, following up on our two previous reports: China Online Boom - No Country for Ostrich Brands; Best of: China Online Boom: Ostriches are lifting their heads from the sand. China is the most advanced digital market in the world Digital payment penetration in China is 50 times higher than in the USA, largely still relying on plastic. FMCG online penetration has reached the mid-teens. Big-box retailing in China makes shopping malls and department stores in the USA look like the garden of Eden. Western luxury brands in China are still lagging behind Only 21 of the 34 brands we have analysed operate an e-commerce mono-brand website in China. Even more remarkable is that the largest brands, such as LV, Hermès, Gucci, Prada, Ralph Lauren and Swatch, do not have an ecommerce mono-brand site. For comparison, 31 out of 32 brands surveyed operate an e-commerce mono-brand website in the USA, and 30 out of 32 in the UK. Digital proficiency in China is 46% – against 55% in our latest digital competitive map (DCM). Burberry, Michael Kors and Cartier are the only exceptions Burberry stands out in China as strong leader on the Strategic Reach axis for exploiting all possible ecommerce channels as well as on the Digital Customer Experience Axis, excelling in customer service and style advisory. Michael Kors and Cartier are close behind Burberry on the Digital Customer Experience axis thanks to personal services and customer service. It is less than ideal that digital luxury is still dominated by local champions This is less than ideal: 1) the amount of grey market products (and outright fakes) still seems very high – western luxury brands have mono-brand websites of which they are not aware; 2) digital can rapidly become very relevant for Chinese consumers, as they are young, tech savvy, and eager to embrace change; and 3) western luxury brands have a fragile digital position, as they have a sketchy presence with their most relevant consumer nationality. Luca Solca (+44) 203 430 8503 [email protected] Melania Grippo (+39) 02 89 63 1724 [email protected] Guido Lucarelli (+39) 02 89 63 1726 [email protected] Specialist sales David Tovar (+44) 203 430 8677 Contactlab Marco Pozzi (+39) 02 28 31 181 [email protected] Francesca Borgonovo (+39) 02 28 31 181 [email protected] Xian Zhang (+39) 02 28 31 181 [email protected] Kuiling Song (+39) 02 28 31 181 [email protected] * Date and time (London Time) on which the investment recommendation was finalised. It may differ from the date and time of broad dissemination on the website.See Appendix (on p88) for Analyst Certification, Important Disclosures and Non-US Research Analyst disclosures.

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LUXURY GOODS

China Online Boom:

...yet to come for Ostrich Luxury Brands

21 FEBRUARY 2017 at 05:29* We go back to surveying how western luxury goods brands are faring in the Chinese digital market,

following up on our two previous reports: China Online Boom - No Country for Ostrich Brands; Best of: China Online Boom: Ostriches are lifting their heads from the sand.

China is the most advanced digital market in the world Digital payment penetration in China is 50 times higher than in the USA, largely still relying on plastic. FMCG online penetration has reached the mid-teens. Big-box retailing in China makes shopping malls and department stores in the USA look like the garden of Eden.

Western luxury brands in China are still lagging behind Only 21 of the 34 brands we have analysed operate an e-commerce mono-brand website in China. Even more remarkable is that the largest brands, such as LV, Hermès, Gucci, Prada, Ralph Lauren and Swatch, do not have an ecommerce mono-brand site. For comparison, 31 out of 32 brands surveyed operate an e-commerce mono-brand website in the USA, and 30 out of 32 in the UK. Digital proficiency in China is 46% – against 55% in our latest digital competitive map (DCM).

Burberry, Michael Kors and Cartier are the only exceptions Burberry stands out in China as strong leader on the Strategic Reach axis for exploiting all possible ecommerce channels as well as on the Digital Customer Experience Axis, excelling in customer service and style advisory. Michael Kors and Cartier are close behind Burberry on the Digital Customer Experience axis thanks to personal services and customer service.

It is less than ideal that digital luxury is still dominated by local champions This is less than ideal: 1) the amount of grey market products (and outright fakes) still seems very high – western luxury brands have mono-brand websites of which they are not aware; 2) digital can rapidly become very relevant for Chinese consumers, as they are young, tech savvy, and eager to embrace change; and 3) western luxury brands have a fragile digital position, as they have a sketchy presence with their most relevant consumer nationality.

Luca Solca (+44) 203 430 8503

[email protected]

Melania Grippo (+39) 02 89 63 1724

[email protected]

Guido Lucarelli (+39) 02 89 63 1726

[email protected]

Specialist sales

David Tovar (+44) 203 430 8677

Contactlab Marco Pozzi (+39) 02 28 31 181 [email protected]

Francesca Borgonovo (+39) 02 28 31 181 [email protected]

Xian Zhang (+39) 02 28 31 181 [email protected]

Kuiling Song (+39) 02 28 31 181 [email protected]

* Date and time (London Time) on which the investment recommendation was finalised. It may differ from the date and time of broad dissemination on the website.See Appendix (on p88) for Analyst Certification, Important Disclosures and Non-US Research Analyst disclosures.

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 2

Contents

Executive Summary _______________________________________ 3

Detailed Results _________________________________________ 15 Methodology ________________________________________________________ 15 Strategic Reach in China ______________________________________________ 18 Digital experience for Chinese Customers _________________________________ 43

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 3

Executive Summary

We go back to surveying how western luxury goods brands are faring in the Chinese digital market, following up on our two previous reports: China Online Boom - No Country for Ostrich Brands; Best of: China Online Boom: Ostriches are lifting their heads from the sand.

China is the most advanced digital market in the world

Digital payment penetration in China is 50 times higher than in the USA, largely still relying on plastic. FMCG online penetration has reached the mid-teens. Big-box retailing in China makes shopping malls and department stores in the USA look like the garden of Eden.

Western luxury brands in China are still lagging behind

Only 21 of the 34 brands we have analysed operate an e-commerce mono-brand website in China. Even more remarkable is the fact that the largest brands, including LV, Hermès, Gucci, Prada, Ralph Lauren and Swatch, do not have an ecommerce mono-brand website. This compares with almost all the brands (31 out of 32) operating an e-commerce mono-brand website in the USA, and 30 out of 32 in the UK. Digital proficiency in China is 46% – against 55% from our most recent DCM. Western digital luxury still seems where we had left it two years ago.

Burberry, Michael Kors and Cartier are the only exceptions

Burberry stands out as strong leader on the Strategic Reach axis in China for exploiting all possible ecommerce channels (e-commerce mono-brand, flagship online store on Tmall, online store on WeChat, JD.com, Secoo.com and 5Lux.com) as well as on the Digital Experience Axis excelling in customer service and style advisory. Also Ray-Ban ranks high on the Strategic Reach axis thanks to the capability to engage Chinese customers via Content localization and Social Media presence. Michael Kors and Cartier are close behind Burberry on the Digital Customer Experience axis thanks to personal services and customer service.

It is less than ideal that digital luxury is still dominated by local champions

This is less than ideal: 1) the amount of grey market products (and outright fakes) still seems very high – western luxury brands have mono-brand websites of which they are not aware; 2) digital can rapidly become very relevant for Chinese consumers, as they are young, tech savvy, and eager to embrace change; and 3) western luxury brands have a fragile digital position, as they have a sketchy presence with their most relevant consumer nationality.

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 4

China is the most advanced digital market in the world

Mobile payment penetration in China is 50 times higher than in the USA, largely still relying on plastic. FMCG online penetration has reached the mid-teens. Big-box retailing in China makes shopping malls and department stores in the USA look like the garden of Eden.

Figure 1: Mobile payment penetration in China is 50 times higher than in the USA, largely still relying on plastic (1/2) Transaction value of third-party payments (USD trn)

Source: Forrester Research, iResearch Note: Post-2015 figures are forecast, renminbi values converted to USD at current rate

Figure 2: Digital payment penetration in China is 50 times higher than in the USA, largely still relying on plastic (2/2) E-commerce mix by payment methods

China USA

Source: Worldpay “Global payments report”, November 2016

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2015 2016e 2017e 2018e 2019eUSA China

eWallet60%

Credit Card10%

Debit Card9%

Cash on Delivery

7%

Bank Transfer

6%

Pre-Paid4%

PrePay2%

Others2%

Credit card34%

Debit card25%

eWallet20%

Bank Transfer

6%

Cash on Delivery

4%

Pre-Paid3%

PrePay3%

Others3%

Postpay2%

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 5

Figure 3: In China, there is a broad acceptance of digital payment solutions like WeChat Pay (Tencent) and Alipay (Alibaba) China’s mobile-payment market

Source: iResearch, The Wall Street Journal 22/05/2016

Figure 4: Digital is booming in consumer goods in China Rate of usage of different mobile apps in China (Jun-2016 data)

Source: China Internet Network Information Center

Figure 5: FMCG online penetration has reached the mid-teens Quotes from meetings in China

In offline FMCG, 25 out of 28 categories are declining. Only few of them recover online. EUR 2.3trn to be generated, over the next five years. […] Hypermarkets are very negative. Brick & Mortar logistics are down, even more hypermarkets are shutting down. Local retailers pay with 120 days delay (!). There is no liquidity. […] Ferrero derives c.15-20% of online sales in China; product personalization is key. The range on Digital is different from the range offered in the physical stores. (Leading food company) Internet use is increasing: Carrefour, Walmart are declining. (Consulting company) Source: Exane BNP Paribas proprietary field research in China

0%

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100%

2014 2015Tencent Alipay Others

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

FinanceOnline course

BBSOrdering & Delivery

EmailTicket booking

LiteratureGames

BankingShoppingPayment

VideoMusicNews

SearchInstant messaging

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 6

Figure 6: Chinese digital growth is causing the demise of physical retail formats like hypermarkets Urban FMCG market value (RMB bn)

2012-15 CAGR 2012-15 market share (RMB bn)

Source: Bain, Kantar Worldpanel Note: Notes: Hypermarket refers to stores with more than 6,000 square meters; the hypermarket channel includes only the top 72 named hypermarket retailers, representing 80% of total hypermarket channel (based on 2015 revenues); super/mini refers to stores from 100-6,000 square meters; CVS includes chain and individual convenience stores and is defined by being open for more than 16 hours a day; grocery refers to stores with less than 100 square meters; other includes department stores, free market, wholesales, work unit, directsales, specialty store, overseas shopping and others

Figure 7: Big-box retailing in China makes shopping malls and department stores in the USA look like the Garden of Eden

China USA

Source: Google and Getty images

(5%)

0%

5%

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25%

30%

35%

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10%

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30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015

Super/Mini Hypermarket Grocery CVS E-Commerce Other

1,068 1,146 1,209 1,251

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 7

Western luxury brands in China are still lagging behind

Only 21 of the 34 brands we have analysed operate an e-commerce mono-brand website in China. Even more remarkable is the fact that the largest brands, including LV, Hermès, Gucci, Prada, Ralph Lauren and Swatch, do not have an ecommerce mono-brand. This compares with almost all the brands (31 out of 32) operating an e-commerce mono-brand website in the USA, and 30 out of 32 in the UK. Digital proficiency in China is 46% – against 55% from our most recent DCM. Western digital luxury still seems where we had left it two years ago.

Figure 8: Only 21 of the 34 brands we have surveyed operate an e-commerce mono-brand website in China Strategic Reach – Ecommerce in China (China, January 2017)

Source: Contactlab Analysis

Brand Ranking Monobrand Ecommerce

% E-Commerce Categories in

Mainland China

Flagship online store on Tmall

Online store on WeChat

(Jul 2016 - Jan 2017)

Online store on JD.com

Online Store on Secoo.com

Online Store on 5Lux.com

Burberry 1 YES 86% YES Yes (2 bags Fashion Show Sept 16) YES YES YESRay-Ban 2 YES 100% YES NO YES YES YESCoach 3 YES 93% (Quit in 2016) NO YES YES YESHugo Boss 3 YES 83% YES NO YES YES YESChow Tai Fook 3 YES 100% YES NO YES NO NOArmani 6 YES 76% Ca 100 Watches NO YES YES YESBalenciaga 6 YES 86% NO NO YES YES NOCartier 6 YES 78% NO Yes (Ca. 60 items) Ca 30 Watches YES YESTod's 6 YES 50% YES NO YES YES NODolce&Gabbana 10 YES 72% NO NO YES YES YESMoncler 10 YES 75% NO NO YES YES YES

Tory Burch 10YES (US website)

100% NO NO YES NO NO

Valentino 10 YES 83% NO NO YES YES YESMichael Kors 14 YES 65% NO NO YES NO YESBrunello Cucinelli 15 YES 95% NO NO NO NO NOFerragamo 15 YES 38% NO NO YES YES YESLoro Piana 15 YES 100% NO NO NO NO NOShanghai Tang 15 YES 90% NO NO NO NO NOChanel 19 YES (Beauty) 7% NO Yes (1 Perfume) NO YES YESDior 19 YES (Beauty) 7% NO Yes (1 bag) NO YES YESGivenchy 19 YES (IOS APP) 70% NO NO YES YES NO

Bulgari 22 NO no CN ecommerce NOYes (Necklaces for Chinese valentine; 12 pieces for

