In the last couple of months, there has been a lot of talk about cross-border commerce and the need for luxury and premium brands to establish channels to sell to China in-market.
While this is certainly a key trend, the JD Global scandal which took over Weibo and WeChat last month shows that consumer confidence in online luxury goods and the ability for Chinese e-commerce platforms to guarantee authentic products and quality services is far from optimal.
This could be why, in a country so digitally dependent, while 70% of purchases are influenced by online content, 64% of luxury sales are still done offline.
It would also explain why Chinese consumers are three times more likely to buy luxury purchases abroad rather than while at home, where they feel assured of the authenticity, pricing and service attached to their purchase.
As a UK brand, why should this matter to you?
Because the Chinese inbound market has massive potential as a key audience.
Last year alone 267,558 Chinese tourists visited the UK, spending an average of £2082 each while here on products such as cosmetics, skincare, apparel and accessories. In 2018 we expect both these numbers to continue to rise.
In the last three months alone, Heathrow Airport has opened new direct routes to Xi’an and Qingdao, with flights to Changsha starting in May and Edinburgh Airport has also announced direct flights to Beijing. Confidence in the growing numbers of Chinese tourists to the UK is high all round, the opportunity is there for those who make the most of it.
However, this new opportunity also brings with it a series of challenges. The main one being increased competition. In the last 6-12 months, we have seen a definite surge in brands investing in Chinese digital marketing, with leading stores like Harrods offering WeChat Pay and Alipay options for consumers in store.
We believe 2018 will be the turning point for UK brands; Chinese consumers can no-longer be ignored or underserviced. Their expectations are high, numbers and spending power increasing and brands who don’t act now will soon fall too far behind their competitors to catch up.
Another challenge is the Chinese consumer themselves, who are often more sophisticated and complex than overseas brands give them credit for. One look at the Chinese consumer journey can show us the difference, for it is more complicated than that of US, EU or UK consumers. According to McKinsey and Forrester research, the average Chinese customer journey has fifteen touchpoints (over 50% of which are online), whereas they average UK and US consumers have just eight.
Timing and channel selection are vital to success when targeting Chinese inbound consumers, with many brands watching a vast potential audience slip through their fingers simply because of ‘too little, too late’.
The majority of Chinese consumers plan their shopping itinerary at least one month in advance of setting off for their flight. Brands that are not visible pre-departure will stand a slim chance after their potential audiences have arrived in the UK.
Even with competition heating up, the process of getting to grips with multiple Chinese digital channels or even choosing where and how to promote their products is costly and timely and for brands new to engaging with China it can be an uphill struggle.
This is why we at Emerging Communications run our workshops and masterclasses, to educate brands on everything they need to know about inbound Chinese consumers in order to fast track their journey and give them the confidence to move forward.
Education is the first step to success and with the inbound peak season just three months away, there is no better time to learn about the Chinese inbound consumer.
By Marie Tulloch, Inbound Marketing Manager.