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BlogOpinion

Introduction by: Peter Marshall

Ahead of TFAP, it is a great pleasure this week to feature an exclusive and  insightful blog contribution from Prof. Dr. Wolfgang Georg Arlt, CEO of COTRI (China Outbound Tourism Research Institute). He is a world-leading expert on China Tourism, with 45 years experience. For 20 years he has also been a Professor for International Tourism Management and is a Director of the Meaningful Tourism Center.

This is a very direct blog. Some of the content may be well known to you, other elements will offer new  and interesting perspectives. There are 3 separate segments – each one a must-read for all in Travel Retail.

On May 19th, which is Chinese National Tourism Day, Chinese Outbound Tourism Post COVID-19 is the key topic at the Guangzhou International Travel Fair (GITF). Registration is free of charge. Organised by COTRI, there are some excellent keynote speakers and panellists. Definitely worth taking a look!

UPDATE

  1.  The Chinese eagerly wait to get out of the country. As in all countries, Chinese outbound travellers are anticipating the time when borders open again. Expect a huge wave.
  2. Shopping is not so important as part of international travel anymore, sophisticated travellers achieve more bragging power by personal experiences and achievements, less and less by just spending lots of money for mainstream luxury brands.
  3. Turnover per customer will continue to decrease as daigous (resellers) and buying for colleagues and neighbours become less important. Daigou sales are more restricted by government regulations and smaller price differences. Colleagues and neighbours are more likely to travel and shop themselves.
  4. Chinese brands are no longer frowned upon, guochun (buy Made in China) is a patriotic act. In many fields Chinese brands have developed into serious competitors.
  5. Hainan as an alternative has become important partly because of lack of alternatives during the pandemic. After the restart of outbound travel, buying abroad will become more trendy again – if the purchasing experience is staged according to the needs of Chinese customers.
  6. Package tour groups, forced shopping and tour guides deciding on the shops visited will lose importance. FIT and customised tours will increase, with the tour guide no longer holding the travellers hostage.

    PREPARATION

  7. Now is the time to learn about the changing needs and expectations of the different segments of the Chinese source market. Prepare for the coming wave of Chinese outbound travellers and communicate your preparation with a certificate of participation in a training or special offers for customers paying with WeChatPay and AliPay.
  8. Buying online or in Hainan or buying while travelling? The quality of the purchase experience, the staging of the process will make the difference for the decision. Add, if possible, regional products not available online or in China to your portfolio in your shops.
  9. Younger Chinese want to be treated as knowledgeable global citizens, interested in lifestyle brands, contemporary local culture and regional and “green” products. Senior (50+) Chinese want to be pampered and have their VIP status respected and enacted.
  10. All Chinese customers want to see signs of respect to the Chinese culture in the decoration and in the use of the Chinese language (even if the customers speak English).
  11. Chinese customers do not want to be treated as good as everybody else – they want to be treated better than anybody else.  After all, they are Chinese.
  12. Acceptance of mobile payment systems and comfortable VAT refund processes are an absolute necessity. There will be little or no business and no recommendation without.

    MARKETING

  13. It is crucial to stay in touch with the Chinese market during the pandemic. The easiest way is by the sales of regionally specific and authentic goods via cross-border sales apps like the O+MALL App.
  14. KOLs (Key Opinion Leaders) are no longer trusted in China. Using KOLs is in almost all cases  a waste of money. If they are really influential, you will not be able to afford them (unless you are a big global brand). If you can afford them, they are probably not influential enough. For special interest topics, sourcing your own KOLs is the best – and cheapest – way.
  15. KOCs (Key Opinion Customers) and other forms of recommendation marketing gain in importance and need to be actively supported. Better to have a Chinese affluent lady life-streaming to her 800 direct contacts on Chinese social media, who are all also affluent travellers, about her wonderful experience in the shop right now than producing expensive videos which are watched by 5,000 students and expats.
  16. If social media marketing, then use agencies which offer multi-channel messages for precisely targeted audiences (e.g male car-owning lovers of red wine with European travel experience living in Eastern Chinese 2nd tier cities, with messages delivered while they are at home), broadcast into the correct channels selected out of the ever-changing myriad of social media channels in China.
  17. Understand why Chinese customers buy products to get the storytelling right. Most wine and liqueur is not bought for consumption but as a gift. Highlighting the prestige, tradition and authenticity coming with the bottle is more important than explaining the taste.
  18. Use lucky draws and online sales to get information and contact data from your Chinese customers and contact them occasionally with product information but also with China-related news (which Chinese celebrity shopped with you, that you have been voted the most China-friendly shop in your city) etc.
  19. Bonus insight No. 19: Make sure that all your staff members are regularly reminded that your Chinese customers are responsible for a good part of your ability to pay their wages and accordingly should be treated with respect and smiles whatever – whatever! – is the situation.

 

Peter Marshall

Founder: trunblocked.com/Marshall Arts

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