Opinion

Why it will only be a happy Chinese new year for brands that take the plunge

Many UK marketers still resist the Chinese pound, yet this is a strong and growing market. As China gears up to celebrate new year, Domenica Di Lieto, managing director of consultancy Emerging Communications, explores the potentially lucrative opportunity Chinese consumers offer in the UK, as well as for brands looking to break into China.

Chinese tourists will spend £8.9bn this year outside China
Chinese tourists will spend £8.9bn this year outside China

Forget the noise about the economy and share prices in China. Chinese spending in the UK has never been higher, it is growing, and soon to escalate to include home-related goods and services.

Not only will new visa regulations make it easier to gain entry to the UK, but tourist spending will no longer just be about luxury goods, or even more frequent visits – it will include property and everything that goes with it, such as home furnishings and financial services. In California, Chinese nationals spend more than £12bn annually on private property, which brings in nearly a quarter as much again in related purchases.

The average transaction for Chinese tourists in the UK is currently worth £1534, but often overlooked is the growing 100,000-strong student market. Unlike their domestic counterparts, they have, on average, £1500 a month to spend on non-essential items.

These two consumer groups each present a great attraction in their own right, but also combine to be a gateway into China itself.

Social is key

Because Chinese social media is so relied-upon for product recommendation, student and tourist product experiences turn individuals into brand ambassadors who reach very large audiences. The result is that these two groups are lucrative and perfect testing grounds, as well as messaging conduits prior to entry into mainland China.

The student and tourist groups are lucrative and perfect testing grounds, as well as messaging conduits prior to entry into mainland China

However, what you cannot do is treat communication with Chinese consumers as a substratum of domestic marketing. Hiring a Chinese intern to translate messaging posted onto Weibo or WeChat, or creating a Mandarin website hosted in the UK, did not work five years ago, and it certainly will not work now.

Differences go far beyond language, and even culture. The way in which brand messages are received and acted upon are different, media is different and how it is consumed and its mechanics are different. Even how individuals pay for things can be alien to Western marketers.

Chinese digital media, and social media in particular, is shaped around the innate desire to find and share information, plus the very great demand for a bargain. This lends itself perfectly to social media, and means half the purchasing of medium- and high-ticket items bought in China stems directly from social-media recommendation.

Tailored activity

Media-owners and brands have responded to this not just through commercial messaging on social platforms, but through an array of services and response mechanics that make WeChat and Weibo essential for product information, obtaining discounts and buying things directly through social-media bank accounts.

Buying power is of another magnitude as far as Chinese tourists are concerned. They are the biggest, wealthiest consumer group that ever existed – they will spend £8.9bn this year outside China

QR codes are everywhere in China. They are used for promotion redemption, in-store and elsewhere, as well as the ability to swipe and buy – consumers swipe against codes in advertising or on product labeling and items are delivered direct to the home.

Chinese tourists and students expect these types of marketing technology and promotions wherever they go, and UK brands that tap into what is familiar reap big rewards.

For example, using Chinese social media and offline engagement, The Cambridge Satchel Company, one of our clients, promoted a tiered discount to encourage Chinese customers to shop more in-store in the UK. Timed for the Chinese Golden Week national holiday period, the campaign successfully increased footfall and sales value per order. 

Running strategic Weibo and WeChat activity supported by SEO on Baidu and 360 will bring optimum rewards, but if this seems like a lot of investment and hard work, and what you really want to do is test the market and at the same time capitalise on sales opportunities, there are ways of reaching target groups more easily.

Strategic targeting

There are Chinese digital social Key Opinion Leaders, aka KOLs, local to Britain, such as Red Scarf and Here in UK, that are dedicated to providing visitor-attraction details and offers, retailer and product information, plus news on promotions and shopping tips. 

For targeting students there is UVIC, which provides very effective options. UVIC is a global university placement organisation, but has extended its remit to being a content and marketing-service provider. With its detailed knowledge, database and great contact network it offers valuable and unique benefits. Recently, for the first time, UVIC started allowing brands to use its infrastructure.

Buying power is of another magnitude as far as Chinese tourists are concerned. They are the biggest, wealthiest consumer group that ever existed – they will spend £8.9bn this year outside China. New UK visa rules will enable the guarantee to be able to make multiple visits. Elsewhere, this has led to house-buying and with long-term associated purchases.

So far, most UK marketers have not so much struggled to attract Chinese visitor spending power as keep it obscurely at a distance. It remains to be seen how much will there is to resist the Chinese pound.