China travel market update 20 November ‘20

China’s domestic travel market continues to make a strong post-pandemic recovery. China’s three largest carriers each launched 10 new domestic routes in October while China’s largest airline, China Southern, returned to profit in Quarter 3. Meanwhile key hotel markets including Sanya, Shenzhen, Chengdu and Xi’an have recently recorded occupancy levels of more than 70%.  And Alibaba’s online travel platform Fliggy reported more than double last year’s sales of domestic hotel nights during China’s annual online shopping bonanza Singles Day.

Intra-China passenger flights stood at 98% last year’s volumes in September in the build-up to Golden Week, the first in the time of Covid-19. And while countries across Europe were entering second lockdowns in early October, photos of busy tourist spots and transport hubs showed the Middle Kingdom rediscovering its wanderlust. The chairman and co-founder of online travel mega-agency Trip.com, Liang Jianzhang, forecast that China’s domestic tourism market would be fully recovered by the end of 2020.

China-Southeast Asia travel bubbles opening

At least 500 million Chinese went on holiday during Golden Week. In fact China’s Ministry of Culture and Tourism puts the number of travellers as high as 637 million. And Chinese online travel agency Qunar.com reported an increase of around +20% in the average hotel booking price compared to last year.

Attesting to China’s regained consumer confidence, a USD500 million Legoland theme park is planned for Shanghai. The first Chinese holidaymakers in 7 months arrived in Thailand in October, and a Hong Kong-Singapore travel bubble is due for launch on 22 November.

A return to explosive shopping?

The Pfizer/BioNTech announcement that their Covid-19 vaccination candidate proved 90% effective in global trials has received widespread coverage in China. This follows positive news for the nation’s own candidate vaccines. And with Covid-19 largely under control at home, the return of one coronavirus positive tourist from Mongolia in recent days has been headline news.

Chinese tourists are not just returning to travelling – they’re spending too. The Middle Kingdom’s – and perhaps the world’s – biggest annual shopping day, Singles Day, on 11 November broke all spending records. China’s online retail giant Alibaba reported record sales of 583,000 purchases every second with 1.9 billion sales in total.

Although the Chinese economy took a significant dip during the heights of the pandemic in Quarter 1, it picked up speed in Quarters 2 and 3. Quarter 3 saw growth of +4.9% year/year, and retail sales grew by +3.3% in September. China is the first major economy to resume growth at pre-pandemic levels and is expected to be the only G20 economy to grow this year.

How to do business in China: the importance of guanxi

If you’ve ever made a business trip to China, you’ll have heard about guanxi. If you’re new to China and considering doing business there, you need to know about guanxi. So what is this key element of building relationships with Chinese business partners? What is the importance of guanxi?

Who you know is more important than what you know

It isn’t easy to directly translate guanxi into English but its approximate meaning is ‘social connections’ or ‘personal relationships’. Essentially it refers to the interpersonal networks of people we each build to help us succeed in our careers. And guanxi is key to being successful in business in China.

For much of Chinese history, guanxi has been the glue that has held society together. Traditional Chinese society was mostly rural and built around family and social connections, which are also emphasised in Confucianism. Essentially, it’s natural to do business with people you know. We might even characterise guanxi as ‘Who you know is more important than what you know’.

So how should you approach doing business in China, taking guanxi into account?  And can you create your own guanxi?

Creating your own guanxi

Is it possible for a non-Chinese person to create their own guanxi? Tony Evans did. Tony is Co-Founder of Bristol International College and Experio Life Ltd, a consultancy business specialising in educational travel for the youth market. With more than 30 years’ experience in education and a continent-spanning career, Tony is used to cross-border working and international collaboration. So he wasn’t phased by getting involved with the Chinese market. We spoke to Tony to hear more about his experiences.

In 2015 Tony identified untapped Chinese demand for international education. Working with a Chinese business partner in the UK, Tony selected and appointed a bilingual in-country representative. The local rep identified suitable schools and agents, arranged local introductions, and planned itineraries and every aspect of travel. Tony visited China two or three times every year, spending about 30 days annually travelling vast distances and holding many meetings in China to build relationships and establish that all-important guanxi.

The result? In 2019, 50% of Tony’s summer school students were from China – an increase from just 10% in 2016.

How to do business in China

So it is possible to create your own connections, or guanxi. But it’s a lot of work and commitment, and you need inside help.

  1. Have a trusted local partner

Work with a local partner to identify the right people to meet. The right person in China knows your market and industry, and will have the necessary connections to match you with promising business contacts.