Christmas; 3 rings for B.Zero 1 collection)Ca 25 Perfumes YES YES

Fendi 22 NO no CN ecommerce NO NO YES YES YESGucci 22 NO no CN ecommerce NO NO YES YES YESPrada 22 NO no CN ecommerce NO NO YES YES YESTiffany 22 NO no CN ecommerce NO NO YES YES YESZegna 22 NO no CN ecommerce NO NO YES YES YESBottega Veneta 28 NO no CN ecommerce NO NO YES YES NOHermès 28 NO no CN ecommerce NO NO Ca 20 Perfumes YES YESSaint Laurent 28 NO no CN ecommerce NO NO YES YES NO

Louis Vuitton 31Only Phone

Ordersno CN ecommerce NO NO NO YES YES

Ralph Lauren 31 NO no CN ecommerce NO NO YES NO NOSwatch 31 NO no CN ecommerce NO NO YES NO NOCéline 34 NO no CN ecommerce NO n.a (no WeChat account) NO YES NO

Yes Above 85% Yes Permanent Yes Yes Yes

Yes (App)Between

50% and 85%Limited offer Temporary Limited offer Limited offer Limited offer

No Below 50% No No No No No

ECOMMERCE IN CHINA

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 8

Figure 9: Even more remarkable is the fact that the largest brands, such as LV, Hermès, Gucci, Prada, Ralph Lauren and Swatch, do not have an ecommerce mono-brand

Source: Contactlab Analysis

Figure 10: Digital proficiency in China is 46% – against 55% from our most recent DCM (1/2) DCM China – January 2017

Source: Contactlab Analysis

Website URL Localization Brand Ship to China Brand Email Language Brand Certified links / Accounts

Armani YNAP Premium CN Armani YES Armani CN Armani Baidu, WeChat, Weibo, YoukuBalenciaga YNAP Runner-Up CN Balenciaga YES Balenciaga CN Balenciaga Baidu, WeChat, WeiboBottega Veneta YNAP High-End WW Bottega Veneta NO Bottega Veneta CN Bottega Veneta Baidu, WeChat, Weibo, YoukuBrunello Cucinelli YNAP High-End CN Brunello Cucinelli YES Brunello Cucinelli CN Brunello Cucinelli WeChat, WeiboBulgari Jeweller CN Bulgari NO Bulgari CN Bulgari Baidu, WeChat, Weibo, Youku

Burberry Mega-Brand CN Burberry YES Burberry CN Burberry Baidu, WeChat, Weibo, Youku

Cartier Jeweller CN Cartier YES Cartier CN Cartier Baidu, WeChat, Weibo, Youku

Céline High-End CN Céline NO Céline Welcome Email Only (CN) Céline Baidu

Chanel High-End CN Chanel YES (Beauty) Chanel CN Chanel Baidu, WeChat, Weibo, Youku

Coach Premium CN Coach YES Coach CN Coach Baidu, WeChat, Weibo, Youku

Dior High-End CN Dior YES (Beauty) Dior CN Dior Baidu, WeChat, Weibo, Youku

Dolce&Gabbana The Level Group Runner-Up CN Dolce&Gabbana YES Dolce&Gabbana CN Dolce&Gabbana Baidu, WeChat, Weibo, Youku

Fendi Runner-Up CN Fendi NO Fendi CN Fendi Baidu, WeChat, Weibo, YoukuFerragamo Runner-Up CN Ferragamo YES Ferragamo No Email Received Ferragamo Baidu, WeChat, Weibo, YoukuGivenchy YNAP Runner-Up CN(Editorial focus) Givenchy YES (IOS APP) Givenchy CN Givenchy Baidu, WeChat, Weibo, YoukuGucci Mega-Brand CN Gucci NO Gucci CN Gucci Baidu, WeChat, Weibo, Youku

Hermès Mega-Brand CN(Editorial focus, only scarf products)

Hermès NO Hermès CN Hermès Baidu, WeChat, Weibo, Youku

Hugo Boss Premium CN Hugo Boss YES Hugo Boss CN Hugo Boss Baidu, WeChat, Weibo, YoukuLoro Piana High-End CN Loro Piana YES Loro Piana Welcome Email Only (CN) Loro Piana Baidu, WeChat, Weibo

Louis Vuitton Mega-Brand CN Louis Vuitton Only Phone Orders Louis Vuitton CN Louis Vuitton Baidu, WeChat, Weibo, Youku

Michael Kors Premium CN Michael Kors YES Michael Kors CN Michael Kors Baidu, WeChat, Weibo, Youku

Moncler YNAP Premium CN Moncler YES Moncler CN Moncler Baidu, WeChat, Weibo, Youku

Prada Mega-Brand CN Prada NO Prada CN Prada Baidu, WeChat, Weibo

Ralph Lauren Premium CN (Editorial focus) Ralph Lauren NO Ralph Lauren No Email Received Ralph Lauren Baidu, WeChat, Weibo, Youku

Ray-Ban Mega-Brand CN Ray-Ban YES Ray-Ban CN Ray-Ban Baidu, WeChat, Weibo, Youku

Saint Laurent YNAP High-End WW Saint Laurent NO Saint Laurent CN Saint Laurent Baidu, WeChat, WeiboSwatch Premium CN Swatch NO Swatch CN Swatch WeChat, Weibo, YoukuTiffany Jeweller CN Tiffany NO Tiffany CN Tiffany Baidu, WeChat, WeiboTod's Italian Touch Runner-Up CN Tod's YES Tod's CN Tod's Baidu, WeChat, Weibo, Youku

Tory Burch Premium CN (Editorial focus), US (Ecommerce)

Tory Burch YES (US website) Tory Burch Welcome Email Only (CN) Tory Burch Baidu, WeChat, Weibo, Youku

Valentino YNAP High-End CN Valentino YES Valentino CN Valentino Baidu, WeChat, Weibo, YoukuZegna Mega-Brand CN Zegna NO Zegna CN Zegna Baidu, WeChat, Weibo, Youku

Chow Tai Fook Jeweller CN Chow Tai Fook YES Chow Tai FookNo email option for Mainland

ChinaChow Tai Fook Baidu, WeChat, Weibo, Youku

Shanghai Tang Premium CN Shanghai Tang YES Shanghai Tang CN / EN Shanghai Tang WeChat, Weibo

CN (Chinese URL) Yes Chinese Yes

WW / Asia Yes (App)English/Welcome Email Only

(Chinese)No (No website / Other countries

URL)No

No China country option for newsletter

No

WEBSITE URL LOCALIZATION ECOMMERCE TO CHINA CHINA COUNTRY SELECTION FOR NEWSLETTER

Brand

CHINESE SEARCH ENGINE / SOCIALS

Digital Competitive Map ChinaAxes

Competitive Map Score Score Over Maximum Potential %

Strategic Reach in China 1,440 66%Digital Experience for Chinese Customers 2,597 39%Total Panel 4,037 46%

Digital Competitive Map ChinaCriteria

Competitive Map Score Score Over Maximum Potential %

Display Visualization on China Website 268 99%China Website Localization 264 97%Customer Engagement Strategy for Chinese Customer 850 74%Online Shopping on China Websites 559 53%Store Finder 539 50%Product Presentation on China Websites 116 49%Ecommerce to China 251 46%Basic Customer Service on China Websites 109 46%Email Proficiency for Chinese Customers 254 42%Product Selection Support on China Websites 298 38%Apps for Chinese Customers 77 38%"Made In" on China Websites 75 37%Share on China/Intl. Websites 70 29%Personal Services on China Websites 189 29%Delivery Options in China 76 14%Cross-Channel Services In China 43 8%Total Panel 4,037 46%

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 9

Figure 11: Digital proficiency in China is 46% – against 55% from our most recent DCM (2/2) DCM – January 2016

Source: Contactlab Analysis

Digital Competitive MapAxes

Competitive Map Score SS15

Competitive Map Score FW15 Delta Score %

FW15 Score Over Maximum

Potential %Strategic Reach 1,058 1,123 6% 53%Digital Customer Experience 2,626 2,889 10% 56%Total Panel 3,684 4,012 9% 55%

Digital Competitive MapCriteria

Competitive Map Score SS15

Competitive Map Score FW15 Delta Score %

FW15 Score Over Maximum

Potential %Display Visualization 259 268 3% 89%Online Shopping 428 454 6% 84%Share 132 130 -2% 72%Web Languages 254 258 2% 72%Basic Customer Service 116 124 7% 69%Product Selection Support 316 336 6% 62%E-mail Reach 268 287 7% 60%Online Shoppable Product Range 259 277 7% 58%Delivery Options 190 205 8% 57%Product Presentation 106 113 7% 54%Store Finder 459 479 4% 50%E-mail Proficiency 239 263 10% 49%"Made In" On Web 124 128 3% 43%Apps 84 100 19% 42%Personal Services 129 207 60% 38%Online Geographical Coverage 153 173 13% 36%Cross Channel Services 168 210 25% 35%Total Panel 3,684 4,012 9% 55%

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 10

Burberry, Michael Kors and Cartier are the only exceptions

Burberry stands out as strong leader on the Strategic Reach axis in China for exploiting all possible ecommerce channels (e-commerce mono-brand, flagship online store on Tmall, online store on WeChat, JD.com, Secoo.com and 5Lux.com) as well as on the Digital Experience Axis excelling in customer service and style advisory. Ray-Ban ranks high on the Strategic Reach axis thanks to the capability to engage Chinese customers via Content localization and Social Media presence. Michael Kors, Cartier, together with the aforementioned Burberry, lead in the Digital Customer Experience axis thanks to personal services and customer service.

Figure 12: Burberry overall leading the DCM China, Michael Kors and Cartier co-leaders with Burberry on the Digital Customer Experience Axis Digital Competitive Map China (January 2017)

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 11

Figure 13: Burberry leads on the Strategic Reach axis in China, exploiting all possible e-commerce channels. Also Ray-Ban ranks high thanks to the capability to engage Chinese customers via Content localization and Social Media presence Strategic Reach Axis in China – Overall Brand Ranking (China, January 2017)

Source: Contactlab analysis

Brand SCORE RANKINGChinese Website

Localisation

Ecommerce

to China

Burberry 59.0 1 1 1 11 4

Ray-Ban 54.0 2 1 2 14 1

Coach 52.0 3 1 3 14 1

Hugo Boss 52.0 3 1 3 14 1

Dolce&Gabbana 51.0 5 1 10 1 14

Valentino 51.0 5 1 10 1 14

Armani 50.0 7 1 6 14 4

Cartier 50.0 7 1 6 14 4

Ferragamo 49.0 9 1 15 1 14

Michael Kors 48.0 10 1 14 14 4

Tod's 48.0 10 1 6 1 21

Chow Tai Fook 48.0 10 1 3 14 10

Fendi 47.0 13 1 22 1 9

Dior 46.0 14 1 19 14 4

Gucci 46.0 14 1 22 1 10

Moncler 46.0 14 1 10 14 10

Balenciaga 44.0 17 1 6 1 30

Louis Vuitton 43.0 18 1 31 11 10

Chanel 42.0 19 1 19 14 14

Shanghai Tang 41.5 20 1 15 14 20

Tory Burch 40.5 21 1 10 14 24

Bottega Veneta 39.0 22 33 28 1 19

Bulgari 39.0 22 1 22 14 14

Zegna 39.0 22 1 22 11 25

Givenchy 38.0 25 1 19 1 32

Brunello Cucinelli 37.0 26 1 15 14 26

Loro Piana 35.5 27 1 15 1 33

Ralph Lauren 33.0 28 1 31 14 21

Swatch 33.0 28 1 31 14 21

Hermès 32.0 30 1 28 14 26

Prada 32.0 30 1 22 14 28

Tiffany 32.0 30 1 22 14 28

Saint Laurent 26.0 33 33 28 14 30

Céline 16.5 34 1 34 14 34

STRATEGIC REACH AXIS IN CHINA - RANKINGS

CHINA DIGITAL STRATEGY MADE IN

ON CHINA WEBSITES

CUSTOMER ENGAGEMENT STRATEGY

FOR CHINESE CUSTOMERS

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 12

Figure 14: Michael Kors, Burberry and Cartier leading the Digital Customer Experience axis. Namely, Burberry, LV and Dior excelling in Style Advisory. Cross-Channel Services still quite neglected in China, only Burberry and Loro Piana standing out Digital Experience Axis – Overall Brand Ranking (China, January 2017)

Source: Contactlab Analysis

Brand SCORE RANKING

Display Visualization

on China Websites

Product Presentation

on China Website

Product Selection

Support on China Website

Basic Customer Service on China

Websites

Personal Services on

China Websites

Online Shoppingon China Websites

Delivery Optionsin China

Store Finder

Cross-Channel Services In

China

Email Proficiencyfor Chinese Customers

Shareon China/Intl.

