In this guest column, Hot Pot China CEO & Founder Jonathan Smith looks at how brands can make an impact on the dynamic Chinese market.
According to the China Outbound Tourism Research Institute (COTRI), overseas trips by the country’s residents will increase from 145 million in 2018 to more than 400 million by 2030, making it the largest outbound travel market.
Golden Week, which runs between 1 and 7 October in 2019, sees more Chinese people on the move than at any other time. Some six million people travel to 1,155 cities across 88 countries.
The opportunity for duty free operators and brands in that environment is clearly huge, but with a few exceptions, mainly elsewhere in Asia, their efforts to engage with Chinese consumers have been lacklustre.
Even worse, World Duty Free last year faced a backlash for a promotion asking Chinese travellers to spend more than other nationalities to qualify for a 20% discount on goods during a promotional event. It was a badly misjudged tactic and was blasted in the Chinese media.
PR disasters aside, duty free operators across the board are failing to understand how Chinese consumers like to shop. Ahead of this year’s Golden Week, there is still time to introduce the right kind of strategies to drive revenues from this lucrative audience.
Convenience is crucial
It is vital to understand that Chinese shoppers expect a frictionless buying experience that’s built around immediacy and convenience. China is one of the most sophisticated retail environments in the world where online and offline blend seamlessly; they expect a similarly efficient experience when they are shopping overseas.
They want to know what to buy before travelling and ideally to pay ahead of time. They are also savvy shoppers.
Jessica’s Secret, a powerful price comparison app which also covers duty free, is one example of a tool that is increasing in popularity with Chinese travellers as they plan their purchases.
To engage with Chinese shoppers well in advance of departure, duty free operators also need to familiarise themselves with how Chinese consumers plan and book their travel; what social media platforms they use; and how they prefer to pay for goods. Armed with this knowledge, operators can develop a clear roadmap of how to target Chinese consumers at key points in the travel planning process, getting front of mind, with the right kinds of marketing campaigns.
How Chinese travellers plan their trips
Chinese consumers use major specialist travel sites like Ctrip, Kuxun and Qunar to research and book their journeys. They go to car rental site Zuzuche and online destinations such as Qiongyou and Mafengwo, akin to TripAdvisor, to plan the finer details of their trip and to look at reviews.
There is an opportunity for duty free operators to run highly targeted advertising campaigns on these platforms. For example, partnering with Ctrip to serve content, ads or social messaging to anyone that has bought a ticket to a specific destination is a way of providing relevant information and so driving sales from people they know will be travelling through that airport before they’ve even arrived there.
There are also Chinese influencers living locally in many of the travel destinations on the China bucket list. Working with trusted influencers to develop highly targeted social media campaigns, offering access to exclusive products or gifts with purchase, is another great way to build familiarity and drive sales in advance.
Additionally, core platform WeChat is all encompassing when it comes to reaching Chinese consumers, with the ability to build transactional or campaign driven mini programmes directly within the WeChat environment. A simple example would be to allow a consumer to build and save their skincare profile or perfume preference, which when paired with a travel calendar would allow brands to use this data to target the consumer with relevant products at the relevant time.
Enabling transactions
When it comes to the actual retail transactions, you would expect operators to have websites that are fit for purpose, with a sophisticated ecommerce capability. Yet the majority of global duty free retailers don’t even have a reserve-and-collect facility – a basic minimum expected by Chinese travellers – and as a result, are losing guaranteed advance sales. Many also only have single language sites with no simplified Chinese, which deters many travellers from committing to a transaction and means retailers are missing out on sales right at the point of potential conversion.
An easy fix is to accept POS payment via Alipay or WeChat Pay. Chinese consumers say they are much more likely to buy from an overseas retailer if they offer these platforms. Harrods introduced WeChat pay for Chinese Lunar New Year in early 2018 (they had already introduced Alipay in 2016), and they used it as a powerful piece of PR to show how they were facilitating the shopping experience for Chinese visitors, making a play for a share of the 115,000 Chinese tourists visiting the UK each year.
Today, adopting either of the payment systems is straightforward and can be done via a gateway partner such as Stripe, with some simple hardware at the point of sale.
It might sound like a no brainer, but having Mandarin speakers on the ground in the duty free environment is also a great way to convert shoppers. Again, Harrods is ahead of the game, reportedly having recruited 200 Mandarin-speaking staff.
On the ground
Within the airport environment itself, duty free operators and brands need to make sure they adopt the right tone of voice and appropriate campaign imagery when targeting Chinese travellers. It’s important to steer clear of cultural clichés, which means a hastily cobbled together splash of red and a picture of a dragon for Chinese New Year; this is not just poor, but also so insensitive as to be highly offensive.
For examples of best practice, operators would do well to look at duty free in China. The big players there offer the seamless experience that Chinese consumers expect, building WeChat functionality into the purchase journey and in some instances, offering payment via facial recognition technology.
It’s clearly important not to alienate other travellers, but many of the tactics we’ve outlined are discreet and highly targeted, while others, such as offering a slick and tailored ecommerce experience will help drive revenues more broadly.
