Forecasts about the circa 200 million Chinese outbound visits look to be on target. Yet while big China numbers are an accurate reflection of spending power, Chinese travellers don’t simply ‘arrive and spend’ in any destination, mall or shop that they come across on their travels.
Are your travel retail venues doing all they can in terms of online seduction and offline temptation? Are you doing enough to omni-woo customers that, in China, have countless international brands offering them creative and culturally-relevant collaborations, VR games and AR gizmos?
Modern-day Chinese consumers
It’s important for the entire business overseas to have perspective on modern-day Chinese consumers. From the SVPs to the store assistants, all need to understand that the modern-day mindset of Chinese consumers is at a place of great national pride, awareness in their own spending power and knowledge of their worth as a customer.
We’re in a time when Chinese see their country leading global expansion and leadership.
- The ‘Belt and Road’ Initiative is a trans-continental project that links China with south east Asia, south Asia, Central Asia, Russia and Europe by land, as well as a 21st century Maritime Silk Road, a sea route connecting China’s coastal regions with south east and south Asia, the South Pacific, the Middle East and Eastern Africa, all the way to Europe. It is built by over US$1 trillion in investment, mainly infrastructure development for railways, ports and airports, alongside new power plants and telecommunications networks.
- The ‘Made in China 2025’ is a ten year plan (started in 2015) that is set to upgrade China’s manufacturing base by rapidly developing ten high-tech industries, such as electric cars, advanced robotics and artificial intelligence and, next-gen IT, as well as aerospace engineering and emerging bio-medicine.
- Chinese companies are growing in their overseas stakeholding. Alibaba’s overseas investments increased from just $520 million in 2013 to more than $6 billion in 2017. Tencent’s overseas investments increased from $260 million in 2013 to over $6 billion in 2017.
These macro-level moves trickle down to consumer mindset – modern generations of Chinese have grown up knowing only wealth increase and consumption power. They are aware of their importance to the world economy and rising national pride is a factor that overseas businesses must take into account.
A digital revolution in a decade
It’s worth considering the numbers – not just for number’s sake but about what this means: a population that keenly uptakes digital use. China is truly cashless and 100% of daily payments in urban life are made on mobile, via WeChat or Alipay. A source or stat isn’t even needed for that one; the source could be ‘anyone who lives in a Chinese city’ – it’s just a fact of life nowadays.
- Mobile payments rose from 25% of mobile internet users in 2013 to 68% in 2016.
- A decade ago China produced less than one percent of the global e-commerce market; today it’s 42%
- Transactions made via mobile payment platforms was 60.53 billion in 2018, up from 1.67 billion in 2013
The omni-channel experience is a reality in China, thanks to the capability of pioneering mobile tech.
WeChat isn’t only about mobile payments. Chinese consumers are well used to WeChat-based everything. Entire provinces are already connecting personal ID with WeChat, with people’s driving licences and such being held digitally.
For the businesses’ side, WeChat is the internet. A brand’s WeChat mini-program is its website, CRM, booking system, loyalty program app and more. So when brands talk about connectivity in their overseas destinations and speaking to Chinese customers, they need to realise that Chinese guests already experience an absolute seamless connectivity in their daily shopping experience at home.
- From LuxePulse Beauty: AR in China is not a mere gimmick but a tool that consumers love to use on their mobiles. Shiseido designed an AR makeup room in its WeChat mini program. In this makeup room, customers could choose to take a selfie, upload a picture or use an artificial model to test on different products. Moreover, users not only enable to try on various makeup styles from Shiseido influencers, but also can control the density based on personal preference. This program also allow users to test new products, involving eye liners, eye shadows, lip sticks, and more.
- It’s the same for virtual reality; as the rest of the world wonders if they should or could use VR in their marketing, luxury brands in China are employing VR to allow consumers to interact with campaigns and essentially ‘play’ in the WeChat mini program. In a Gucci mini-program, users can wear a virtual mask on their uploaded selfie – ideal for prompting sharing on their social media, as well as building a personal connection with the brand.
- Chinese consumers love games, and so gamification naturally plays well. During this past Chinese Qixi Festival, YSL upgraded its mini program by including a Purple Paris Game. Once players finished the game, they would be directed to a pop-up online store in which Qixi limited products are displayed. YSL also launched a series of YSL memes, which could be saved or reposted to any users.