Websites

Appsfor Chinese Customers

Michael Kors 117 1 1 6 7 1 6 1 2 10 7 14 2 14Burberry 116 2 1 1 7 10 4 10 7 4 1 1 2 25Cartier 114 3 1 18 6 10 1 5 13 4 4 13 12 1Coach 108 4 1 18 1 1 13 2 3 17 4 25 2 23Chanel 106 5 1 18 12 1 13 4 7 8 12 8 8 7Dior 105 6 1 18 23 1 2 5 3 10 12 5 28 7Hugo Boss 98 7 1 6 12 1 3 12 1 30 12 14 2 19Loro Piana 96 8 1 1 4 8 9 20 13 15 1 28 7 23Valentino 94 9 1 6 12 10 7 12 19 24 12 1 12 5Armani 94 10 1 6 12 10 9 17 7 17 12 5 12 14Balenciaga 92 11 1 6 12 24 20 5 19 17 4 1 12 19Ray-Ban 90 12 1 3 23 1 8 12 13 24 12 8 28 14Louis Vuitton 88 13 1 18 4 10 4 26 19 1 12 5 8 1Chow Tai Fook 88 13 1 29 3 1 23 2 13 33 3 28 28 7Tod's 87 15 1 18 17 10 16 12 3 10 12 8 28 25Tory Burch 84 16 1 3 1 9 25 17 19 10 12 28 12 12Shanghai Tang 81 17 1 6 17 10 16 9 18 21 7 18 12 25Moncler 78 18 33 18 17 24 28 12 7 15 12 8 26 19Brunello Cucinelli 73 19 1 18 7 26 26 17 7 30 7 25 1 25Dolce & Gabbana 72 20 1 6 7 26 28 10 13 28 12 22 12 25Givenchy 72 20 1 6 17 10 28 21 7 4 7 27 28 7Ferragamo 68 22 1 6 23 10 15 5 3 34 12 28 12 25Gucci 68 22 1 6 17 10 26 32 19 4 12 1 2 5Bulgari 64 24 1 6 7 10 23 22 19 27 11 12 25 14Swatch 62 25 1 29 23 10 20 32 19 3 12 14 12 1Tiffany 55 26 1 6 17 26 16 26 19 24 12 22 26 1Fendi 52 27 1 29 32 10 12 32 19 8 12 18 12 14Zegna 52 28 1 3 27 26 11 26 19 21 12 17 28 25Bottega Veneta 49 29 1 18 30 26 16 22 19 10 12 22 12 25Saint Laurent 45 30 1 18 27 31 28 22 19 21 12 18 8 19Prada 39 31 33 18 32 31 20 26 19 28 12 18 12 12Hermès 36 32 1 32 29 31 28 26 19 17 12 28 12 7Ralph Lauren 35 33 1 34 32 10 28 26 19 1 12 28 28 25Céline 27 34 1 32 30 31 28 25 19 30 12 28 8 25

CUSTOMER ENGAGEMENT EXPERIENCEFOR CHINESE CUSTOMERS

CROSS-CHANNEL EXPERIENCEFOR CHINESE CUSTOMERS

ECOMMERCE EXPERIENCEON CHINESE WEBSITESWEBSITE EXPERIENCE ON CHINESE WEBSITES

DIGITAL EXPERIENCE AXIS FOR CHINESE CUSTOMERS - RANKINGS

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 13

It is less than ideal that digital luxury is still dominated by local champions

This is less than ideal: 1) the amount of grey market products (and outright fakes) still seems very high – western luxury brands have mono-brand websites of which they are not aware; 2) digital can rapidly become very relevant for Chinese consumers, as they are young, tech savvy, and eager to embrace change; and 3) western luxury brands have a fragile digital position, as they have a sketchy presence with their most relevant consumer nationality.

Figure 15: The amount of grey market products (and outright fakes) still seems very high Seizures of counterfeit and pirated goods

Top provenance economies By product category

Source: OECD, 2013

Figure 16: Digital can rapidly become very relevant for Chinese consumers, as they are young, tech savvy, and eager to embrace change Composition of online Luxury Goods consumers

By gender By age

Source: Tencent, November 2016

0

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Female53%

Male47%

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45%

50%

0-17 18-25 26-35 36-45 >45

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 14

Figure 17: More and more consumers in China prefer to buy luxury products online Secoo

Trend in # of customers and orders (% y/y) Trend in # of lifestyle product customers and orders (% y/y)

Source: Secoo China Luxury E-commerce Whitebook, November 2016

Figure 18: Western luxury brands have a fragile digital position, as they have a sketchy presence with their most relevant consumer nationality # of Luxury brands with Mono-brand ecommerce

Source: Contactlab analysis, Exane BNP Paribas

-

200

400

600

800

1,000

1,200

Number of customers Number of orders

2015 2016

+89%

+187%

-

20

40

60

80

100

120

140

160

180

Number of Lifestyle productcustomers

Number of Lifestyle productorders

2015 2016

+191%

+306%

0

5

10

15

20

25

30

35

US UK China Korea Russia IndiaE-commerce E-commerce in Local Language

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 15

Detailed Results

Methodology

Figure 19: In the DCM, we analyse 32 international mono-brands together with local luxury players Chow Tai Fook (Jeweller) and Shanghai Tang (Richemont) Panel of brands in the DCM

Source: Exane BNP Paribas

Bulgari Jeweller Burberry Mega-BrandCartier Jeweller Gucci Mega-BrandTiffany Jeweller Hermès Mega-BrandChow Tai Fook Jeweller Louis Vuitton Mega-BrandBottega Veneta High-End Prada Mega-BrandBrunello Cucinelli High-End Ray-Ban Mega-BrandCéline High-End Zegna Mega-BrandChanel High-End Armani PremiumDior High-End Coach PremiumLoro Piana High-End Hugo Boss PremiumSaint Laurent High-End Michael Kors PremiumValentino High-End Moncler PremiumBalenciaga Runner-Up Ralph Lauren PremiumDolce&Gabbana Runner-Up Swatch PremiumFendi Runner-Up Tory Burch PremiumFerragamo Runner-Up Shanghai Tang PremiumGivenchy Runner-UpTod's Runner-Up

Brand Brand

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 16

Figure 20: Major differences between DCM Jan16 vs. DCM in China: all axes/categories/criteria adapted for China, with major focus on local Socials, Payment systems and Customer Assistance DCM criteria

Source: Contactlab Analysis

Figure 21: Local brand Chow Tai Fook

Source: Contactlab analysis

1. China Website Localization

2. Ecommerce in China

3. “Made in” on Chinese Websites

4. Customer Engagement Strategyfor Chinese Customers

5. Display Visualization6. Product Presentation7. Product Selection Support8. Basic Customer Service9. Personal Services

10. Online Shopping11. Delivery Options in China

12. Store Finder13. Cross-Channel Services

14. Email Proficiency15. Share16. Apps

1. China Digital Strategy

2. “Made in” on Chinese Websites

3. Customer Engagement Strategyfor Chinese Customers

4. Website Experienceon Chinese Websites

5. E-Commerce Experienceon China Websites

6. Cross-Channel Experiencefor Chinese Customers

7. Customer Engagement Experiencefor Chinese Customers

STRATEGIC REACH IN CHINA(24 parameters)

DIGITAL EXPERIENCEFOR CHINESE CUSTOMERS

(72 parameters)

AXES CATEGORIES CRITERIA

4. New Parameters

- Baidu (Chinese Search Engine)

- Local content on websites

- WeChat (Chinese Social Media), Weekly post

frequency and Local content

- Weibo (Chinese Social Media)

- Youku (Chinese Video Web Platform)

- Local content on emails

- Major local Celebrities and Fashion Bloggers

2. New Parameters

- Flagship online store on Tmall

- Online store on WeChat

- Online store on JD.com

- Online Store on Secoo.com

- Online Store on 5Lux.com

15. New Parameters:

- Share on Weibo

- Share on WeChat

10. New Parameters:

- Quick buy option

- Alipay

- WeChat Pay

- Cash on delivery

Completely new criteria vs. DCM Jan16 (focus US)

7. New Parameter:

- Customers Reviews

9. New Parameters:

- Style Advisor Test: WeChat Assistance

- Style Advisor Test: Weibo

11. New Parameters:

- Standard delivery timing

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 17

Figure 22: Chow Tai Fook is ranked among Top Ten Luxury Goods Companies

Source: Global Powers of Luxury Goods 2016, Deloitte

Figure 23: Local Luxury Fashion brand Shanghai Tang

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 18

Strategic Reach in China

Figure 24: Burberry strong leader on the Strategic Reach axis in China, exploiting all possible e-commerce channels. Ray-Ban, Coach and Hugo Boss standing out for to engage Chinese customers via Content localization and Social Media presence Strategic Reach Axis in China – Overall Brand Ranking (China, January 2017)

Source: Contactlab analysis

Brand SCORE RANKINGChinese Website

Localisation

Ecommerce

to China

Burberry 59.0 1 1 1 11 4

Ray-Ban 54.0 2 1 2 14 1

Coach 52.0 3 1 3 14 1

Hugo Boss 52.0 3 1 3 14 1

Dolce&Gabbana 51.0 5 1 10 1 14

Valentino 51.0 5 1 10 1 14

Armani 50.0 7 1 6 14 4

Cartier 50.0 7 1 6 14 4

Ferragamo 49.0 9 1 15 1 14

Michael Kors 48.0 10 1 14 14 4

Tod's 48.0 10 1 6 1 21

Chow Tai Fook 48.0 10 1 3 14 10

Fendi 47.0 13 1 22 1 9

Dior 46.0 14 1 19 14 4

Gucci 46.0 14 1 22 1 10

Moncler 46.0 14 1 10 14 10

Balenciaga 44.0 17 1 6 1 30

Louis Vuitton 43.0 18 1 31 11 10

Chanel 42.0 19 1 19 14 14

Shanghai Tang 41.5 20 1 15 14 20

Tory Burch 40.5 21 1 10 14 24

Bottega Veneta 39.0 22 33 28 1 19

Bulgari 39.0 22 1 22 14 14

Zegna 39.0 22 1 22 11 25

Givenchy 38.0 25 1 19 1 32

Brunello Cucinelli 37.0 26 1 15 14 26

Loro Piana 35.5 27 1 15 1 33

Ralph Lauren 33.0 28 1 31 14 21

Swatch 33.0 28 1 31 14 21

Hermès 32.0 30 1 28 14 26

Prada 32.0 30 1 22 14 28

Tiffany 32.0 30 1 22 14 28

Saint Laurent 26.0 33 33 28 14 30

Céline 16.5 34 1 34 14 34

STRATEGIC REACH AXIS IN CHINA - RANKINGS

CHINA DIGITAL STRATEGY MADE IN

ON CHINA WEBSITES

CUSTOMER ENGAGEMENT STRATEGY

FOR CHINESE CUSTOMERS

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 19

Figure 25: All brands apart from BV and SL rely on China-based websites. Hermès website limited to scarves. Tory Burch split between China for editorial content and US for E-commerce to China. RL local website limited to editorial content Strategic Reach – Chinese Website Localization (China, January 2017)

Source: Contactlab Analysis

Brand Ranking Desktop Website URL Localization (CN) Mobile Website URL Localization (CN)Armani 1 CN CNBalenciaga 1 CN CNBrunello Cucinelli 1 CN CNBulgari 1 CN CNBurberry 1 CN CNCartier 1 CN CNCéline 1 CN CNChanel 1 CN CNCoach 1 CN CNDior 1 CN CNDolce&Gabbana 1 CN CNFendi 1 CN CNFerragamo 1 CN CNGivenchy 1 CN (Editorial focus) CN (Editorial focus)Gucci 1 CN CNHermès 1 CN (Editorial focus, only scarf products) CN (Editorial focus, only scarf products)Hugo Boss 1 CN CNLoro Piana 1 CN CNLouis Vuitton 1 CN CNMichael Kors 1 CN CNMoncler 1 CN CNPrada 1 CN CNRalph Lauren 1 CN (Editorial focus) CN (Editorial focus)Ray-Ban 1 CN CNSwatch 1 CN CNTiffany 1 CN CNTod's 1 CN CNTory Burch 1 CN (Editorial focus), US (Ecommerce) CN (Editorial focus), US (Ecommerce)Valentino 1 CN CNZegna 1 CN CNChow Tai Fook 1 CN CNShanghai Tang 1 CN CNBottega Veneta 33 WW WWSaint Laurent 33 WW WW

CN (Chinese URL) CN (Chinese URL)

WW / Asia WW / Asia

No (No website / Other countries URL) No (No mobile website / Other countries URL)

CHINESE WEBSITE LOCALIZATION

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 20

Figure 26: Burberry exploiting all possible ecommerce channels. Gucci, Prada, Hermès and LV still with no direct e-commerce. Flagship Stores on Tmall and e-stores via WeChat still very limited, while wide presence on JD/Secoo/5lux. Even Céline can be purchased online on Secoo.com Strategic Reach – Ecommerce in China (China, January 2017)

Source: Contactlab Analysis

Figure 27: Ferragamo launched Ecommerce in China on 16 December 2016

Source: Contactlab Analysis

Brand Ranking Monobrand Ecommerce

% E-Commerce Categories in

Mainland China

Flagship online store on Tmall

Online store on WeChat

(Jul 2016 - Jan 2017)

Online store on JD.com

Online Store on Secoo.com

Online Store on 5Lux.com

Burberry 1 YES 86% YES Yes (2 bags Fashion Show Sept 16) YES YES YESRay-Ban 2 YES 100% YES NO YES YES YESCoach 3 YES 93% (Quit in 2016) NO YES YES YESHugo Boss 3 YES 83% YES NO YES YES YESChow Tai Fook 3 YES 100% YES NO YES NO NOArmani 6 YES 76% Ca 100 Watches NO YES YES YESBalenciaga 6 YES 86% NO NO YES YES NOCartier 6 YES 78% NO Yes (Ca. 60 items) Ca 30 Watches YES YESTod's 6 YES 50% YES NO YES YES NODolce&Gabbana 10 YES 72% NO NO YES YES YESMoncler 10 YES 75% NO NO YES YES YES

