Everyone knows the China market is huge and can only get huger – Chinese travellers are expected to make up 40% of Asian outbound (international) travellers by 2030.
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And they can spend – according to the Boston Consulting Group, Chinese urban travellers took about 500 million domestic and outbound trips (excluding day trips) in 2012, spending about US$260 billion. These numbers will increase to 1,7 billion trips and UDS$1.8 trillion in spending.
But you can’t win them all, right? So to win in the Chinese market, you’ve got to pick your battles carefully and find your sweet spot.
BGC together with TripAdvisor China (Dao Dao) recently did a study on “Winning The Next Billion Asian Travellers – Starting with China” and this is an excerpt of the report, which advises the nine steps you should take. (For the full report, click here.)
1. Follow the money
From 2012 to 2030, three segments of the outbound leisure market will grow – young affluents (18-30), senior professionals (45-55, travelling without an organised tour group), and small groups of friends and families (30-45, also travelling without organised groups). And they’re willing to trade up in lodging, and spend on dining and shopping.
2. Anticipate new, high-volume destinations
While 45% trips in 2012 were to Hong Kong and Macau, 35% to rest of Asia and only 20% to non-Asia, the percentage venturing further afield can only grow. China’s outbound leisure and business travel market is projected to grow to about 211 million trips a year by 2030, and interest in non-Asia places will rise. According to data from TripAdvisor China’s official site, 44% researched other Asian cities while another 44% researched for destinations outside Asia. Paris, Rome, London and New York were among the most frequently researched.
Larger cities, hot spots and beach resorts were favoured destinations in 2013 and will continue to be in the future. Outdoor and adventure trips are emerging as a new trend, and destinations like New Zealand, Nairobi and Serengeti National Park are gaining appeal.
(Pictured right: Oriental Pearl Radio & TV Tower in Shanghai)
3. Capture big prizes in “small” cities
More than 80% of China’s live in places many people would be unable to find on a map. By 2030, 29 “nonsuper” tier 1 cities will have MAC populations of more than three million. In Wenzhou, a tier 2 city in Zhejiang, daily sales of Vertu luxury mobile phones reportedly match sales in Beijing and Shanghai. TripAdvisor’s China data showed more than 70% unique site visitors researching outbound destinations lived outside the four super tier 1 cities.
4. Keep your Chinese travellers happy
You know the old adage – heed their needs, meet their needs and they’ll come back to you. Many preferences are evolving rapidly, particularly for the young affluent. For example, they tend to be more spontaneous and have shorter planning cycles. Chinese cruisers tend to be younger than Western cruisers. When it comes to hotels, a TripAdvisor survey indicated location and reputation as the most important considerations.
5. Brands really matter but you need to adapt yours
Many global brands are less well-known in China. Some are leveraging their global brands but making attempts to customize for the local market. With the market still evolving, there is little brand loyalty as yet.
6. Be creative to maximise your marketing impact
With the growing popularity of social media, mobile technology and celebrity endorsements, travel suppliers have started to use the concept of advocacy marketing. But key questions have to be asked as to what it is you’re trying to convey. Some success has been seen in New Zealand’s hosting of a Chinese celebrity wedding in Queenstown, and the 2012 Chinese movie called “Lost in Thailand” had a huge impact on Chinese travelling to the country, with the tourism board maximizing the opportunity.
7. Know your distribution options
The options are many, the market complicated but there is a clear trend towards online. TripAdvisor’s 2013 survey of affluent Chinese travellers showed that use of online agencies is up 17% since 2010. Many global hotel brands have acknowledged the importance of the online channel with Ctrip commanding more than 40% of the market.
8. Join forces to win but choose your partners wisely
The study points to local tourism boards as powerful allies and mentions government-sponsored campaigns such as those done by Australia, Hawaii and Japan. Airline-destination partnerships have also worked – for instance, Emirates and Dubai running the “Do More In Dubai” campaign in 2012 and Dubai has become one of the top 10 most researched destinations by TripAdvisor China users in past two years.
9. Invest in the future but keep your options open
In other words, stay flexible. Make temporary adjustments to your product as and when necessary to take advantage of Chinese peak-period travelling times.
