How Retailers Can Get ‘China Ready’

5 minute read

By the Hot Pot China Client Team

There’s nothing we love more than partnering with our clients to educate retailers . Thank you to Covent Garden for inviting us to share with their tenants on how to get ‘China Ready’ for Summer 2020.

Chinese tourism has been understandably slow so far in 2020 as a direct result of the coronavirus. While this has led to temporary setbacks, China has shown great resolve and solidarity in combatting the spread of the virus and there are encouraging signs progress is being made.

We expect both retail sales and global tourism will rebound in the second half of this year, particularly in time for the key travel season of Golden Week (Oct 1-7).

It is important that retailers use the current period to evaluate their China appeal and plan for effective campaigns and initiatives. There are more than 137 million affluent households in China. Collectively they spent £600m in the UK in 2018. Given that only 9% of Chinese have passports, the long-term potential for retailers in the UK cannot be ignored.

What is ‘China Ready’? 

Chinese consumers shop differently. Their digital ecosystem has almost no crossover with apps regularly used in the West, and they generally prefer to pay through social-payment platforms like WeChat & Alipay. Even the way in which Chinese tourists discover and engage with brands requires an entirely different marketing approach and user journey. Brands shouldn’t adopt a cookie-cutter approach based on their existing global markets, but adapt both their online and offline offerings to Chinese consumers’ needs and preferences.

During Covent Garden’s event, we spoke with retailers about the quick wins to help them get ‘China Ready’ ahead of the summer and Golden Week in October.

Focus on What’s in Front of You  

For Chinese consumers, brand affinity is a more important purchase driver than price. In recent years, brands have turned to KOLs (Key Opinion Leaders) to build affinity and recommend their products. However, the sharp rise in KOLs means that Chinese consumers’ social feeds are now saturated with what is essentially paid advertisements. This has led to a growing mistrust for many KOLs.

As a result, we’re seeing the rise of KOCs (Key Opinion Consumers). These are not professional influencers, but rather consumers who influence. They are social-savvy digital users that leverage a modest but engaged social following. They are an authoritative voice with their immediate circles and therefore only align themselves with brands that match their persona. Their followers view their recommendations and reviews as authentic. In simple terms consider the actionable power of a recommendation from a friend versus an aspirational celebrity.

Encourage and reward the KOC audience through incentives, invite-only events and exclusive content. Not only will they evangelise brands to friends in the UK, but they will also share with friends and family at home in China. This allows UK retailers to influence a wide network of tourists before they arrive in the UK.

No Brand is an Island 

Collaborations are a huge trend in China right now. Typically we see brands working together to make new products and collections. One of our favourite edible collaborations is from White Rabbit & Godiva.

We also see collaborations in content too. Western brands are able to effectively and authentically localise their content by incorporating Chinese cultural references into marketing campaigns. This drives buzz without needing to rely on big media budgets.

It is also important to promote stores at a hyperlocal level. There are often creative opportunities to reach Chinese consumers through your network. Many of these local partnerships won’t require a heavy fee or may even be open to resource exchange. There are local destination accounts (such as Covent Garden, Regent Street etc.), overseas travel partners, universities, and tourist boards that seek collaborations in exchange for incentives and content. Any of these partnerships at the local level can make a big impact with minimum investment.

Turning Footfall into Sales

Driving footfall in-store is only half the battle. There are plenty of barriers in-store that can block a sale at the last step. 80% of Chinese consumers are more likely to make a purchase abroad if they can pay with familiar payment methods such as WeChat & Alipay. Installing these payment methods may not trigger a purchase per se, but they will give more confidence in purchase process and we have seen this translate into higher ATVs.

Chinese signage and Mandarin FAQ’s are also quick wins. Chinese tourists tend to be efficient shoppers, often only spending a 24-48 hours in each city when visiting Europe. To ensure a more streamlined shopping experience, hero products should be easy to find for customers who may not be fully proficient in English. For brands that have a high volume of Chinese tourists, Chinese-speaking staff can further guide tourists, while also guiding them through the store, sharing the brand’s heritage, and providing recommendations on how to choose the perfect gifts to take back home.

Lastly, Chinese consumers are often used to a different retail experience in China than their Western counterparts. In China, many top retailers focus less on selling products, instead focusing on immersing their consumers in an offline, engaging brand experience. This focus generates social currency, and consumers reward the brand by sharing photos and reviews online with their peers. This experiential approach has a bigger impact on conversion as brands then leverage this to capture a larger digital audience through ecommerce.

The stakes have been raised. Chinese tourists now expect the same dynamic and interactive in-store experiences when shopping abroad. But this also provides substantial rewards for retailers. Social platforms, such as Little Red Book and Weibo, are the first place that Chinese tourists will research when finding places to visit in new cities. Generate the right buzz from an in-store experience and you’ve already taken the first step to marketing on Chinese social platforms.

In Conclusion…  

Becoming ‘China Ready’ doesn’t always necessitate a big budget, but it does require that corporate teams and store managers think about the Chinese consumer at all key touchpoints. Retailers must work to alleviate purchase barriers or risk unconverted footfall.

To lay the groundwork ahead of Summer 2020, retailers should:

  • Build & reward a network of Key Opinion Consumers close to home
  • Expand their network to build partnerships & collaborations based on resource exchange
  • Upgrade the in-store experience for the Chinese consumer by adding Chinese payment solutions, signage, and social sharing opportunities.

At Hot Pot China we partner with forward-thinking brands on their China activity. We guide our clients in maximising ROI from their short, medium and long-term marketing activity in China, as well as executing the same in-market.

Contact Hot Pot China to discuss how our team of China specialists can help realise greater value in your brand, digital and eCommerce initiatives.