Tory Burch 10YES (US website)

100% NO NO YES NO NO

Valentino 10 YES 83% NO NO YES YES YESMichael Kors 14 YES 65% NO NO YES NO YESBrunello Cucinelli 15 YES 95% NO NO NO NO NOFerragamo 15 YES 38% NO NO YES YES YESLoro Piana 15 YES 100% NO NO NO NO NOShanghai Tang 15 YES 90% NO NO NO NO NOChanel 19 YES (Beauty) 7% NO Yes (1 Perfume) NO YES YESDior 19 YES (Beauty) 7% NO Yes (1 bag) NO YES YESGivenchy 19 YES (IOS APP) 70% NO NO YES YES NO

Bulgari 22 NO no CN ecommerce NOYes (Necklaces for Chinese valentine; 12 pieces for

Christmas; 3 rings for B.Zero 1 collection)Ca 25 Perfumes YES YES

Fendi 22 NO no CN ecommerce NO NO YES YES YESGucci 22 NO no CN ecommerce NO NO YES YES YESPrada 22 NO no CN ecommerce NO NO YES YES YESTiffany 22 NO no CN ecommerce NO NO YES YES YESZegna 22 NO no CN ecommerce NO NO YES YES YESBottega Veneta 28 NO no CN ecommerce NO NO YES YES NOHermès 28 NO no CN ecommerce NO NO Ca 20 Perfumes YES YESSaint Laurent 28 NO no CN ecommerce NO NO YES YES NO

Louis Vuitton 31Only Phone

Ordersno CN ecommerce NO NO NO YES YES

Ralph Lauren 31 NO no CN ecommerce NO NO YES NO NOSwatch 31 NO no CN ecommerce NO NO YES NO NOCéline 34 NO no CN ecommerce NO n.a (no WeChat account) NO YES NO

Yes Above 85% Yes Permanent Yes Yes Yes

Yes (App)Between

50% and 85%Limited offer Temporary Limited offer Limited offer Limited offer

No Below 50% No No No No No

ECOMMERCE IN CHINA

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 21

Figure 28: Chanel Beauty Online Store launched in December 2016

Source: Contactlab Analysis

Figure 29: Michael Kors Online Store launched in November 2016

Source: Contactlab Analysis

Figure 30: Dior Beauty Online Store launched in 2016

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 22

Figure 31: Tmall.com and JD.com represent c.80% of the generalist e-tailers market in China

Source: iResearch Q3 2015

Figure 32: Emporio Armani new Flagship Store on Tmall with Watch focus

Source: Contactlab Analysis

Tmall.com58%Jd.com

23%

Suning.com4%

Vip.com3%

Gome.com.cn2%

Yhd.com1%

Dangdang.com1%

Amazon.com.cn1% Jumei.com

1%Yixun.com

0%Others.com

6%

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 23

Figure 33: Example of Ray-Ban Flagship Store on Tmall

Source: Contactlab Analysis

Figure 34: Example of Chow Tai Fook Flagship Store on Tmall

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 24

Figure 35: Example of Chanel Online Store on WeChat

Source: Contactlab Analysis

Figure 36: Example Bulgari Online Store on WeChat

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 25

Figure 37: Example Cartier Online Store on WeChat

Source: Contactlab Analysis

Figure 38: Céline can be purchased online on Secoo.com

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 26

Figure 39: Ten brands disclose ‘Made In’ on web. As in US, Louis Vuitton and Zegna starting to disclose Made in on some important product categories Strategic Reach – ‘Made In’ on China Websites (China, January 2017)

Source: Contactlab Analysis

Figure 40: ‘Made in’ disclosure on Product pages particularly relevant for Chinese Customers Fashion & Luxury customers declaring Relevance of ‘Made in’ disclosure (% of respondents)

Source: Contactlab European (+) Digital Behaviour Study 2016

Brand Ranking "Made In" Disclosure on Web Product Pages Produced in Heritage Countries once Declared

Balenciaga 1 Systematically Very highBottega Veneta 1 Systematically Very highDolce&Gabbana 1 Systematically Very highFendi 1 Systematically Very highFerragamo 1 Systematically Very highGivenchy 1 Systematically Very highGucci 1 Systematically Very highLoro Piana 1 Systematically Very highTod's 1 Systematically Very highValentino 1 Systematically Very highBurberry 11 Partial Very highLouis Vuitton 11 Partial (RTW, watches) Very highZegna 11 Partial (Shoes, bags, coats) Very highArmani 14 NO n.aBrunello Cucinelli 14 NO n.aBulgari 14 NO n.aCartier 14 NO n.aCéline 14 NO n.aChanel 14 NO n.aCoach 14 NO n.aDior 14 Rarely (Only Watches) n.a (Very high)Hermès 14 NO n.aHugo Boss 14 NO n.aMichael Kors 14 NO (vs Yes in US) n.aMoncler 14 NO n.aPrada 14 NO n.aRay-Ban 14 NO n.aSaint Laurent 14 NO (vs Yes in US) n.aSwatch 14 NO n.aTiffany 14 Rarely (Only Watches) n.a (Very high)Tory Burch 14 Rarely (Only Watches) n.a (Very high)Chow Tai Fook 14 NO n.aShanghai Tang 14 NO n.aRalph Lauren 14 No product page on Chinese Website n.a

Systematically mentioned (above 80% of Web Product Pages)

Very high: above 85% production declared in Heritage country on Web Product Page

Partial: mentioned only on some relevant product categories

Partial: between 35% and 85% production declared in Heritage country on Web Product Page

Never / Rarely mentioned: below 20% of Web Product Pages

Marginal: below 35% production declared in Heritage country on Web Product Page. Or n.a.

"MADE IN" ON CHINESE WEBSITES

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

WW Customers Chinese Customers

Extremely+Very important Extremely+Very+ Quite important

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 27

Figure 41: Louis Vuitton starting to disclose ‘Made in’ on Product Pages

Source: Contactlab Analysis

Figure 42: Zegna starting to disclose ‘Made in’ on Product Pages

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 28

Figure 43: Coach, Hugo Boss and Ray-Ban rank first, closely followed by Armani, Burberry, Cartier, Dior and Michael Kors. These have an overall high level of localization with respect to language, local currency and presence on Baidu, WeChat, Weibo and Youku. Most brands localize local content on WeChat, half panel on Websites and to a lesser extent on Newsletter. Celebrities play a significant role in local communications Strategic Reach – Chinese Customer Engagement Strategy (China, January, 2017)

Source: Contactlab Analysis

Currency on Web Product pages

Web Language Local Content on Website WeChat

(Chinese Social Media)WeChat Weekly Post Frequency

(Oct-Dec 2016)

Local Content on WeChat Post

(%, Oct-Dec 2016) Email Language Local content on Emails

Oct-Dec 2016

Coach 1 Certified Area RMB CN Gift guide / video for CN New Year YES signalled 1.33 47% YES signalled YES CN None Tang Yan, Li Yifeng (Events)

Hugo Boss 1 Certified Link RMB CNCelebrity interview / style advice for CN

New YearYES signalled 1.83 65% YES signalled YES CN

Chinese celebrity and product suggestion;

In shop activities and WeChat gameHuo Jianhua

Ray-Ban 1 Certified Link RMB CN Products customized for Asians YES signalled 1.00 62% YES signalled YES CN Mid-Autumn Festival Product suggestion;

Chinese National Holiday Product suggestion

Kris Wu

Armani 4 Certified Link RMB CN Gift guide for CN New Year YES signalled 1.33 31% YES signalled YES CNChinese National Holiday; Single Day

PromotionHu Ge (Emporio Armani)

Burberry 4 Certified Link RMB CNGift guide for CN New Year;

Celebrity Kris WuYES signalled 1.50 10% YES signalled YES CN The Kris Wu Edit Kris Wu

Cartier 4 Certified Area RMB CN Gift guide for CN New Year YES 1.00 75% YES signalled YES CN NoneFan Bingbing, Ni Ni (Events)

Lu Han (Juste un Clou Collection)

Dior 4 Certified Area RMB (beauty) CN Gift guide / offers for CN New Year YES 3.83 16% YES signalled YES CN NoneNi Ni, Li Yifeng, AngelaBaby, Yang Yang

(Events)Michael Kors 4 Certified Link RMB CN Special collection for CN New Year YES signalled 1.33 63% YES signalled YES CN None Yang Mi (Events)

Fendi 9 Certified Area No Price CNSpecial collection / video for CN New

YearYES signalled 2.08 48% YES signalled YES CN None Gogoboi, Chris Lee (Events)

Gucci 10 Certified Area No Price CN Special collection for CN New Year YES signalled 3.08 23% YES signalled YES CN NoneNi Ni (Eyewear)

Chris Lee (Timepieces and Jewelry)

Louis Vuitton 10 Certified Area RMB CNDedicated box for store in Beijing; Gift guide/ video for CN New Year

YES signalled 0.83 8% YES signalled YES CN None Tang Yan, Fan Bingbing, Jing Boran (Events)

Moncler 10 Certified Link RMB CN Special collection for CN New Year YES signalled 0.83 33% YES signalled YES CN None None

Chow Tai Fook 10 Certified Link RMB CNSpecial collection for Chinese New

YearYES signalled 4.08 36% YES signalled YES

No email option for Mainland

Chinan.a. None

Bulgari 14 Certified Area RMB(selected product) CN None YES 0.83 42% YES signalled YES CN None Kris Wu (Watch)Chanel 14 Certified Area RMB (beauty) CN None YES 2.75 29% YES YES CN Chinese E-commerce launch for beauty Hu Ge (Beauty)

Dolce&Gabbana 14 Certified Link RMB CN Special collection for CN New Year YES 0.92 19% YES signalled YES CN None None

Ferragamo 14 Certified Link RMB CN Gift guide for CN New Year YES signalled 1.00 33% YES signalled YESNo Email Received

None None

Valentino 14 Certified Area RMB CN None YES signalled 0.75 13% YES signalled YES CN None Yang Yang (Events)Bottega Veneta 19 Certified Area RMB CN Special collection / video for CN New Year YES signalled 0.92 0% YES signalled YES CN None None

Shanghai Tang 20 No Certified Link RMB CNGift guide for CN New Year

Traditional Chinese dresses (Qipao)YES signalled 1.42 41% YES signalled NO CN / EN None None

Ralph Lauren 21 Certified LinkNo product page on

Chinese WebsiteCN New Year Wishes for CN Customers YES 3.25 44% YES YES

No Email Received

None None

Swatch 21 No Certified Link No Price CN Gift guide / video for CN New Year YES signalled 0.83 22% YES signalled YES CN None NoneTod's 21 Certified Link RMB CN None YES 1.08 22% YES signalled YES CN None None

Tory Burch 24 Certified Link USDCN (Editorial focus), EN

(Ecommerce)New Year Wishes for CN Customers YES signalled 2.25 30% YES signalled YES

Welcome Email Only (CN)

None None

Zegna 25 Certified Area No Price CN None YES 1.08 37% YES signalled YES CN None Jing Boran (Events)Brunello Cucinelli 26 No Certified Link RMB CN None YES 1.33 31% YES NO CN None Liu Tao (Events)

Hermès 26 Certified Area No Price CN None YES 2.25 44% YES YES CN None NonePrada 28 Certified Area No Price CN None YES signalled 2.33 14% YES signalled NO CN None NoneTiffany 28 Certified Link No Price CN None YES 1.33 42% YES signalled NO CN None Ni Ni

Balenciaga 30 Certified Area RMB CN None YES 0.92 0% YES signalled NO CN None NoneSaint Laurent 30 Certified Link RMB CN None YES signalled 0.92 0% YES signalled NO CN None None

Givenchy 32 Certified Link GBPCN (Editorial focus), EN

(Ecommerce)None YES signalled 1.00 8% YES signalled YES CN None Chris Lee

Loro Piana 33 Certified Area EUR CN None YES 0.33 0% YES NOWelcome Email

Only (CN) None None

Céline 34 Certified Link EUR CN None NO No WeChat Account No WeChat Account NO NOWelcome Email

Only (CN) None None

Brand Area Box(Certified by Baidu)

RMB(Chinese currency)

Chinese YESWeChat Account

signalled on Brand web page

Above 2 posts per weekAbove 40% of post with local content

Weibo Account signalled on Brand web

pageYes, Account on Youku Chinese YES YES (Websites, Social Media, Emails…)

Text Description(Certified by Baidu)

USD / EUR / GBPMixed

Chinese-English

WeChat Account not signalled on Brand

web page0,5 - 2 posts per week

Between 10% and 40%

Weibo Account not signalled on Brand web

page

English/Welcome Email Only (Chinese)

Text Not Certified by Baidu

No prices English NO No Account Below 0.5 posts per weekMarginal (below

10%)No Official Account No

No China country option for newsletter

NO NO

CUSTOMER ENGAGEMENT STRATEGY FOR CHINESE CUSTOMERS

Major Local Celebrities & Fashion bloggers(Jul 2016 - Jan 2017)Brand Ranking

Baidu(China Search

Engine)

