We are introducing a new alternative data indicator on Chinese organic search for luxury brands.

According to Bain & co, globally, the share of personal luxury goods purchased by Chinese nationals reached 32% in 2017.

With that in mind, given the relevance of the search indexes when analyzing FLG brands trends (we already wrote about this in a previous edition of this newsletter), and the particular situation in China where Google accounts for barely (or not even) 2% of searches, we are introducing a dedicated China-only analysis in our dashboard based on Baidu searches, in order to maintain our privileged position as reliable and independent observatory of the industry.

Why Baidu matters

Some key aspects for a better understanding of the benefits on analyzing Baidu instead of Google when it comes to FLG in China:

Baidu is a Chinese company, fully compliant with the local laws and censorship, while Google has had a few rough patches with the Chinese authorities over freedom of speech and free access to information. While Google continues it operations in China, its capacity is limited.

Even if Baidu banks on its comparatively better understanding of local Chinese language (Baidu’s search algorithms place a lot of relevance to the context in which the words are used in the content, while Google, appears to have struggled on these fronts in China), when analyzing FLG brands on Baidu the relevance of results gets better, since brand names are spelled in English. This creates an advantage when compared with Google, when brands have also real-world meanings and sometimes get confused (i.e. Diesel).

Here a link for further Baidu vs Google analysis.

Use case: Prada (1913:HKG) China sales growth in 2017
Two good months after 2017 ended, Prada disclosed their results. Noteworthy in this case is the performance in China, which registered a +8% year-over-year increase in sales. The search index registered a +11%.