  • Get introductions

Make sure you’re not approaching potential business partners ‘cold’. A written introduction from a trusted Chinese contact is the minimum; an inperson introduction is better.

  • Work with a local translator who is not just bilingual but bicultural

Use a translator who understands your industry jargon and can interpret cultural differences for you. Understanding cultural and linguistic nuance is vital to achieving results.

Many cross-cultural challenges in business

And tackling guanxi is just one cross-cultural challenge among many. Don’t forget:

  • Seniority is important. It’s vital that senior associates make contacts and nurture relationships. Don’t ever send someone who the Chinese might perceive as junior to a meeting
  • The Chinese don’t like to say no. Apparent agreement is often not what it seems
  • Meeting etiquette is important. What Westerners perceive as ‘small talk’ is crucial relationship-building

We can help you establish great working relationships with business partners in China. We are experts in promoting tourism brands in the Chinese market and have long-term relationships with the important Chinese media, Key Opinion Leaders (influencers) and travel trade. The travel specialists in our Beijing office have existing guanxi with many of your potential business partners – and can visit them in person to promote your product ready for when China’s 100 million plus outbound tourists start booking overseas travel again.

Contact us now for a no obligation chat about the possibilities of the Chinese outbound travel market and how we can help guanxi work for you.

Travelling to be seen: the rise of daka tourism in China

When the Chinese first began to travel overseas, the cliché was that they loved to take short trips covering as many destinations and countries as possible. And while this contained some truth in the early days, Chinese travel patterns have evolved towards longer, more in-depth holidays. Getting under the skin of a destination and enjoying authentic local experiences has fast moved to the top of the Chinese tourist’s wishlist.

Yet there are as many different travel styles as there are Chinese tourists – millions – and the latest millennial trend is daka tourism. Daka tourism – essentially to be seen to have been somewhere, or preferably many places – is enjoying its time in the sun as the latest trend driving domestic travel in China.

In the Middle Kingdom, there is kudos to be seen to have visited significant and fashionable places, especially temporary ones. And how best to show you have visited somewhere? Through sharing digital video evidence on Douyin. Douyin is the original, censored version of Tik Tok with 230 million monthly users. Where Tik Tok rules for short video content in the USA and Europe, its censored parent Douyin rules in China. At the heart of Chinese digital trends, it’s through Douyin that daka culture has really taken off.

“Punching in”

The term daka originally refers to “punching in”, the act of using a card to punch in and out of work. In its latest form daka tells of marking one’s visit to a hot destination by posting on social media.

“Make every second count” is Douyin’s slogan, and this is reflected in the proliferation of short destination videos in the app.

Unexpected consequences of daka include the recent surge in travellers to Zhanjiang, an otherwise unremarkable city in Guangdong province. Location of the hit tv show Bad Kids, Zhanjiang is experiencing an unexpected boom in visitors to locations featured in the drama, including a swimming pool which has achieved the dizzying heights of 2,000 visitors daily. And in the city of Chongqing, the mock-traditional style of architecture of a stilt-house complex in Honyadong became the second-most popular attraction in China after the Forbidden City thanks to a surge in Douyin coverage.

Selfies in space

Daka culture has its roots, of course, in selfies. Selfies have gradually infiltrated our most important moments over the last few years, making experiences more real and memorable by the act of digitally memorialising them. We usually think of selfies as a recent digital trend, but their history actually goes back centuries. The Library of Congress in the USA holds a picture Robert Cornelius took of himself in 1839, believed to be the world’s first photographic selfie. Second man on the moon, Buzz Aldrin, took the first space selfie in 1966, and what are Rembrandt’s self-portraits than a selfie by slower means? The 1990s saw selfies take grip in Japan as part of kawaii [cute] culture. In 2001 Instagram introduced auto filters for beautifying faces. And so in 2020 we arrive at daka culture.

Ephemeral beauty

Daka culture is related to, but not the same as, the search for Instagrammable backgrounds. While London’s Sketch hopes to use its soft pink benches to attract Instagrammers for years to come, a daka-friendly venue is more likely to be a pop-up, temporary in its location and especially on-trend in its looks.

Pre-pandemic China saw daku zu – daka tribes – touring cities to “punch as many destination cards as possible”. Travel agents started offering daka tours, and social media-friendly installations are even taking off in the art world. Savvy destinations and attractions ‘build in’ striking views and backgrounds to their offering, and plan PR-worthy temporary installations. Tourism brands work with Key Opinion Leaders and influencers on Douyin to encourage them to visit to put them on the daka map.

It will be fascinating to see how long daka tourism endures – especially if it turns out to be as fleeting as the visits it inspires.