INTERNATIONAL. It’s a tiny circle known for exclusivity, but its global reach into emerging markets means the luxury business needs online networking.
When you think of luxury, you think of small, elite, exclusive. When you think of the internet you think exactly the opposite, and marrying the two has historically enjoyed little success.
Yet a company called The Luxury Society evolved into a flourishing business by exploring where a mass media platform could successfully meld with a niche luxury network.
According to Pierre-Yves Poulain, co-founder with four others of the website that is designed to create global networking opportunities for the industry, luxury professionals gain access to screened information that targets their interests out of the thousands of items they would otherwise have to troll through in their search for business information and opportunities.
“We arrived on the market of social networking at a time when a lot of [executives] had started to use such networking sites,” Poulain says in an interview with INSEAD Knowledge. Our observation in 2007 was that these networks were great in a generalist way, but there was room for vertical networks. It makes more sense to be able to get connected with people from your ecosystem and environment, rather than being mixed with millions of users.”
The Luxury Society also advises its users on tailored international networking opportunities, enabling a company to extend its corporate awareness and engage one-to-one with future business partners.
“It might be Richemont, a small emerging brand, a niche brand - it might be a consultant or communication agency,” says Poulain. “We encourage user-generated content. The more you let us know what you do - because you want to spread your corporate message, you want to make sure that the entire industry is aware of what you do (a new product launch, a new store opening, or a new co-branding operation) - the more you give other members the ability to know that, the more you get in return [regarding] what’s happening in other sectors or companies.”
China ranks number six in terms of the largest population using The Luxury Society, and Poulain is convinced that it will move into the top three within the next two years. The top five are the United States, United Kingdom, France, Italy and Switzerland, unsurprising given that these are the countries where most of the top luxury brands were originally established.
Virtual networking is another way to do business, rather than simply shaking hands and clinking glasses in an upmarket venue. But Poulain says it is not a replacement for the “real-life experience” - it’s about combining the two.
“The luxury industry has quickly become global because brands exist in many countries and the network is just a mirror of what’s happening on the markets. If you are a brand based in the UK or in Italy and you have comfortable control of your market, you have to know the people working in the same industry or city.
“From the moment you start to develop your business internationally you need to extend your network capability. This is the start of the power of social networking, where a professional in Japan can start sharing information or knowledge with someone in Argentina or the United States. This is contextual conversation – in other words it’s another way to network instead of shaking hands and having a glass of champagne.”
This article is republished courtesy of INSEAD Knowledge
Copyright INSEAD 2011.