Website WeChatWeibo

(Chinese Social Media)

Youku(ChineseVideo Web

Platform)

Email

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 29

Figure 44: Baidu Search Engine: Example Chanel Certified Brand Area Box

Source: Contactlab Analysis

Figure 45: Baidu Search Engine: Example of Ray-Ban Certified Text Description

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 30

Figure 46: Shanghai Tang giving attention to Chinese heritage, with its Luxury Iconic Qipao dresses Local Content on Website – The example of Shanghai Tang

Source: Contactlab analysis

Figure 47: Ray-Ban gives particular attention to the Asian market via eyewear customization Local Content on Website - The example of Ray-ban

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 31

Figure 48: Hugo Boss best practice Chinese New Year campaign with Chinese Celebrity Huo Jianhua on Website and WeChat Local Content on Website – The example of Hugo Boss

Source: Contactlab Analysis

Figure 49: Burberry features local celebrity Kris Wu Local Content on Website – The example of Burberry

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 32

Figure 50: Chinese New Year special collection and gift guide. QR code allows customers to explore more about the collection via mobile Local Content on Website – The example of Bottega Veneta

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 33

Figure 51: WeChat account (1/2) The example of Tiffany

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 34

Figure 52: WeChat account (1/2) The example of Valentino

Source: Contactlab Analysis

Figure 53: Valentino website – signalling WeChat, Weibo and Youku icons on homepage

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 35

Figure 54: Pop-up highlighting Newsletter and WeChat Following The example of Fendi website

Source: Contactlab Analysis

Figure 55: Local Event on WeChat (1/2) The example Gucci – ‘GHOST’ Event in Chengdu

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 36

Figure 56: Local Event on WeChat (2/2) The example of Hermès – Party in Shanghai

Source: Contactlab Analysis

Figure 57: Local Shopping Day on WeChat The example of Coach – Single Day voucher (11 Nov)

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 37

Figure 58: Weibo Account The example of Michael Kors

Source: Contactlab Analysis

Figure 59: YouKu account The example of Bulgari

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 38

Figure 60: Young generations show an increasing interest in Fashion & Luxury Newsletters % of Subscribers to Fashion & Luxury Newsletters by Age (China, % respondents)

Source: Contactlab European (+) Digital Behaviour Study 2016

Figure 61: Local Event on Newsletter The example Bulgari – Wishes for Mid-Autumn Festival

Source: Contactlab Analysis

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

16-24 25-34 35-44 45-54 54+

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 39

Figure 62: Local Shopping Day on Newsletter The example of Armani Single Day sales (11 Nov)

Source: Contactlab Analysis

Figure 63: Drive to Store on Newsletter The example of Hugo Boss

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 40

Figure 64: Use of major local celebrities & fashion blogger: Jing Boran The example of Louis Vuitton Newsletter for New Collection launch

Source: Contactlab Analysis

Figure 65: Use of major local celebrities & fashion blogger: singer/actor Kris Wu The example Ray-Ban Limited Edition Sunglasses on Newsletter

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 41

Figure 66: Use of major local celebrities & fashion blogger: actor Hu Ge The example for Chanel No.5 campaign on WeChat

Source: Contactlab Analysis

Figure 67: Use of major local celebrities & fashion blogger: actress Fan Bingbing The example of Cartier at its Magicien Jewelry Exhibition in Shanghai

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 42

Figure 68: Use of major local celebrities & fashion blogger: singer Chris Lee The example of Gucci on WeChat

Source: Contactlab Analysis

Figure 69: Use of major local celebrities & fashion blogger: Gogoboi (fashion blogger) The example Fendi Social Campaign on Weibo

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 43

Digital experience for Chinese Customers

Figure 70: Michael Kors, Burberry and Cartier leading the Digital Customer Experience axis. Namely, Burberry, Louis Vuitton and Dior excelling in Style Advisory. Cross-Channel Services still quite neglected in China, only Burberry and Loro Piana standing out Digital Experience Axis – Overall Brand Ranking (China, January 2017)

Source: Contactlab Analysis

Brand SCORE RANKING

Display Visualization

on China Websites

Product Presentation

on China Website

Product Selection

Support on China Website

Basic Customer Service on China

Websites

Personal Services on

China Websites

Online Shoppingon China Websites

Delivery Optionsin China

Store Finder

Cross-Channel Services In

China

Email Proficiencyfor Chinese Customers

Shareon China/Intl.

Websites

Appsfor Chinese Customers

Michael Kors 117 1 1 6 7 1 6 1 2 10 7 14 2 14Burberry 116 2 1 1 7 10 4 10 7 4 1 1 2 25Cartier 114 3 1 18 6 10 1 5 13 4 4 13 12 1Coach 108 4 1 18 1 1 13 2 3 17 4 25 2 23Chanel 106 5 1 18 12 1 13 4 7 8 12 8 8 7Dior 105 6 1 18 23 1 2 5 3 10 12 5 28 7Hugo Boss 98 7 1 6 12 1 3 12 1 30 12 14 2 19Loro Piana 96 8 1 1 4 8 9 20 13 15 1 28 7 23Valentino 94 9 1 6 12 10 7 12 19 24 12 1 12 5Armani 94 10 1 6 12 10 9 17 7 17 12 5 12 14Balenciaga 92 11 1 6 12 24 20 5 19 17 4 1 12 19Ray-Ban 90 12 1 3 23 1 8 12 13 24 12 8 28 14Louis Vuitton 88 13 1 18 4 10 4 26 19 1 12 5 8 1Chow Tai Fook 88 13 1 29 3 1 23 2 13 33 3 28 28 7Tod's 87 15 1 18 17 10 16 12 3 10 12 8 28 25Tory Burch 84 16 1 3 1 9 25 17 19 10 12 28 12 12Shanghai Tang 81 17 1 6 17 10 16 9 18 21 7 18 12 25Moncler 78 18 33 18 17 24 28 12 7 15 12 8 26 19Brunello Cucinelli 73 19 1 18 7 26 26 17 7 30 7 25 1 25Dolce & Gabbana 72 20 1 6 7 26 28 10 13 28 12 22 12 25Givenchy 72 20 1 6 17 10 28 21 7 4 7 27 28 7Ferragamo 68 22 1 6 23 10 15 5 3 34 12 28 12 25Gucci 68 22 1 6 17 10 26 32 19 4 12 1 2 5Bulgari 64 24 1 6 7 10 23 22 19 27 11 12 25 14Swatch 62 25 1 29 23 10 20 32 19 3 12 14 12 1Tiffany 55 26 1 6 17 26 16 26 19 24 12 22 26 1Fendi 52 27 1 29 32 10 12 32 19 8 12 18 12 14Zegna 52 28 1 3 27 26 11 26 19 21 12 17 28 25Bottega Veneta 49 29 1 18 30 26 16 22 19 10 12 22 12 25Saint Laurent 45 30 1 18 27 31 28 22 19 21 12 18 8 19Prada 39 31 33 18 32 31 20 26 19 28 12 18 12 12Hermès 36 32 1 32 29 31 28 26 19 17 12 28 12 7Ralph Lauren 35 33 1 34 32 10 28 26 19 1 12 28 28 25Céline 27 34 1 32 30 31 28 25 19 30 12 28 8 25

CUSTOMER ENGAGEMENT EXPERIENCEFOR CHINESE CUSTOMERS

CROSS-CHANNEL EXPERIENCEFOR CHINESE CUSTOMERS

ECOMMERCE EXPERIENCEON CHINESE WEBSITESWEBSITE EXPERIENCE ON CHINESE WEBSITES

DIGITAL EXPERIENCE AXIS FOR CHINESE CUSTOMERS - RANKINGS

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 44

Figure 71: Only Prada and Moncler requiring flash plug-in for videos (1/2) Digital Experience Axis – Display Visualization on China Websites (China, January 2017)

Source: Contactlab Analysis

Figure 72: Only Prada and Moncler requiring flash plug-in for videos (2/2)

Source: Contactlab Analysis

Brand Ranking Flash Plug-In Required for Videos Mobile adapted website

Armani 1 NO YESBalenciaga 1 NO YESBottega Veneta 1 NO YESBrunello Cucinelli 1 NO YESBulgari 1 NO YESBurberry 1 NO YESCartier 1 NO YESCéline 1 NO YESChanel 1 NO YESCoach 1 NO YESDior 1 NO YESDolce & Gabbana 1 NO YESFendi 1 NO YESFerragamo 1 NO YESGivenchy 1 NO YESGucci 1 NO YESHermès 1 NO YESHugo Boss 1 NO YESLoro Piana 1 NO YESLouis Vuitton 1 NO YESMichael Kors 1 NO YESRalph Lauren 1 NO YESRay-Ban 1 NO YESSaint Laurent 1 NO YESSwatch 1 NO YESTiffany 1 NO YESTod's 1 NO YESTory Burch 1 NO YESValentino 1 NO YESZegna 1 NO YESChow Tai Fook 1 NO YESShanghai Tang 1 NO YESMoncler 32 Optional (Video) YESPrada 32 Optional (Video) YES

Not required Yes adaptedRequired for videos Partially adapted (some horizontal scrolling, only some pages)

Required for website visualization Not adapted

DISPLAY VISUALIZATION ON CHINA WEBSITES

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 45

Figure 73: The example Chow Tai Fook desktop and mobile adapted websites

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 46

Figure 74: Only four brands integrate product pages with videos. Ray-Ban offering virtual mirror. Model measure less adopted than in US Digital Experience Axis – Product Presentation on China Websites (China, January 2017)

Source: Contactlab Analysis

Brand Ranking Video with worn products Pictures from different angles Zoom on Details Model measures

Burberry 1 YES (Selected products) YES YES YESLoro Piana 1 YES (Selected products) YES YES (mouseover) NORay-Ban 3 Virtual mirror YES YES n.a (no RTW)Tory Burch 3 YES (Selected products) YES YES NOZegna 3 NO YES YES (mouseover) YESArmani 6 NO YES YES YESBalenciaga 6 NO YES YES YESBulgari 6 NO Yes (Selected products) YES (mouseover) n.a (no RTW)Dolce & Gabbana 6 NO YES YES YESFerragamo 6 NO YES YES (mouseover) n.a (no RTW on web)Givenchy 6 NO YES YES YESGucci 6 NO YES YES YESHugo Boss 6 NO YES YES (mouseover) NO (vs YES US)Michael Kors 6 NO YES YES (mouseover) NO (vs YES US)Tiffany 6 NO Yes (Selected products) YES (mouseover) n.a (no RTW)Valentino 6 NO YES YES YESShanghai Tang 6 NO YES (Model and mannequin) YES (mouseover) NOBottega Veneta 18 NO YES YES NOBrunello Cucinelli 18 NO YES YES NO (vs YES US)Cartier 18 NO YES YES n.a (no RTW)Chanel 18 NO YES YES NOCoach 18 NO YES YES NO (vs YES US)Dior 18 NO YES YES NOLouis Vuitton 18 NO YES YES NOMoncler 18 NO YES YES NOPrada 18 NO YES YES n.a (no RTW on web)Saint Laurent 18 NO Yes (Selected products) YES NOTod's 18 NO YES YES n.a (no RTW on web)Fendi 29 NO YES NO n.a (no RTW on web)Swatch 29 NO Yes (Selected products) NO n.a (no RTW)Chow Tai Fook 29 NO YES NO n.a (no RTW)Céline 32 NO NO YES NOHermès 32 NO NO YES n.a (no RTW on web)

Ralph Lauren 34 No product page on Chinese Website

No product page on Chinese Website

No product page on Chinese Website

No product page on Chinese Website

Offered Offered Offered with mouseover Offered Offered with click

Not offered Not offered Not offered Not offered

PRODUCT PRESENTATION ON CHINA WEBSITES

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 47

Figure 75: Ray-Ban offering Virtual Mirror tool, with two options: models and self

Source: Contactlab Analysis

Figure 76: Shanghai Tang offering two types of product views: model and mannequin

Source: Contactlab Analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 48

Figure 77: Coach and Tory Burch leading, closely followed by Chow Tai Fook, Loro Piana, Louis Vuitton. Very important customer reviews for the Chinese market offered only by Chow Tai Fook, Coach and Tory Burch (although from the US, not Chinese website) Digital Experience Axis – Product Selection Support on China Websites (China, January 2017)

Source: Contactlab Analysis

Figure 78: Example Zegna offering “Discover the look”

Source: Contactlab Analysis

Brand Ranking Wishlist Recently viewed

You might also like(same product

category)

