In a recent InternetRetailing webinar, Retail Lessons from China, we heard from Myles Dawson, UK managing director of payments provider Adyen, and Domenica di Lieto, chief executive of Chinese marketing consultancy Emerging Communications, with advice and insights for retailers looking at how best to engage with Chinese shoppers, both tourists and students, who are currently visiting the UK market in greater numbers.
Here’s a bullet-point summary of the event.
UK China consumer market
Myles Dawson, of Adyen, opened the webinar with an overview of the UK China consumer market
- Factors driving the growing opportunity from Chinese visitors include: the Chinese trade war with the US, UK endorsement of China’s belt and road strategy. Brexit upside: potential for China’s first trade agreement with a western economy.
- “The Chinese have always held a long appreciation for British culture” TV shows Downton Abbey and Sherlock are both hits there.
- Both heritage and new, dynamic brands now attracting attention from Chinese opinion formers.
- Fall in sterling: tax free services mean shopping in the UK continuing to get cheaper.
- Opportunity that could help offset the pain of UK high street closures
Who is visiting from China?
- An average spending budget of £5,309 and spending of £1bn from UK Chinese tourists expected this year.
- 11% rise in wealthy students coming to the UK over the last year, with 83% of Chinese millionaires looking to send children to study in the future
- Students stay for between two and four years, and may take first roles in UK companies.
- Tend to spend an average of £28,236 a year: 115% more than British students. This could be still higher.
- Students have an average of three visits from family and friends each year.
- Expats earn an average of £100,000 a year, with 67% more Chinese millionaires (with liquid assets of at least £2m) gaining tier one residency visas between Q4 2018 and Q1 2019.
And how do they pay?
- Main methods are WeChat Pay (800m users), AliPay (1bn+), Union Pay (7.5bn) : how they work and what they do
- The importance of supporting all three payment methods. Dawson: “Many Chinese consumers use all three, switching between them depending on the current financial situation, the price of goods, card incentives and promotions. Our suggestion is always to offer all three.”
Adyen, Global Blue and Emerging Communications toured China, and have since launched a report and are running a number of workshops.
Targeting Chinese consumers in the UK
Domenica di Lieto of Emerging Communications then looked at how Chinese consumers buy, and what that means for UK retailers.
- Longer purchasing journey: takes twice as long, with research that takes twice as long as in the UK.
- Chinese tourism peak periods: good time to target Chinese tourists – but, it’s “extremely popular and very, very noisy out there”. Other times visitors come to the UK include graduation season, weddings in June. Valentine’s Day and Singles Day also important dates in the Chinese consumer’s calendar.
- No longer a divide between the digital and the physical for Chinese consumers - and everything is done on mobile, from shopping to ordering a taxi.
- Di Lieto: “Chinese tourists… are looking for an experience in store, it’s no longer just about shopping.” Retailers can expect to be shown product pictures from social media channels such as WeChat as part of the Chinese tourist shopping experience.
- “It’s abut understanding what’s expected from your audience and your shoppers - and that’s an omnichannel experience.”
The inbound consumer journey
- Search: research starts well before the trip begins. Importance of celebrity influencer - and knowing who your customer is.
- Social: Di Lieto: “Social media in China is absolutely paramount to everyday life”. (up to 25.41). Research and advice via large influencer networks.
- Weibo: word of mouth, promotion platform, ordering platform. Di Lieto: “It’s a fantastic platform for engaging with key opinion formers… and encouraging your shoppers.” 300m searches a day.
- WeChat: aggregates everything: order food, book a taxi, shop and chat. Closed group platform: target individual customers through in-store QR codes.
- Little Red Book: has become an ecommerce platform and is where people go for advice.
- Important to find out who your customers are, where they are, and what channels they use.
- Dynamic content to engage with them: role of KOLs (keyonline influencers) – and super KOLs. With examples
- Payment apps: in China, must have smartphone to pay - UK retailers that demonstrate through, eg an in-store sticker, they take familiar payment methods will be an obvious choice.
- Case study: World Duty Free: combining UK sites and online via barcodes and banners to run in-store campaigns and win customer data.
- Case study: Unite Students - using mobile payments to encourage Chinese students to use their accommodation through, eg, a Singles Day promotion.
- Be strategic in choice of channels
- Showcase brand story and consumer profiles
- Make customer experience a priority
- Leverage existing fanbase and KOLs in the UK and China
- Make the most of mobile payments
The webinar ended with a Q&A covering issues including social media tactics, website translation and the role of discounts in selling to China. Click here to view the recording.