More and more Chinese consumers are taking trips abroad. China’s outbound tourism has grown almost 500% in the past decade, and 100 million are expected to travel this year. According to Global Blue, their overseas spending climbed 30% in 2012 alone. That’s fantastic for airlines, hotels, tourism operators and souvenir shops. But it’s also a great opportunity for other brands to win over a captive audience who could grow your market both at home and in China. The Chinese who travel are the affluent ones. They’re generally fond of foreign goods and are more likely to be key influencers. They’ll buy, recommend and even gift your wares to their family, friends and colleagues. They may even praise them on Weibo.
Chinese tourists, foreign students and business visitors are all potential brand ambassadors. There are numerous quick wins to take advantage of that, from having Mandarin pages on your website and accepting Chinese payment methods, to teaching customer-facing staff some basic Chinese etiquette and greetings. Even a Chinese information flier to slip into the bag wouldn’t do any harm. As you’ll read below, there is plenty of opportunity for luxury brands to up their game by better catering for them in markets outside of China; much of applies to other segments. For food and beverage, you may be interested to see how Treasury Wines is educating Asian tourists at duty free shops. The Chinese market now spans far beyond the skyscrapers and food scares of the Middle Kingdom and there are plenty of opportunities for you to take advantage of that. Some you may read about today. As always, we hope you find something helpful and forward it onto a friend who may as well. Enjoy!
Where Chinese Consumers Are Spending Their Cash: Big city dwellers in China spend 18 percent of their disposable income online, and in smaller cities like Wuzhou, it’s 27 percent. 40 percent of online shoppers wouldn’t have bought anything if it wasn’t for eCommerce according to McKinsey.
Apple Apologizes To Chinese Consumers For Seeming ‘Arrogant,’ Promises Warranty Changes: The last couple of weeks have been rather interesting in China, following Apple’s bad press on CCTV. While the State-controlled media and some consumers have been on an Apple-slating rampage, the power of Apple’s brand has become increasingly evident with the flurry of support from Chinese consumers who praise the innovator and know Apple’s service far exceeds local State-run brands not targeted by the Government. However this is China, where you just don’t try and take on the Government, and Apple knew it was right to apologise to Chinese consumers and promise warranty changes.
Discrimination Against Chinese Consumers. Or Not?: Interesting commentary on how businesses are treating Chinese consumers differently, in good ways and bad – when does adapting to the Chinese market become discrimination?
Product Woes: Telecommunications were the top product for Chinese consumer complaints, followed by apparel then food. Top services for complaints are shopping via TV/Internet/Mobile, then mobile, then Internet access. In related news, Chinese consumers may soon be able to file class action lawsuits against large corporations.
What Chinese Consumers Intend To Buy In 2013: 70% of Chinese consumers plan to spend more in 2013 than 2012. Electronics sees the biggest gain at 43%, with smartphones being the product most intend on purchasing.
Luxury Carmakers In China Digital Drive: Luxury car makers are using the web and social media to sell cars as digital appeals to younger consumers – under 45 year olds make up 80% of high net individuals in China. Audi is opening up an interactive showroom in a Beijing shopping mall and Daimler’s special Year of the Snake 666 edition sold out in 8 hours on a Weibo special.
How Many Users Can You Really Reach On Sina Weibo: Interesting findings that just 13.1% of Weibo users write original posts and just 43% write any posts at all. Notwithstanding, many not writing posts, are still influenced a lot from those 13.1%, as alluded to in the 6 reasons why Weibo is powerful.
Chinese Feel Power For Change Through Consumer Choice: 7 slides hitting home the importance of businesses being socially responsible in China, where 65.4% of consumers considered being a responsible customer important, more than any other major AsiaPac market. The Havas study also discovered: – 79% are more interested today in where products are made; – 80% would like their favourite brands to play a bigger role in their community; – 84% felt obliged to support global interests; – Chinese consumers feel Social Media has had the biggest significance on their influence of major AsiaPac markets; – Chinese consumers have some of the highest trust in NGOs and non-profits; – 81% of Chinese consumers believe change is good, and 84% things will improve.