- Smart malls are a reality. From LuxePulse Fashion: Tmall has created a new area for promoting brand experiences at K11 Art Mall in Shanghai. Alibaba Group’s B2C online marketplace partnered with brands to feature pop-up activations from diverse brands. The experience starts online when Tmall sends invitations to the brand’s premium customers. By leveraging consumer data, the brands gain insight into who will participate, which allows them to better engage those consumers offline – and even after the event ends.
- Wanda Commercial Management Group, the country’s largest owner and operator of shopping centres, has teamed up with tech giant Tencent to develop China’s first smart shopping mall. The mall has facial recognition payment and a VR gaming zone. With the power of Tencent’s proprietary technology, it’s ‘retailtainment’ made real.
From LuxePulse Beauty: Beauty e-commerce in China is highly diversified in terms of both the platforms available for brands and the variety of sales, campaigns and promotions done. Just a few examples alone are those such as Chanel Beauty, following the footsteps of Givenchy, Tom Ford and many others, joining Tmall’s Luxury Pavilion this year. Before that, Chinese customers have been able to purchase Chanel online only via its official website – some brands still opt for their own website experience, such as Shiseido, which updated its official Chinese website in August. To celebrate the revamp, the brand invited customers to purchase via the new site and earn double the loyalty points and receive three samples. WeChat Mini Programs make the super-app another opportunity: last quarter, IPSA’s two Qixi-related posts aimed to increase engagement via an ‘IPSA Mind Reading Test’ on its WeChat Mini-Program to find out readers’ potential favourite lipstick colour for dates. Their Mini-Program-based skin test came with a free sample for the cost of shipping.
Retail gamesmanship
The digital capabilities translate seamlessly to retail, with savvy brands from Diptyque to Mac Cosmetics to Armani Beauty (featured image above) offering an interactive experience and retailtainment at physical venues.
We spoke to Tracy Zhang, Director at Reuter Communications, about what’s now possible. “The opportunities are incredible, taking advantage of the digital pioneering technologies on China’s unique social media landscape, coupled with Gen Z and Millennials’ drive to always experience new concepts from brands. Brands should look to blend cultural moments and special Chinese seasons alongside the limitless functionalities available on platforms such as WeChat, Douyin and RED (Xiaohongshu).”
“It’s important to note that Chinese consumers now expect true omni-channel experiences. Online, digital commerce is not enough and smart e-commerce leaders now couple this with offline experience centers. Secoo have been doing this for years and other players are too. Alibaba’s B2C online marketplace Tmall launched an offline pop up store in Shanghai’s K11 shopping mall at the end of July, which featured exclusive activations, such as Vans urban art exhibition and Make Up For Ever workshops. Brands including Bobbi Brown, Make Up For Ever and many more in the offline experience.”
Key takeaways
- Imagine they have these technological capabilities in China – and then you make them pay with ‘cash or card’. Not only would the entire experience be lost – but you’d be losing out on what happens when the customer pays on WeChat: linking into your social CRM. Let your Chinese customers worldwide share with their contacts – incentivise WeChat-based loyalty programs, let them send WeChat vouchers for your online store to their friends and much more. Download Reuter: Intelligence’s latest Insight Report to read more on what’s possible.
- Every brand at home – and a growing number overseas – are tailoring the entire experience to Chinese tastes. It’s not simply about ‘using Chinese influencers’ but going to the next level required of trust and authenticity. Read more here about who the next Chinese influencers are.
- Are you in tune with Chinese festivals and celebrations? If celebrating and well-wishing, focus on the festival itself and the moment – not the commercial opportunity. Chinese consumers are quick to spot fawning in place of felicitations and you don’t want to be accused of milking the opportunity instead of simply being involved in the moment. Commerciality, however, is warmly welcomed on other, less traditional times. Western Valentine’s Day, Chinese Valentine’s Day and the ‘Bonus Valentine’s Day’ of May the 20th (with 5-2-0 sounding like ‘I love you’ in Mandarin’) are rich with gifting deals and specials, with recipients of these limited edition treasures very keen to show off their gift on social media.
- Your Chinese digital accounts should be continually analysed for weak links, leaks and loss. Through your user’s digital journey, when do they get bored and leave your WeChat account? What campaigns, posts, images, wording, functionality keeps them within your digital ring-fence and what loses them? While there are indeed impressive shop-front capabilities of WeChat, it’s the ‘back end’ that allows real analysis of what works and what needs action. Ensure that you have the macro vision and nano understanding of your Chinese digital platforms and performance.