Match with,Complete the

Look

Shop/discover the Look Shop by Occasion Size guide table Customers Reviews

Coach 1 YES YES YES YES NO NO YES CN (Reviews)Tory Burch 1 YES YES YES YES YES YES (eg. Workweek Chic / Parties & Events) YES EN (Rating and reviews)Chow Tai Fook 3 YES YES YES NO n.a YES (eg. Bridal Collection) YES CN (Rating and reviews)Loro Piana 4 YES NO YES YES YES YES (eg. Skiing / Sailing / Vintage Cars) YESLouis Vuitton 4 YES YES YES YES YES NO YES (Shoes only)Cartier 6 YES NO YES YES n.a YES (eg. Bridal Collection) YESBrunello Cucinelli 7 YES NO NO YES YES NO YESBulgari 7 YES NO YES YES n.a YES (eg. Bridal Collection) NO (vs YES in US)Burberry 7 NO (vs YES in US) NO YES YES YES YES (eg. Winter Weekend / Night Wear) YESDolce & Gabbana 7 YES YES NO YES NO NO YESMichael Kors 7 YES NO YES YES NO NO (vs YES in US) YESArmani 12 YES NO YES NO YES NO YESBalenciaga 12 YES NO NO YES NO NO YESChanel 12 YES NO YES YES (Beauty) YES NO NOHugo Boss 12 YES YES NO NO NO (coming soon) YES (eg. Travel Collection) YESValentino 12 YES NO NO YES NO NO YESGivenchy 17 NO NO NO YES YES NO YESGucci 17 NO (vs YES in US) YES NO YES YES NO NO (vs YES in US)Moncler 17 YES YES NO (vs YES in US) NO NO NO YESTiffany 17 YES NO YES NO n.a YES (eg. Engagement / Wedding Collection ) NO (vs YES in US)Tod's 17 YES NO YES NO NO NO YESShanghai Tang 17 NO NO NO YES NO YES (eg. Wedding / Graduation gift options) YESDior 23 NO YES YES YES (Beauty) NO NO NOFerragamo 23 YES NO NO NO NO NO YESRay-Ban 23 YES NO YES n.a n.a n.a NO

Swatch 23 YESNO (vs YES in

US)YES n.a n.a n.a NO

Saint Laurent 27 NO (vs YES in US) YES NO (vs YES in US)NO (vs YES in

US)NO NO YES

Zegna 27 NO NO NO NO YES NO YESHermès 29 YES (Scarves) NO YES (Scarves) NO NO (vs YES in US) NO (vs YES in US) NOBottega Veneta 30 NO (vs YES in US) NO NO (vs YES in US) NO YES NO NO (vs YES in US)Céline 30 NO NO NO NO YES NO NO

Fendi 32 NO (vs YES in US)NO (vs YES in

US)NO (vs YES in US)

NO (vs YES in US)

NO NO NO (vs YES in US)

Prada 32 NO NO NO NO NO NO NO

Ralph Lauren 32No product page

on Chinese Website

No product page on Chinese Website

No product page on Chinese Website

No product page on Chinese

Website

No product page on Chinese

WebsiteNo product page on Chinese Website

No product page on Chinese

Website

Offered Offered Offered Offered Offered Offered Offered YES, in Chinese Partial YES, in English

Not offered Not offered Not offered Not offered Not offered Not offered Not offered NO

PRODUCT SELECTION SUPPORT ON CHINA WEBSITES

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 49

Figure 79: Example Burberry offering “Shop by Occasion” (Winter Weekend)

Source: Contactlab analysis

Figure 80: Example Shanghai Tang offering “Shop by Occasion” (Graduation gifts)

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 50

Figure 81: Example Chow Tai Fook offering detailed “Size Guide”

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 51

Figure 82: Example Shanghai Tang “Size Guide” table

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 52

Figure 83: Example Chow Tai Fook offering customers “Product Reviews and Rating”

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 53

Figure 84: Example Coach offering “Customers Reviews”

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 54

Figure 85: Only Chow Tai Fook and six International brands offer Online Chat in Chinese Digital Experience Axis – Basic Customer Service on China Websites (China, January 2017)

Source: Contactlab analysis

Brand Ranking Web Online Chat Phone Assistance

Email Assistance

Chanel 1 CN CN CN

Coach 1 CN CN CN

Dior 1 CN (Fashion) CN CNHugo Boss 1 CN CN CNMichael Kors 1 CN CN CNRay-Ban 1 CN CN CNChow Tai Fook 1 CN CN CNLoro Piana 8 EN CN CNTory Burch 9 EN EN ENShanghai Tang 10 NO CN CNArmani 10 NO CN CNBulgari 10 NO CN CNBurberry 10 NO CN CNCartier 10 NO CN CNFendi 10 NO CN CNFerragamo 10 NO CN CNGivenchy 10 NO CN CNGucci 10 NO CN CNLouis Vuitton 10 NO CN CNRalph Lauren 10 NO CN CNSwatch 10 NO CN CNTod's 10 NO CN CNValentino 10 NO CN CNBalenciaga 24 NO CN Not activeMoncler 24 NO CN Not activeBottega Veneta 26 NO NO CNBrunello Cucinelli 26 NO NO CNDolce & Gabbana 26 NO NO CNTiffany 26 NO NO CNZegna 26 NO NO CNCéline 31 NO NO NOHermès 31 NO NO NOPrada 31 NO NO NOSaint Laurent 31 NO NO NO

Offered in ChineseOffered in Chinese

Offered in Chinese

Offered in EnglishOffered in

EnglishOffered in

English

Not Offered Not Offered Not Offered

*Product availability, delivery, payment…

BASIC CUSTOMER SERVICE ON CHINA WEBSITES*

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 55

Figure 86: Burberry giving lots of attentions on Customer Service (phone, Weibo, WeChat, Email) in Chinese

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 56

Figure 87: Dior very complete Customer Service (Email, chat, phone) in Chinese

Source: Contactlab analysis

Figure 88: Chanel example “Online Chat ’’ in Chinese

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 57

Figure 89: Louis Vuitton not offering “Assistant via Chat ’’ in China, vs yes in US

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 58

Figure 90: Overall Cartier leading, followed by Dior and Hugo Boss. Burberry excelling for Style Advisory completeness, including Weibo. Overall Made to Measure services well developed, Style Advisor and Book an Appointment less Digital Experience Axis – Personal Services on China Websites (China, December 2016)

Source: Contactlab analysis

Brand Ranking Style Advisor: Online Chat*

Style Advisor:Phone Assistance*

Style Advisor:E-mail Assistance*

Style Advisor: WeChat Assistance*

Style Advisor:Weibo*

Book an Appointmentin Chinese Stores Make to Order

Cartier 1 NO CN Extra Effort CN (Refer to phone) Extra Effort NO YES After Service - jewelry engraving/polishing/resizing/restoration/pairing (offline)

Dior 2 CN Extra Effort CN Extra Effort CN Extra Effort NO NO YES Personalization: add charms "Lucky Badge" to bags (offline)Hugo Boss 3 CN CN No Reply NO NO YES (Made to measure) Made-to-measure (offline)Burberry 4 NO CN Extra Effort CN Extra Effort Extra Effort YES NO Monogramming scarves & perfumes (online)Louis Vuitton 4 NO CN Extra Effort CN Extra Effort Extra Effort NO NO Initials on leather goods by stamping or printing (online); make-to-order shoes (offline)Michael Kors 6 CN CN No Reply Extra Effort NO NO Customized bag collection (online)

Valentino 7 NO NOCN (Refer to WeChat) YES

NOYES (personalized look

and tailoring service)Bag strips and initials(offline)

Ray-Ban 8 CN CN CN Extra Effort NO NO NO Customized sunglasses (online)Armani 9 NO NO CN NO NO YES (Made to measure) Made-to-measure (offline)Loro Piana 9 EN CN Extra Effort CN NO NO NO Made To Measure Services: suits/Jackets, Shirts, Men's Knitwear, TiesZegna 11 NO NO CN (Refer to store) NO NO YES Made-to-measure (offline)Fendi 12 NO CN Extra Effort CN (Refer to store/WeChat/NL) NO NO NO Made-to-measure (offline)Chanel 13 CN Extra Effort CN Extra Effort CN (Refer to store) NO NO NO NO

Coach 13CN

CN (Refer to online chat / store)

NO Extra Effort

NO NOInitials on Chinese website/stores

Ferragamo 15 NO CN No Reply NO NO NO Made to Measure shoes (offline)Bottega Veneta 16 NO NO CN (Refer to store) NO NO NO Customized(material, colors) and Monogramming: bags, SLG (offline)Tiffany 16 NO NO CN (Refer to store) NO NO YES (Diamond Expert) NOTod's 16 NO No Reply CN (Refer to store) NO NO NO Made to Measure shoes (offline)Shanghai Tang 16 NO NO EN NO NO NO Made-to-measure (offline)Balenciaga 20 NO NO Not active NO NO YES NOPrada 20 NO NO NO NO NO NO Made-to-measure (offline)

Swatch 20 NO No Reply NO NO NOYes (Product consultant

for specific product)NO

Bulgari 23 NO CN (Refer to store) No Reply YES NO NO Jewelry and pen engraving (offline)Chow Tai Fook 23 CN CN (Refer to store) No Reply NO NO NO Jewelry engraving on Chinese website/storesTory Burch 25 EN EN EN NO NO NO Made to Order: add initials to bags , SLG / Add charm to bags (online)Brunello Cucinelli 26 NO NO CN Extra Effort NO NO NO NOGucci 26 NO CN (Refer to store) NO NO NO NO Initials for SLGs (offline)Céline 28 NO NO NO No WeChat Account NO NO NODolce & Gabbana 28 NO NO NO NO NO NO NOGivenchy 28 NO NO No Reply NO NO NO NOHermès 28 NO NO NO NO NO NO NOMoncler 28 NO NO Not active NO NO NO NORalph Lauren 28 NO NO No Reply NO NO NO NOSaint Laurent 28 NO NO NO NO NO NO NO

Offered in Chinese Offered in Chinese Offered in Chinese Extra effort Yes Offered at Chinese stores Products on Chinese website / stores

Offered in EnglishSupport for refer to

storeOffered in English/

Refer to storeOffered Initials on Chinese website / stores

Not Offered Not Offered Not Offered Not Offered NoNot Offered at Chinese

storesNot Offered in China

* tested in December 2016

PERSONAL SERVICES ON CHINA WEBSITES

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 59

Figure 91: Style Advisory while shopping particularly relevant for Chinese Customers Being able to contact a style advisor via chat, email or phone while shopping online (% of respondents)

Source: Contactlab European (+) Digital Behaviour Study 2016

Figure 92: Dior best practice in “Style Advisory via Online Chat’’ with link for product suggestions

Source: Contactlab analysis

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

WW Customers Chinese Customers

Extremely+Very important Extremely+Very+ Quite important

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 60

Figure 93: Louis Vuitton best practice in “Style Advisory via Phone’’, followed by SMS with links for product suggestions

Source: Contactlab analysis

Figure 94: Dior extra effort in “Style Advisory via Email” for argumentation

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 61

Figure 95: Brunello Cucinelli extra effort in “Style Advisory via Email’’: suggested products also with photos in boutique. In addition, follow-up email after one week

Source: Contactlab analysis

Figure 96: Cartier best practice in “Style Advisory via WeChat’’: suggested products with images and prices

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 62

Figure 97: Michael Kors best practice in “Style Advisory via WeChat’’: suggested products with images and prices

Source: Contactlab analysis

Figure 98: Burberry best practice in “Style Advisory via Weibo’’: suggested products with link to website

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 63

Figure 99: Zegna best practice in “Book an Appointment’’: Try on in store’ with possibility to select Boutique and Timing

Source: Contactlab analysis

Figure 100: Swatch example “Book an Appointment’’ 1-to-1 free consultant service

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 64

Figure 101: Ray-Ban best practice in Customization: choices of lenses, frames and case. Also possibility to engrave messages on frames

Source: Contactlab analysis

Figure 102: Prada offering “Made to Measure’’ service

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 65

Figure 103: Bottega Veneta “Customization Atelier’’ service

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 66

Figure 104: Hugo Boss offering “Made to Measure’’ service combined with Book an Appointment

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 67

Figure 105: Shanghai Tang offering “Made to Measure’’ service

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 68

Figure 106: American brands Michael Kors and Coach plus Chow Tai Fook leading the easiness of the online shopping experience. Alipay and Cash on Delivery widely adopted, while only Ferragamo, Chanel, and Dior offer WeChat Pay among European brands. Only Chow Tai Fook offering Instalment payment Digital Experience Axis – Online Shopping on China Websites (China, January 2017)

Source: Contactlab analysis

Brands RankingVideo in homepage

without slowing downPurchasing Process

Shop evidenceon Chinese Homepage

Minimum clicksto shopping bag E-commerce mobile Price Evidence Quick Buy Option Alipay WeChat Pay PayPal Cash on delivery Extra effort

(Installment…)