Treasury Wine Opening Wine Bars In China: Sales of wine in China hit $US41 billion in 2012, up 20% from 2011. Hoping to tap into that growth and following extensive research into the market, Australia’s Treasury wines is increasing its presence at duty-free shops where it is does tastings targeted at Asian tourists to teach them more about their premium brands. They’re also looking at opening wine bars, restaurants and entertainment venues, following the lead of Diageo who opened its second flagship bar in China – Johnnie Walker Houses which provide a good way to identify its VIP consumers while bolstering the brand and profits from the region.
Chinese Consumers Aware of Food Safety: Chinese consumers have a high awareness of safe food and are prepared to pay a premium for it. However, they have limited knowledge about the concept of safe food, low recognition of relevant labels and limited ability to identify safe food.
Most ‘Beef’ Sold At Hangzhou Market Is Pork: First it was mutton pumped fill of chemicals to resemble duck, now almost 2/3rds of ‘beef’ products at a Hangzhou market is said to be pork (hopefully not fished out of the Huangpu River).
Chinese Consumers’ Demand For Fur Coats Sends Pelt Prices Skyrocketing: Chinese account for more than half of fur coats sold globally, pushing up pelt prices 129% in 3 years. Much of the fur is imported as locals furs are low quality from in-breeding and poor nutrition.
The 10 Key Success Factors For A Cosmetic Brand In China: 10 key elements from businesses who are tapping into China’s cosmetics double-digital growth: distribution, social media, website, eCommerce, traditional advertising, opinion leaders, celebs & Chinese models, positioning, adaption to the Chinese market and interaction with consumers.
Lego’s Asian Building Block: Lego uses brand extensions, online games, fan collaboration portals, Legoland stores and branding itself as ‘better’ to grow 45% from 2009-2011, and an estimated 80% in 2012. China Toy Association Toy Consumption Survey found it one of the top-5 highest regarded brands. Their first China factory is expected to be running in 2014, let’s hope they can retain the high regard for their brand.
Chinese Slump Dents Global Art Market In 2012: Chinese spending on art and antiques fell 24% in 2012 to 10.6 billion euros, with auction sales dropping 30%, slipping China to the number 2 market behind the USA. A slowdown in Chinese economic growth and liquidity, less speculative investors and a clampdown on luxury goods, in addition to a lack of quality, high priced supply contributed to the drop. “Blue chip” artists are increasingly the focus of collectors, with post-war and contemporary art faring the best.
Global Brands, Meet Your Global Chinese Customers: Many luxury brands are under-investing in home markets and missing out on a bigger share of the overseas purchases that account for 60% of Chinese luxury spend. Key improvements include cross-border collaboration, ensuring the shopping experience is spot-on (everywhere), segmenting Chinese groups and capitalising on Chinese travellers to give them a unique experience in a brand’s home market.
Hermes, Chinese Consumers Accounted For 30% Of Worldwide Sales: Further reinforcement for a ‘global’ strategy when selling to Chinese luxury consumers. Chinese consumers accounted for 30% of Hermes worldwide sales, although Mainland China sales were 10%, with HK/Macau/Taiwan another 10% and Chinese tourists further afield buying the remaining 10%.
Now You Can Use Your Phone To ‘Call’ The Dead: Nice creative use of QR Codes – a Chinese cemetery is plastering graves with QR codes so visitors can scan and find out about the deceased on their smartphone.
That’s the skinny for the week!
If you’ve missed earlier news or need to learn more, there’s a library of information about Chinese consumers in prior China Skinny Weeklys right here. You can have this delivered to your inbox each week by subscribing for email updates, or if social media is more your thing, please follow us on Twitter, Facebook, Linked In or Google+, or subscribe to our RSS feed. If you have any feedback or suggestions for future articles, please let us know.