The rise of Chinese tourism has gained the attention of travel, tourism, and hotel companies across the globe. According to UNWTO, 66 million Chinese will travel overseas this year, a 15 per cent increase over last year, and 100 million will be global travellers by 2020. As a result of three decades of spectacular growth and development, China recently became the second largest economy in the world, behind the United States. The country has also become a major market for the world’s leading international consumer good companies. Many travel brands are trying to capture the attention of these very valuable new customer segments, but this not without challenges and disappointments, for various reasons.
Reaching young consumers directly through Chinese social media
The way many Chinese consumers are finding out about new destinations and travel services, such as hotel or cruise brands, is via the Internet. With over 485 million Internet users in China (more than the entire population of Europe) more than 80 per cent of Chinese travellers research and educate themselves about destinations and brands online. According to the Digital Influence Index, social media is the most influential medium in modern China, more than travel agents, newspapers, magazines, or TV.
Online and offline are not separate, and it is important to allow for different means of expression. Real time is a way of life for the Chinese, they need to get news and respond as things are happening. Even though the time spent on email is similar to the same age group in the US, tools that are anything less than real time seem outdated. Young Chinese consumers want answers; they want to feel in the loop, they want to feel valued. For brands, helping customers feel “in the know” is important, especially for the younger generations.
Understanding the demographics of modern China
People in China born in the 1970s, 1980s, and 1990s represent the prime affluent consumer market in China. In other words, the youth market. This should influence how brands interact and they need to adapt their marketing strategies when it comes to Chinese youth. Related to that, the fastest growing cities are not the first tier cities, Beijing, Shanghai, and Guangzhou, but cities such as Dalian, Chengdu, Kunming, Xiamen, and others. Traditional media and events are no longer the best way to reach these consumers as the Internet becomes the most important channel to connect with affluent consumers all over China.
New customers, new ways of travelling
A structural change is happening in the way Chinese customers choose to travel. While large tour groups will continue to drive volume to destinations, a recent study by the Boston Consulting Group revealed that 95 per cent of Chinese tourists are unsatisfied with the current travel products and services available both domestic and outbound. Package tours with busy schedules in multiple destinations are being replaced by multi-directional developments such as in-depth and theme tours. Chinese tourists are increasingly pursuing personalised tour experiences, shifting away from the traditional concept of a tour group. However, many first-time Chinese travellers see the benefits in joining a tour group which include not having to worry about complicated visa application processes, having to navigate in destinations where Chinese is not widely spoken, and the convenience of travel planning and competitive prices through travel agents..
New consumers, new opportunities
Younger Chinese people in particular are sophisticated, and the growing appetite for interesting Western brands, famous historic locations and art galleries are testimony to that. They seek respect and global integration, they want to be part of it all and they work hard – many at international firms as well as in entrepreneurial domestic companies.
For them, travel is an important part of self-expression, and how they spend their valuable time is part of demonstrating who they are.
Understanding young Chinese consumer groups
The term “youth” is too broad. When brands contemplate who their ideal vs. actual consumer is, they have to be specific about which subset of “youth” they are targeting. To treat Chinese consumers as one, homogenous audience is disrespectful a waste of money. Every campaign must carefully consider the gulf of differences between the different age groups, shown in the table below.
Finally, how can travel companies leverage these trends in order to grow their businesses in the China market?
•Don’t try too hard to be trendy Just because you are communicating with young people. Many companies put too much effort into picking up trends rather than creating arenas for young people to express themselves. Never underestimate the subtle nuances in people’s desire to be different. “Being different” doesn’t mean the same thing for people born in the 70s, 80s and 90s.
•Make use of the instinctive competitiveness of those born post-1980s. They tend to live their lives among their peers and compare themselves with them. For the marketer, this is the perfect basis for all sorts of consumer competitions such as online campaigns and contests: If the results are visible and comparable to peers, this will encourage them to engage in the game.
•The younger the target audience, the less influenced they will be by so-called “celebrity endorsers”. Instead, they will turn to the opinion leaders amongst their peers. This creates some challenges for marketers, since the new leaders of opinion may be harder to identify than the traditional celebrities. On the other hand, it creates opportunities in terms of credibility, closeness to the brand and creativity. It is possible to target the new opinion leaders by studying their communication patterns online. The key is to identify them and to build long term relationships with them.
So, as it turns out, Chinese youth are not so very different from young people all over the world.
By: Jens Thraenhart, Managing Director, Dragon Trail