Recent research showed that the Chinese make up one third of all global tax-free shopping spend, and the Chinese tourist’s average holiday spending budget is ¥16.702 (£1,900). These figures once again remind travel and tourism businesses that the Chinese constitute an extremely lucrative market for retail. And it’s also a market which is predicted to grow to 200 million by 2020.
In 2014 the total overseas spend by Chinese tourists was over ¥1 trillion (£100 billion). The key factors driving Chinese overseas purchases, which we looked at in Part 1 of this blog, are a history of fakes and poor quality goods, a limited range and much higher prices. This trend shows no signs of slowing. Here’s the 5 ways to make your how retail offering Chinese-friendly and attract this cash-splashing segment.
Make sure you’re big in Beijing (and Shanghai, and Chengdu, and Guangzhou …)
81% of all Chinese overseas tourists plan to shop in their destination and they’re researching their options before they travel, so it’s essential to promote your brand in China. There are various routes to attracting the interest of Chinese tourists before departure, and they’re best used in combination to maximise your impact. PR to key consumer and trade media is essential, and inviting bloggers to visit can garner good coverage too.
Key Opinion Leaders (KOLs) and celebrities are very influential in China and an endorsement, or ideally a visit, can place your offering into the social media streams of millions of Chinese. And choosing the right KOL is essential. While The Plough at Cadsden in Buckinghamshire can hardly find space for its Chinese visitors thanks to President Li Xinping and David Cameron’s beer and fish & chips pitstop last year, most brands are going to have to work a lot harder to raise their profile in China. The rise of internet celebrities such as Ling Ling, who by some accounts earns more than top Chinese actor Fan Bingbing, is just one aspect of a complex market for the unaware. There are even internet celebrity incubators. A specialist agency is vital to identify the KOL who will fit your brand and appeal to your target market; we knew Chinese rock band Miserable Faith were the right celebrities to promote our client Hard Rock Cafe – a simple lunch resulted in postings on Weibo which reached over 3 million.
So make sure you’ve done extensive research – or work with an expert agency – to find the right celebrity or KOL for your brand, use PR to consumer and trade media, and cultivate relevant Chinese bloggers.
Cash isn’t king
The Chinese don’t have access to Visa and Mastercard credit cards and have tended to pay in cash overseas – a natural spend inhibitor given concerns about the safety of carrying too much money in a foreign land. Hence the need for merchants to accept payment by China Union Pay, the bank card most widely used by the Chinese, is well-established. If you want to be included on a Chinese itinerary, you really ought to accept China Union Pay; Harrods has over 100 Union Pay terminals throughout the store.
The need to accept Union Pay is so well-established, in fact, that the world of Chinese payments is moving on. 99% of all Chinese online shoppers use mobile payment apps. In China these days even small retailers such as food stalls accept payment by mobile app. And Chinese outbound tourists increasingly wish to use the same payment methods overseas as they do at home.
The spread of Alibaba’s payments platform Alipay into Europe is designed to do just that; allow Chinese tourists to pay overseas using a familiar payment method. Alipay is increasingly available at European airports, luxury retailers and other places with high visitation by Chinese tourists. Intercontinental Hotels Group (IHG) recently signed a global partnership deal to accept payment by Alipay at all its hotels and through all digital and offline channels – not surprising when you realise that China is now IHG’s 2nd largest market globally. WeChat Pay is smaller than Alipay but still widely-trusted and used, and both payment channels are already spreading into Japan.
So make payment easy for the Chinese by accepting China Union Pay, and if you’re a big retail outlet, think about Alipay and WeChat Pay too. Making this change could give you a valuable return. The first US shopping complex to accept China Union Pay soon became the site of Union Pay’s single largest transaction ever. Which was a 6 figure sum.
Welcome the Chinese in Chinese
Making the Chinese feel welcome could bring great rewards. If your destination or tourist attraction is Chinese-friendly, it’s far more likely to feature in a group itinerary, make it into the Chinese media, or appear in an independent traveller’s plans. Communications and signage in Chinese and a dual language website – not just translated but localised so it makes cultural sense to the Chinese – will all contribute to raising brand awareness and making Chinese visitors feel welcome. And Mandarin onsite signage is vital for that all-important selfie.
Cultural training will help your onsite team welcome the Chinese and help them make the most of their visit. One of our services, GREAT China Welcome training, backed by Visit Britain, takes just one day and will equip your team to better serve the Chinese, even if becoming fluent in Mandarin takes just a little bit longer. Could you answer a question in Mandarin? If the answer is no, consider having a few key points about your most expensive items available to read in Mandarin. That could clinch a sale which would otherwise walk away to the next store.
Get yourself onto Chinese group itineraries
Legend has it that there was once a time when Chinese tour guides could be encouraged to visit particular places on receipt of a small monetary reward. No more. President Xi Jinping’s anti-corruption crackdown has reached into tourism and legitimate methods are required to get your offering onto Chinese group itineraries. And sadly this is not just a matter of meeting a few Chinese tour operators, liaising by email, agreeing rates et voilà, behold the arrival of many Chinese tour groups.
China’s time-honoured social hierarchy and cultural norms around trust impede speedy relationship-building. The Chinese favour long-term connections and these can’t be developed over just a couple of meetings. Expect to undertake repeated visits to meet your prospective partners or work with a local intermediary who can use their established connections to benefit your business. And don’t forget that ‘yes’ can mean ‘no’. British-Chinese cultural differences are multiple and challenging.
Tailor your brands to the Chinese
Chinese tourists are still eager to snap up luxury fashion in the form of clothes, handbags, sunglasses, watches and jewellery.
Bicester Village’s mix of designer and mid-market shops has proved a hit with the Chinese for whom it is reputedly the 2nd most visited destination in the UK after Buckingham Palace. A mix of high-end designer shops and mid-market brands is a great combination. And there’s a growing segment of Chinese visitors keen to seek out more quirky or original fashion too. New shopping app New Arrival is designed to bring independent overseas designers to the attention of Chinese fashionistas, highlighting shops in popular city destinations within and outside China as well as facilitating in-app purchases. Millennials in particular are making more self-focused decisions than older generations, opening up opportunities for the right smaller or niche brands.
Cosmetics and skincare, cheaper than in China and perfectly portable, are also a popular purchase for Chinese tourists in the UK. Gift purchases are common too, so consider offering bulk discounts and having traditional Chinese red gift envelopes available.
And make sure you offer heritage and quintessentially British and regional goods too. Tell the story of the brand and focus on its heritage, authenticity and quality to boost its appeal to Chinese tourists. For example, traditionally Scottish products such as tartan, whisky and cashmere are popular with Chinese tourists in Edinburgh. For authenticity’s sake, products should ideally be stamped Made in the UK – and certainly not Made in China.
Are you doing enough to attract Chinese shoppers?
So – are you doing enough to get your share of Chinese shoppers’ holiday spending? Are you promoting your offering in China; accepting China Union Pay; welcoming the Chinese in Mandarin; building relationships with the Chinese travel trade; and tailoring your retail offering to Chinese tourists? It might seem like a lot of work but it’s worth it; the Chinese are now in the top 10 inbound markets to the UK by value and their total visits to the UK were up +46% yr/yr to 2015.
To find out more about how you can make your retail outlet more attractive to the Chinese, contact us now for a no obligation chat.
For more news and views on the Chinese tourism scene, please read our other articles and sign up below to receive our newsletters.
Enjoyed this article? Then these may also be of interest to you.
Breaking into China. Where to start?
Is the rise of Chinese travel to the UK unstoppable?
Get Ready for Golden Week