Michael Kors 1 YES HIGH 3 YES YES YES YES YES NO YESCoach 2 NO HIGH 3 YES YES YES YES YES NO YESChow Tai Fook 2 NO HIGH 3 YES YES YES YES YES NO NO Installment Chanel 4 YES HIGH 2 YES YES YES YES YES NO NOBalenciaga 5 NO HIGH 3 YES YES (mouseover) YES YES NO NO YESCartier 5 NO HIGH 3 YES YES (mouseover) YES YES NO NO YESDior 5 YES NO 3 YES YES (Beauty) YES YES YES NO YESFerragamo 5 NO HIGH 3 YES YES (mouseover) NO (vs YES in US) YES YES NO NOShanghai Tang 9 NO HIGH 3 YES YES YES YES NO NO YESBurberry 10 YES HIGH 3 YES YES YES YES NO NO NODolce & Gabbana 10 YES (animation) HIGH 3 YES YES YES YES NO NO NOHugo Boss 12 NO HIGH 3 YES YES NO (vs YES in US) YES NO NO YESMoncler 12 NO HIGH 3 YES YES NO (vs YES in US) YES NO NO YESRay-Ban 12 NO HIGH 3 YES YES YES YES NO NO NOTod's 12 NO HIGH 3 YES YES YES YES NO NO NOValentino 12 NO HIGH 3 YES YES NO (vs YES in US) YES NO NO YESArmani 17 NO HIGH 4 YES YES NO (vs YES in US) YES NO NO YESBrunello Cucinelli 17 NO HIGH 4 YES YES YES YES NO NO NOTory Burch 17 YES HIGH 3 YES YES YES NO NO YES NOLoro Piana 20 YES (animation) HIGH 2 YES YES NO NO NO NO YESGivenchy 21 YES HIGH 3 YES (IOS APP) YES (only app) YES NO NO YES NOBottega Veneta 22 YES (animation) no China ecommerce no China ecommerce no China ecommerce YES (mouseover) no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceBulgari 22 YES no China ecommerce no China ecommerce no China ecommerce YES (mouseover) no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceSaint Laurent 22 YES no China ecommerce no China ecommerce no China ecommerce YES (mouseover) no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceCéline 25 YES no China ecommerce no China ecommerce no China ecommerce YES no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceHermès 26 YES (animation) no China ecommerce no China ecommerce no China ecommerce NO no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceLouis Vuitton 26 NO no China ecommerce no China ecommerce no China ecommerce YES no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommercePrada 26 YES no China ecommerce no China ecommerce no China ecommerce NO no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerce

Ralph Lauren 26 YES no China ecommerce no China ecommerce no China ecommerceNo product page on

Chinese Websiteno China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerce

Tiffany 26 YES (animation) no China ecommerce no China ecommerce no China ecommerce NO no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceZegna 26 NO no China ecommerce no China ecommerce no China ecommerce YES no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceFendi 32 NO no China ecommerce no China ecommerce no China ecommerce NO no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceGucci 32 NO no China ecommerce no China ecommerce no China ecommerce NO no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceSwatch 32 NO no China ecommerce no China ecommerce no China ecommerce NO no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerce

Partial screen video, not interfering on Homepage

Shop button or E-store button

2-3 click Via Web

Yes displayed on product page and on category page with

mouseover

Offered Offered Offered Offered Offered Offered

No video on Homepage Shopping bag 4-5 clicks Only via App

Yes displayed on product page and/or on category page without

mouseoverFull screen video and

always interfering (skip) on Homepage

No E-commerce evidence

More than 5 clicks Not feasible Not displayed Not offered Not offered Not offered Not offered Not offered Not offered

ONLINE SHOPPING ON CHINA WEBSITES

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 69

Figure 107: Ferragamo, one of the few Western brands offering WeChat Pay

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 70

Figure 108: Chow Tai Fook offering Instalment Payment

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 71

Figure 109: Only six players offering fast delivery within three days. However, brands importing from European warehouses cannot assure quick delivery Digital Experience Axis – Delivery options in China Websites (China, January 2017)

Source: Contactlab analysis

Figure 110: Example Balenciaga long delivery times from Europe

Source: Contactlab analysis

Brands Ranking Free shipping (Standard) Standard Delivery Express Delivery Same/Next Day Delivery Weekend Delivery

Hugo Boss 1 Free above 3000 RMB 3-5 working days 1-3 WORKING DAYS NO YESMichael Kors 2 YES 2-5 working days Not Offered Same Day (for Shanghai) NOCoach 3 NO 1-5 days (with SF courier) Not Offered NO YESDior 3 YES 1-2 days Not Offered NO NOFerragamo 3 YES 5-7 working days Not Offered NO YESTod's 3 YES 1-3 days Not Offered NO NOArmani 7 NO (50 RMB) 3-5 working days 1-2 WORKING DAYS NO NOBrunello Cucinelli 7 YES Within 5 working days Not Offered NO NOBurberry 7 YES 1-5 days after shipping Not Offered NO NOChanel 7 YES 1-5 days Not Offered NO NOGivenchy 7 NO (15 USD) 2-3 working days Not Offered NO NOMoncler 7 NO (50 RMB) 3-5 working days 1-2 WORKING DAYS NO NOCartier 13 YES Within 7 days Not Offered NO NODolce & Gabbana 13 NO (260 RMB) 3-4 working days Not Offered NO NOLoro Piana 13 NO Within 5 days Not Offered NO NORay-Ban 13 YES 2-7 working days Not Offered NO NOChow Tai Fook 13 YES shipped within 72 hours, arrival not specified Not Offered NO NOShanghai Tang 18 Free over 2000 RMB Within 7 working days Not Offered NO NO Balenciaga 19 NO (100 RMB) 11-15 working days arrive, shipped from Italy Not Offered NO NOTory Burch 19 NO shipped in 1-2 working days, arrival not specified Not Offered NO NOValentino 19 NO (95 RMB) 11-15 working days Not Offered NO NOBottega Veneta 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceBulgari 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceCéline 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceFendi 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceGucci 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceHermès 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceLouis Vuitton 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommercePrada 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceRalph Lauren 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceSaint Laurent 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceSwatch 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceTiffany 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerceZegna 19 no China ecommerce no China ecommerce no China ecommerce no China ecommerce no China ecommerce

Free with no tickets limits maximum 3 days Offered Same day All ChinaFree above Ticket Treshold maximum 5 days Next day Selected areas

Always paid 5 or more / not declared Not offered Not offering Not offered

DELIVERY OPTIONS IN CHINA

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 72

Figure 111: Only Michael Kors offering Same Day Delivery

Source: Contactlab analysis

Figure 112: Coach offering many delivery options, including Weekend Delivery, and preview of free gift packaging

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 73

Figure 113: Example Chanel different delivery time can vary by destination

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 74

Figure 114: Louis Vuitton and Ralph Lauren leading, followed by Givenchy Digital Experience Axis – Store Finder (China, January 2017)

Source: Contactlab analysis

Brand Ranking Identification on Homepage Visibility Store Search

Ask for Client Localization on

Desktop

Ask for Client Localization on

Mobile

Store Segmentation Details Map Print Photo boutique Phone

number Opening day/hours Email to Store Referral in store

Louis Vuitton 1 Boutiques HIGH Manually prompted YES YES Products/Service YES NO Specific Sphoto (most stores) YES YES NO NORalph Lauren 1 Boutique locator HIGH Automatic YES YES Brand/Gender/Products YES NO NO YES YES NO NOSwatch 3 Store locator HIGH Automatic YES YES Service YES YES NO YES YES NO NOBurberry 4 Store locator HIGH Automatic YES YES Service/Products/Gender YES NO NO YES YES NO NOCartier 4 Store locator HIGH Manually prompted YES YES Products/Service YES NO Generic photo YES YES YES NOGivenchy 4 Stores HIGH Manually prompted NO YES Products/Gender YES YES Specific Sphoto (most stores) YES YES NO NOGucci 4 Boutique locator LOW Automatic YES YES Gender/Products YES YES Generic photo YES YES NO NOChanel 8 Store locator MEDIUM Automatic YES YES Products YES YES NO YES YES NO NOFendi 8 Fendi store locator HIGH Manually prompted YES YES Products/Gender YES NO Specific photo (few stores) YES YES NO NOBottega Veneta 10 Boutique locator LOW Automatic YES YES Gender/Products YES NO NO YES YES NO NODior 10 Boutiques LOW Manually prompted YES YES Products/Gender/Service YES YES Generic photo YES YES NO NOMichael Kors 10 Boutique Guide HIGH Automatic YES YES NO YES NO NO YES NO NO NOTod's 10 Boutiques HIGH Automatic NO NO Service/Products YES NO NO YES YES YES NOTory Burch 10 Find a Store HIGH Automatic YES YES NO YES NO NO YES YES NO NOLoro Piana 15 Store locator HIGH Manually prompted NO NO Service YES NO Specific drawing YES YES NO Store ManagerMoncler 15 Boutiques HIGH Manually prompted NO YES Gender YES NO NO YES NO YES NOArmani 17 Stores HIGH Manually prompted YES YES Brand/Gender YES NO NO YES NO NO NOBalenciaga 17 Boutiques HIGH Automatic NO NO Gender/Products NO NO NO YES YES YES NOCoach 17 Boutiques HIGH Automatic NO NO Products/Gender/Service YES NO NO YES YES NO NOHermès 17 Nearest Boutique HIGH Manually prompted YES NO NO YES YES NO YES YES NO NOSaint Laurent 21 Boutique locator MEDIUM Manually prompted NO YES Gender/Products NO NO Specific photo (few stores) YES YES NO NOZegna 21 Store locator HIGH Manually prompted NO NO Service YES YES NO YES YES YES NOShanghai Tang 21 Store locator HIGH Automatic NO NO NO YES YES Specific photo (few stores) YES YES NO NORay-Ban 24 Store locator HIGH Manually prompted YES YES NO YES NO NO YES NO NO NOTiffany 24 Boutiques HIGH Manually prompted NO NO NO YES NO Specific Sphoto (most stores) YES YES NO NOValentino 24 Store locator HIGH Automatic NO NO Gender/Products/Service YES NO NO YES YES NO NOBulgari 27 Store locator HIGH Automatic YES NO Products YES NO NO YES NO NO NODolce & Gabbana 28 Store locator LOW Manually prompted YES YES NO YES YES NO YES NO NO NOPrada 28 Find a boutique LOW Manually prompted YES NO Gender/Products YES NO NO YES YES NO NOBrunello Cucinelli 30 Boutiques LOW Manually prompted NO NO NO YES YES NO YES YES NO NOCéline 30 Boutiques MEDIUM Manually prompted NO NO NO YES NO NO YES YES NO NO

Hugo Boss 30 Store locator HIGH Automatic NO NOGender/Products/Made to

measureYES NO NO NO NO NO NO

Chow Tai Fook 33 Store locator HIGH Manually prompted NO NO NO NO NO NO YES YES NO NOFerragamo 34 Stores HIGH Manually prompted NO NO NO NO NO NO YES NO NO NO

"Luxury Goods" naming

High: no scrolling, large font, specific

bannerAutomatic Requested Requested Two criteria

Shows Map

Allow map printing

Specific Store picturePhone

Number available

Opening Hours available (excluding SIS locations)

E-mail to Store possible

Contact provided

Minimum personalization

namining

Medium: no scrolling, no drop

down menu, small font

One criteriaSpecific Store picture for

selected locations Selected stores

(excluding SIS locations)

"Mass Market" naming

Low: scrolling, drop down menu,

footerManually prompted Not requested Not requested No criteria No map

No map printing

No picture or generic photo No Phone

Number not available

Opening Hours not mentioned (excluding

SIS locations)

E-mail to Store not possible

No contact

STORE FINDER

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 75

Figure 115: Chow Tai Fook very visible Store Locator in Homepage

Source: Contactlab analysis

Figure 116: Givenchy Store Finder with specific Store Picture (example Plaza 66, Shanghai)

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 76

Figure 117: Shanghai Tang Store Finder with specific Store Picture in Shanghai and Hong Kong

Source: Contactlab analysis

Figure 118: Loro Piana with specific Boutique Drawing and Referral In-Store also on Chinese Website

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 77

Figure 119: Cross-channel services appear very neglected by most brands Digital Experience Axis – Cross Channel Services in China, January 2017

Source: Contactlab analysis

Brand Ranking In Store Availability on Chinese Websites Collect in Store Return in Store Product exchange

Burberry 1 YES YES NO NO (vs YES in US, Korea, and Russia)

Loro Piana 1 NO NOYES

(Beijing, Shanghai )Online & In-store (Beijing, Shanghai)

Chow Tai Fook 3 NO YES NO OnlineBalenciaga 4 YES (Check via Email; Reserve) NO NO NOCartier 4 NO YES NO NO

Coach 4 NO NO NO Online & In-store

Brunello Cucinelli 7 NO NO NO Online (Size & Color)Givenchy 7 NO NO NO Online (size)Michael Kors 7 NO NO NO OnlineShanghai Tang 7 NO NO NO Online (Size & Color)

Bulgari 11 NOno China ecommerce

YES on temporary sale on WeChat

no China ecommerce no China ecommerce

Armani 12 NO NO NO NOChanel 12 NO NO NO NODior 12 NO NO NO NODolce & Gabbana 12 NO NO NO NOFerragamo 12 NO NO NO NOHugo Boss 12 NO NO NO NOMoncler 12 NO NO NO NORay-Ban 12 NO NO NO NOTod's 12 NO NO NO NOTory Burch 12 NO NO Not specified NOValentino 12 NO NO NO NOBottega Veneta 12 NO no China ecommerce no China ecommerce no China ecommerce

Céline 12 NO no China ecommerce no China ecommerce no China ecommerce

Fendi 12 NO no China ecommerce no China ecommerce no China ecommerceGucci 12 NO no China ecommerce no China ecommerce no China ecommerceHermès 12 NO no China ecommerce no China ecommerce no China ecommerceLouis Vuitton 12 NO no China ecommerce no China ecommerce no China ecommercePrada 12 NO no China ecommerce no China ecommerce no China ecommerceSaint Laurent 12 NO no China ecommerce no China ecommerce no China ecommerceSwatch 12 NO no China ecommerce no China ecommerce no China ecommerceTiffany 12 NO no China ecommerce no China ecommerce no China ecommerceZegna 12 NO no China ecommerce no China ecommerce no China ecommerce

