Why you need to impress Chinese millennials
To put it simply, businesses in the Middle East should not only 'take notice' of Chinese millennials, they should tailor whole sections of their entire business model, strategy and budget toward serving, pleasing and winning this leading demographic of global luxury travel and consumption.
The question is more what must brands do to ensure that the affluent Chinese millennial takes notice of them.
To read international media or spend a few minutes scrolling your LinkedIn feed is to be faced with the undeniable conclusion that you must attract Chinese travellers. The developments in the country are not mere economic adjustments or an enhanced quality of life for the lucky few – a complete shift in almost every aspect of society has taken place, to not only give the urban populations an improved lifestyle but to place China as the leader in many ways.
China leads in digital – referenced to the US: mobile internet users (700 million versus 200 million), mobile payments (60 trillion versus 1 trillion), and delivery of orders (31 billion versus 13 billion). China leads with 32 per cent of luxury consumption globally, with luxury retail tourism projected to grow due to 74 million travel-hungry Chinese millennials graduating from university in the next decade. Chinese millennials (specifically the age group 15 to 29) comprise half of China’s outbound travellers from China. About two-thirds of this group are wealthy.
Overly focusing on millennials has been rightly derided in the West – while in China, the millennials are fully recognised as the drivers of consumption and an affluent lifestyle. They are the first generation in China who have even experienced 'lifestyle' and the aspiration of material goods. This has been developing for 15 years, and Chinese millennials are now as savvy - or even more so – than their western counterparts. They are past big logos, bling and the obvious fashion brands, for example, craving niche, artisanal creations and are fully discerning of the true meaning of luxury and sophistication.
The Middle East connection has been strengthened recently by aspects such as visa-free travel to certain regions. China remains Abu Dhabi’s largest overseas source market, with the region openly stating their plan to attract 600,000 Chinese tourists a year by 2021. In Dubai, 540,000 tourists arrived from China in 2016, up from 450,000 a year earlier and cementing the country’s place as a top 10 source market for the emirate. Thirteen Chinese cities, including Beijing, Guangzhou, Shanghai and Shenzhen, as well as Hong Kong and Taipei, are connected to Dubai with more than 100 weekly flights.
One of the clearest indications that businesses in the region must serve Chinese consumers is that Chinese tourists are the biggest buyers at Dubai International Airport, accounting for 9 per cent of total sales. Fifteen years ago, Dubai duty Free had no Chinese employees, they now employ almost 700 Chinese staff out of 5,900 in total. Chinese travellers are now adventurous, curious and exceptionally keen to travel somewhere less known by their peers. They want to be the first to show off a destination on their social media. They are captivated by the exoticism, history and culture of the Middle East.
Chinese social media platforms are far more advanced and integrated into everyday life than those in the rest of the world
The affluent Chinese consumer is like no other, because China’s digital, media and commerce system is like no other. It is a fully individual ecosystem. There is no Facebook, no Instagram, no twitter or YouTube.
However, the Chinese social media platforms are far more advanced and integrated into everyday life than those in the rest of the world. Cash has been made as good as obsolete, as any type of transaction or payment takes place via WeChat pay or Alipay. Some 90 per cent of Chinese tourists were shown to prefer to use mobile payment when abroad versus any other kind of method.
As well as pioneering digital fields, the KOL (key opinion leader) phenomenon is a perfect example of China seeing something in the West – influencer marketing - and super-charging it into a whole new level. KOLs have taken basic influencer marketing and formed an entire industry and media out of it. The leading KOLs are more powerful than fashion editors or 'traditional' celebrities, with fanatical followers ready to buy anything that they recommend – with just one tap needed to go from a WeChat blog post to a WeChat store, paid for with another tap and delivered the same or next day, thanks to China's amazing delivery network.
Just a couple of examples display the power of KOLs, the pioneering digital uptake and millennials' shopping habits; in 2017, Becky Li, a fashion blogger, sold 100 limited edition blue MINI cars in just one day, after having curated various recommendations of blue-coloured clothing in the previous posts. Another KOL, ‘Mr. Bags’, is known for truly adoring the items that he features. Working with Givenchy, he sold $150,000 worth of bags on WeChat in 12 minutes (with each bag priced at around $2,000).
Among the many aspects that a business must tailor to Chinese travellers is that they need to get their shop in order! They simply must offer WeChat payment services. QR codes to scan through to their WeChat account should be everywhere. They should plant a digital footprint on Chinese social media.
Around 80 per cent of what Chinese travellers buy abroad, they have already decided while at home. Businesses in Mena must engage with them while they are at home, collaborate with known brand ambassadors, talk about the story of their brand and engender complete understanding.
A website in Chinese is fine, but it's not 2005 anymore. Your brand must be on WeChat and Weibo at a minimum, and then move to explore the vast and unique digital ecosystem of China. The competition is huge - but so is the opportunity.
• Chloé Reuter, founder of Reuter Communications in Shanghai, Hong Kong and Singapore, visited Dubai to speak at the Arabian Travel Market on how brands in The Middle East should connect with Chinese travellers. Reuter Communications is also opening a new office in Dubai, to help luxury brands do just that