Luxury Chinese Tourism Market


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Brilliant presentation on the luxury Chinese tourism market by Roy Graff, accomplished Business Development and Marketing specialist with a focus on travel, hospitality and Chinese culture.

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Luxury Chinese Tourism Market

  1. 1. China Edge Plan. Engage. Deliver. © China Edge Limited, 2013 China Market Services for Luxury Retail & Hospitality
  2. 2. China Edge Company Vision & Team © China Edge Limited, 2013 China Edge is a collaboration of sector experts with a wealth of experience in China that brings you the knowledge of how to target, engage and retain wealthy customers from China. China Edge brings the luxury retail, hospitality and travel industries best practices from across the globe, provides strategic and tactical recommendations, insights into the behaviour, aspirations and preferences of high net worth (HNW) Chinese consumers.
  3. 3. The China Edge Team Jeremy @ChinaBlogTweets Strategy and Risk Management Michaela @wolfmichaela Luxury & Retail Marketing © China Edge Limited, 2013 Roy @roygraff Outbound Engagement Yuyu @yuyumedia Cultural Training Arnold @RealArnoldMa Digital Engagement @chinaedge
  4. 4. UK Visa Rules for Chinese Citizens “If the visa process were streamlined it could boost the economy by £1.2bn […] Meanwhile, the Bond Street Association has signed up to a “China-ready” workshop series devised by China Edge to help retailers offer Chinese-friendly luxury shopping” (Financial Times, January 19th, 2014) © China Edge Limited, 2013 “Attracting Chinese shoppers is not just about footfall and revenues,” “It can boost a brand’s value, whether it is fundraising, or preparing for an IPO or ... sale” - Jeremy Gordon, director of China Edge. Financial Times, 19 Jan 2014
  5. 5. New Identity of Chinese Luxury Consumers “ The China Luxury Downturn Is Real - Global Luxury Brands Must Adjust” (Forbes, January 17th, 2014) © China Edge Limited, 2013 “The intense competition among established and new entrants to the Chinese luxury market” has affected growth for established brands and that “the growth of e-commerce has driven prices and value down for many of the previously highly desirable brands” “ Brands must better manage a global inventory and sales system that understands how Chinese approach luxury purchasing. The Chinese customer is now global” - Roy Graff, director of China Edge. Forbes, 17 Jan 2014
  6. 6. © China Edge Limited, 2013 The China Opportunity
  7. 7. • 60% of luxury spend is offshore • Consumers driven by experience, exclusivity, gifting – not just savings / duty-free • Millionaires & middle classes drive growth • Trends incl. anti-corruption (short-term, targeted impact); urbanisation (long-term, wide impact) • Chinese travel is taking off © China Edge Limited, 2013 • 97 million outbound trips in 2013, £80+ bn spend; 100m by 2014 • Top 10% spend over £6,500 per trip Image: J. Gordon Global Consumers
  8. 8. • Be relevant & localise • But no dragons required! • Multiple options for entry / engagement • Be buzzy for branding • Social media is mainstream & essential • Be online for consumer research © China Edge Limited, 2013 • In Chinese, on Baidu • Be welcoming • China-friendly service & payments Image: J. Gordon Engage & Serve
  9. 9. Challenges • Intellectual property • Register wide & early • Monitor & enforce – protection is possible • Culture & Crisis • Understand & adapt to sensitivities Image: Weibo; Business Insider • Don‟t “hurt the feelings…” (like Zadig & Voltaire) © China Edge Limited, 2013 • Is China a cost or investment? • Tailor strategy to resource constraints • What‟s the cost of missing China?
  10. 10. • Strategy • Short & long-term • Start at home & develop into China • Marketing • Proactive, in-market multiplier & consumer targeting © China Edge Limited, 2013 • Leads to home & away sales • Service • Culture, language, information • Promotions, payments & privileges Image: J. Gordon China Edge Toolkit
  11. 11. Who are the HNW Chinese? • Young • 73% of luxury consumers are under 45 • Average age of a millionaire is 37 (vs. 57 in U.S.) • New • 1st-time buyers accounted for 67% of the luxury growth • Majority from 2nd & 3rd tier cities • Brand conscious • Brand is #1 driver of luxury experiences © China Edge Limited, 2013 • Key Segments • • • • • • Modern Business Owners International Professionals Nouveau Riche Second Generation Rich Delegations and Officials Traditional Business Elites
  12. 12. Where are Chinese HNWI from? Modern Business Owners International Professionals Nouveau Riche Traditional Business Elites Second Generation Rich © China Edge Limited, 2013 Government Officials Taiwan Hong Kong
  13. 13. What Motivates HNW Chinese? • Sense of self • Luxury consumption helps show that one has „arrived‟ • Traditional culture of Face is central to this feeling • Drivers • Extend Business / Asset Portfolio • Education for Self / Children © China Edge Limited, 2013 • Relaxation or Adventure • Shopping for Self / Gifting • Health and Beauty
  14. 14. Catering to HNW Chinese • Respect & Understanding • Overcome instinctive distrust • Engage at a personal level • Learn to see beyond the clichés • Key Issues • Information © China Edge Limited, 2013 • Trust • Loyalty • Cultural Understanding • Food
  15. 15. Reaching HNW Chinese • Have a multi-channel strategy and marketing plan • To push demand & ensure appropriate distribution • Localise wisely with bespoke content • Not simply translation – And protect your brand well • Have a clear focus of your target market • As China is too big and complex to cover it all © China Edge Limited, 2013 • Where? • In the UK • Chinese Travel Trade • Chinese Media • Digital Marketing • Social Media
  16. 16. Millionaires Online When they are not on social media sites they are on news portals © China Edge Limited, 2013 • 63% prefer Sina • 35% prefer Sohu • 83% of Chinese millionaires use the internet daily • They frequently engage & curate content on social media
  17. 17. Online Engagement © China Edge Limited, 2013 China boasts the highest social and ecommerce engagement of any country The social media landscape is highly segmented with niche platforms for specific audiences
  18. 18. Organic and Paid Social Weibo has many paid options Reach 100% of your fans with Weibo‟s new promoted posts © China Edge Limited, 2013 Weibo is not the Chinese Twitter • It has a mix of functionalities from both platforms Great for competitions or events
  19. 19. Organic and Paid Search Browsing habits of Chinese audiences are fundamentally different • Don‟t need an overly simplified customer journey • More willing to find the information they need © China Edge Limited, 2013 Google Baidu Baidu BrandZone is a powerful tool but can be expensive
  20. 20. China Edge Ltd. Plan. Engage. Deliver. China Market Services for Luxury Retail & Hospitality © China Edge Limited, 2013 @chinaedge