Ralph Lauren 12No product page on Chinese

Websiteno China ecommerce no China ecommerce no China ecommerce

Broadly offered Broadly offered Offered Offered online & in-store, or only in-store

Offered in selected stores onlyOffered in selected

stores onlyOffered only online

Not offered Not offered Not offered Not offered

CROSS CHANNEL SERVICES IN CHINA

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 78

Figure 120: Bulgari offering Collect In Store on temporary WeChat sales

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 79

Figure 121: Loro Piana offering Return/Exchange In-Store service in six boutiques in Beijing and Shanghai

Source: Contactlab analysis

Figure 122: Coach offering Online and In-Store Product Exchange service in China

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 80

Figure 123: Balenciaga, Burberry, Gucci and Valentino best positioned. Responsive layout used only by eight brands. Some major brands prefer not to highlight western socials on Emails Digital Experience Axis – Email Proficiency for Chinese Customers (China, January 2017)

Source: Contactlab analysis

Figure 124: Brunello Cucinelli mobile Adaptive layout for Emails

Source: Contactlab analysis

Brand Ranking Mobile Responsive Video or Gif Male / Female Segmentation Navigation Bar Link between Product on Email

and Web Landing Page Bookmarks on Emails

Balenciaga 1 Responsive Never / Sporadic Frequent YES Category Page Weibo and YoukuBurberry 1 Responsive Never / Sporadic Frequent Never Mix Product Category WeChat with QR code; Weibo; YoukuGucci 1 Not responsive Frequent Frequent YES Mix Product Category Weibo, YoukuValentino 1 Not responsive Frequent Frequent YES Mix Product Category Instagram, Facebook, Twitter, Youtube, Snapchat, Pinterest, WeChat, Weibo, YoukuArmani 5 Responsive Sometimes Sometimes Never Mix Product Category WeChat with QR code; Weibo; YoukuDior 5 Responsive Sometimes Sometimes Never Mix Product Category Weibo Louis Vuitton 5 Adaptive Sometimes Frequent YES Category Page WeChat, Weibo, Pinterest, LV Pass, Instagram, YoukuChanel 8 Adaptive Frequent Sometimes Never Mix Product Category WeChat with QR code, WeiboMoncler 8 Not responsive Never / Sporadic Frequent YES Mix Product Category Instagram; Weibo; YoukuRay-Ban 8 Responsive Never / Sporadic Never YES Mix Product Category WeChat; Weibo; NiceTod's 8 Not responsive Sometimes Frequent YES Mix Product Category Facebook, Instagram, Youtube, Pinterest, G+Bulgari 12 Responsive Frequent Never Never Mix Product Category Facebook, Twitter, Instagram, YoutubeCartier 13 Responsive Never / Sporadic Never Never Mix Product Category Youku; Weibo; WeChat with QR codeHugo Boss 14 Not responsive Sometimes Never YES Mix Product Category Weibo, Youku, WeChat with QR codeMichael Kors 14 Adaptive Sometimes Never YES Category Page Weibo;WeChat; YoukuSwatch 14 Responsive Never / Sporadic Never Never Mix Product Category Facebook, Twitter, Youtube, Pinterest, Instagram, G+Zegna 17 Adaptive Sometimes Never Never Mix Product Category Facebook, Twitter, InstagramFendi 18 Not responsive Sometimes Never YES Category Page WeChat with QR code, Weibo, Youku, InstagramPrada 18 Adaptive Sometimes Never Never Category Page Weibo, WeChatSaint Laurent 18 Not responsive Never / Sporadic Never Sometimes Mix Product Category Weibo, WeChatShanghai Tang 18 Not responsive Never / Sporadic Never YES Mix Product Category Facebook, Twitter, Pinterest, Instagram, YoutubeBottega Veneta 22 Not responsive Sometimes Never Never Mix Product Category Facebook, Twitter, Tumblr, InstagramDolce & Gabbana 22 Not responsive Sometimes Never Never Mix Product Category Facebook, Twitter, Intagram, Pinterest, G+Tiffany 22 Not responsive Never / Sporadic Never Never Mix Product Category Weibo, YoukuBrunello Cucinelli 25 Adaptive Never / Sporadic Never Never No product emails WeChat with QR code Coach 25 Not responsive Sometimes Never YES Home Page Facebook, Youtube, InstagramGivenchy 27 Not responsive Never / Sporadic Never Never Home Page Facebook, Instagram, Youtube, TwitterHermès 28 Not responsive Never / Sporadic Never Never Home Page NOCéline 28 n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) Ferragamo 28 No Email Received No Email Received No Email Received No Email Received No Email Received No Email ReceivedLoro Piana 28 n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) Ralph Lauren 28 No Email Received No Email Received No Email Received No Email Received No Email Received No Email ReceivedTory Burch 28 n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) n.a (welcome email only) Chow Tai Fook 28 No email option for Mainland China No email option for Mainland China No email option for Mainland China No email option for Mainland China No email option for Mainland China No email option for Mainland China

Responsive Frequent (above 20% of emails) Frequent (above 35% of emails) YES (Always / Frequent above 80%)Landing on Web specific Product Page or Mixed Product-Category

PageChinese bookmarks

AdaptiveSometimes (between 5% and 20%

of emails)Sometimes (below 35% of emails) Sometimes (below 80%) Landing on Category Page only western bookmarks

Not responsiveNever / Sporadic (below 5% of

emails)Never Never Landing on Home Page No bookmarks

E-MAIL PROFICIENCY FOR CHINESE CUSTOMERS

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 81

Figure 125: Bulgari mobile Responsive layout for Emails

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 82

Figure 126: Burberry mobile Responsive layout for Emails

Source: Contactlab analysis

Figure 127: Tod’s example for differentiated emails by gender

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 83

Figure 128: Some major brands prefer to highlight only Chinese socials on Emails

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 84

Figure 129: Brunello Cucinelli offering the most options for Share. Weibo widely adopted, while WeChat only by five brands Digital Experience Axis – Share on China Websites (China, January 2017)

Source: Contactlab analysis

Figure 130: Brunello Cucinelli offering the most options for Share (although no WeChat)

Source: Contactlab analysis

Brand Ranking WeiboWeChat

(Moments and Send to friend)

Facebook(currently blocked

in China)

Twitter(currently

blocked in China)Pinterest Forward

E-mail

Brunello Cucinelli 1 YES NO YES YES YES YESBurberry 2 YES YES NO NO NO NOCoach 2 YES YES NO NO NO NOGucci 2 YES YES NO NO NO NOHugo Boss 2 YES YES NO NO NO NOMichael Kors 2 YES YES NO NO NO NOLoro Piana 7 YES NO YES NO NO YESCéline 8 YES NO NO NO NO YESChanel 8 YES NO NO NO NO YESLouis Vuitton 8 YES NO NO NO NO YESSaint Laurent 8 YES NO NO NO NO YESArmani 12 YES NO NO NO NO NOBalenciaga 12 YES NO NO NO NO NOBottega Veneta 12 YES NO NO NO NO NOCartier 12 YES NO NO NO NO NODolce & Gabbana 12 NO NO YES YES YES NOFendi 12 YES NO NO NO NO NOFerragamo 12 YES NO NO NO NO NOHermès 12 YES NO NO NO NO NOPrada 12 NO NO YES YES YES NOSwatch 12 YES NO NO NO NO NOTory Burch 12 NO NO YES YES YES NOValentino 12 YES NO NO NO NO NOShanghai Tang 12 YES NO NO NO NO NOBulgari 25 NO NO YES NO YES NOMoncler 26 NO NO NO NO NO YESTiffany 26 NO NO NO NO NO YESDior 28 NO NO NO NO NO NOGivenchy 28 NO NO NO NO NO NORalph Lauren 28 NO NO NO NO NO NORay-Ban 28 NO NO NO NO NO NOTod's 28 NO NO NO NO NO NOZegna 28 NO NO NO NO NO NOChow Tai Fook 28 NO NO NO NO NO NO

Yes Yes Yes Yes Yes Yes

No No No No No No

n.a.

SHARE ON CHINA WEBSITES

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 85

Figure 131: Gucci product share on WeChat and Weibo

Source: Contactlab analysis

Figure 132: Apps for Chinese Customers: Half panel offering apps in Chinese, 10 players not offering any app Digital Customer Experience Proficiency – Apps for Chinese Customers (China, January 2017)

Source: Contactlab analysis

Brand Ranking iOS Apps Android Apps Apps signalled on websiteCartier 1 CN (Cartier Catalog / Cartier Fine Watchmaking / Cartier Bridal) CN (Cartier Catalog / Cartier Fine Watchmaking) YESLouis Vuitton 1 CN (Louis vuitton Pass / Louis Vuitton City Guide / 100 Legendary Trunks) CN (Louis Vuitton Pass) YESSwatch 1 CN (Swatch AR'T / Swatch & Art / The Swatch App) CN (Swatch AR'T/The Swatch App) YESTiffany 1 CN (Tiffany & Co. Enagement Ring Finder) CN (Tiffany Enagement Ring Finder) YESGucci 5 CN (Gucci) EN YESValentino 5 CN (Valentino / Maison Valentino) EN YESChanel 7 CN (Chanel Fashion) CN (Chanel Fashion) NODior 7 CN (DIORMAG / DiorTV) CN (DIOR MAG) NOGivenchy 7 CN (Givenchy Men & Women) NO YESHermès 7 CN (Hermès Silk Knots) CN (Hermès Silk Knots) NOChow Tai Fook 7 CN(CTF Membership/T Mark/CTF Game) CN(CTF Membership/T Mark) NOPrada 12 EN EN YESTory Burch 12 EN EN YESArmani 14 CN (Emporio Armani Connected) EN NOBulgari 14 CN (Bvlgari Vault) EN NOFendi 14 CN (myBaguette) EN NOMichael Kors 14 CN (Michael Kors Access) EN NORay-Ban 14 EN NO YESBalenciaga 19 EN EN NOHugo Boss 19 EN EN NOMoncler 19 EN EN NOSaint Laurent 19 EN EN NOCoach 23 EN NO NOLoro Piana 23 EN NO NOBottega Veneta 25 NO NO n.a.Brunello Cucinelli 25 NO NO n.a.Burberry 25 NO NO n.a.Céline 25 NO NO n.a.Dolce & Gabbana 25 NO NO n.a.Ferragamo 25 NO NO n.a.Ralph Lauren 25 NO NO n.a.Tod's 25 NO NO n.a.Zegna 25 NO NO n.a.Shanghai Tang 25 NO NO n.a.

Offered in Chinese Offered in Chinese Signalled on Chinese/Intl. website

Offered in English Offered in English

Not offered Not offered Not signalled on website

n.a.

APPS FOR CHINESE CUSTOMERS

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 86

Figure 133: Example Swatch AR’T app signalled on China website (iOS and Android)

Source: Contactlab analysis

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 87

About the collaboration with Contactlab Exane has worked in collaboration with Contactlab on this report and the sections provided by Contactlab are clearly highlighted. The contributors from Contactlab are Marco Pozzi, Francesca Borgonovo, Xian Zhang and Kuiling Song. Contributors from Contactlab are not Research analysts and are not FCA or AMF registered. They have only shared their expertise on clearly delineated sections of the report and did not have access to the full report or its conclusions prior to publication.

Contactlab presentation Contactlab provides the leading engagement marketing platform for commerce-focused companies and fashion & luxury brands to develop successfully digital communication programs that enable personalized marketing to unlock demand and build lasting customer preferences. Founded in 1998, Contactlab is led by its founder Massimo Fubini, an internet industry veteran and opinion leader in the marketing field since 1995. Thanks to our own enabling PaaS technology and to the experience of our navigated professionals, we enable brands to achieve a deeper understanding of customers, to deliver uniquely relevant messages at every touchpoint of the customer journey and to measure performances with real-time dashboards that display all the relevant data. Our enterprise-grade platform is built with the highest security level, reliability, management, scalability. Our solutions enable brands to gain insights into the context of each customer and deepen the retail experience by delivering highly individualized digital contact plans across channels based on events, preferences and product lifecycle. Today, we work with more than 1000 clients in different industries across the world and serve most of the world-class brands in the Luxury and Fashion sectors

Disclosures All stock-specific commentary and recommendations in this report are solely based on Exane Research.

Contactlab Contactlab does not make investment recommendations, in this report or otherwise, and nothing in this report should be interpreted as an opinion by Contactlab either on market forecasts or on the prospects of specific companies. This report and all of its content are strictly confidential. It may not be circulated or otherwise reproduced in whole or in part. The analyses set out in the Report are the result of the aggregation of public materials and data coming from a sample of industry players. Use of this report by any person for whatever purpose should not, and does not, absolve such third party from using due diligence and care in verifying the report’s contents. Any use which a person makes of this document, or any reliance on it, or decisions to be made based on it, are the responsibility of such person. Contactlab, its affiliates and representatives accept no duty of care or liability of any kind whatsoever to any person, and no responsibility for damages, if any, suffered by any person as the result of decision made, or not made, or actions taken, or not taken, based on this document..

Exane BNP Paribas Research & Contactlab Luxury Goods 21 FEBRUARY 2017 page 88

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