149 million Chinese tourists traveled internationally in 2018. Those affluent shoppers represent a large sales opportunity for retailers, travel services and tourist destinations that know how to leverage the mobile apps that are embedded in everyday life in China.

Ilia Sokolov, head of Asian business development, Yandex.Checkout

Ilia Sokolov, head of Asian business development, Yandex.Checkout

In 2018, the number of tourists from China traveling internationally was 149 million. This impressive figure exceeds the current population of Great Britain, Germany, Russia, France, Japan, and many other countries—and every year, the number of Chinese citizens traveling abroad for the purpose of tourism is growing by almost 10%.

Chinese tourists are a large and promising category of shoppers

As we know, these 149 million tourists are citizens of a country with the second-largest economy in the world, and every financially secure traveler is an opportunity for the local businesses of the countries receiving the Chinese tourist traffic.

Fashion brands and department stores create vivid and attractive WeChat profile with presentations of new collections, fashion looks and hot prices.

However, in order to interact with the Chinese tourists profitably, it’s worth exploring the habits and preferences of this somewhat unusual segment of tourists. Here are some pointers:

  • Chinese tourists more than others love natural landscapes and city sights, and they’re highly interested in various theme parks.
  • For communication, tourists from the People’s Republic of China prefer to use international roaming provided by Chinese telecom operators. For Internet access, they usually use free local Wi-Fi points or Wi-Fi routers rented upon the arrival at their destination.
  • When planning a trip to European countries (including Russia), guests from China settle on a budget of about $5,700 (including travel and accommodation expenses), and they’re prepared to spend an average of about $3,700 within the country of destination itself.
  • For shopping, tourists prefer duty-free stores, large shopping centers and luxury category stores, where prices for international brands are often lower than in China. Product categories popular among Chinese consumers include beauty and skin care, local unique products, souvenirs, clothing, and food. In contrast to other tourists, guests from China prioritize not the overall price of the product, but the percentage of the discount provided on purchase, as well as the availability of convenient payment methods.

How retailers can appeal to Chinese tourists

According to Ctrip, in 2018, Thailand, Japan, and Hong Kong became the main destinations for tourists from China, followed by Vietnam, Singapore, Taiwan, South Korea, Indonesia, Malaysia, USA, Russia, Cambodia, Italy, Australia, Canada, and Turkey.

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Chinese tourism is massive, and group tours make up a third of all tourist trips from China. An important factor is the language as well as the unique payment habits of guests from Celestial Empire. In most cases, the local market of the Chinese tourists’ destination country is simply not ready to receive the Chinese tourist traffic in full, so the mass tourism and time constraints force Chinese travel companies to take control of the entire cycle of tourist trip organization. This results in closed tourist ecosystems inevitably forming in countries facing an increased interest from Chinese tourists.

One of the ways to solve this problem is the development of a friendly payment and information infrastructure for tourists from the PRC. Here are some of the recommendations for creating a favorable environment for the Chinese tourists:

  • Study the needs of the target audience and build system communications, particularly a PR company in China and local advertising in places where Chinese tourists are present (airports, airline magazines, advertising in transport),
  • Translate the website and the descriptions in the offline store into Chinese, and hire Chinese-speaking staff,
  • Provide local businesses with the most popular payment methods in China, WeChat Pay and Alipay,
  • Provide information support for merchants’ offers for customers from China as well as information for tourists via social networks about infrastructure, museums, and other attractions popular in China. In addition to the well-known Weibo, WeChat and Toutiao, you can also use Bytedance’s Douyin/TikTok video apps and Alibaba’s iQiyi.

Local companies that take these steps will reduce the need for Chinese travel companies to organize closed ecosystems. It creates a friendly infrastructure for Chinese tourists, increasing the competition between goods and services offered to guests from China as well as the overall quality of the tourist service and the image of the destination country for tourists.

Payment habits of Chinese citizens

Payment habits of Chinese citizens are unlike those of other countries. Inside mainland China, payments from bank cards have become a rarity, and cash is gradually being superseded by payments via QR codes.

QR payments are now available in many countries around the globe, but their popularity in China is unprecedented. Simplicity, convenience, security, and most importantly, a very low entry price and payment systems commission, ensured the dominance of this type of cashless payments in China.

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Payments by QR code are favored by the small and micro businesses that make up the majority of China’s retail business (over 60%). First, it saved them the expense of bank terminals; second, they could easily communicate with their customers via tools provided by the largest Chinese payment systems, WeChat Pay and Alipay.

WeChat Pay is a payment tool of the largest social network in Asia, WeChat. This social network already has more than 1.1 billion active users, and more than 800 million of them pay with WeChat Pay.

WeChat allows merchants to create official resources on the platform, issue loyalty cards and offer sale coupons. It also allows creating mini apps within WeChat that expand the functionality of the merchant’s resource to a full-fledged app that Chinese users can open without downloading, both on Android and on iOS.

Alipay occupies the second half of the cashless payments market in China, dominating the online sector as the payment system used by Alibaba and the main payment instrument of TaoBao, Alibaba’s giant domestic online retail shopping portal. Alipay app has over 600 million users. It also allows merchants to create a showcase for their stores, run advertising campaigns, arrange discount offers, and issue sale coupons.

More than payment tools: in-app digital marketing

As WeChat Pay and Alipay follow their Chinese customers around the world, Western retailers should pay attention to the marketing capabilities built into these apps. Here are some recommendations for ways Chinese-oriented brands and businesses can attract customers whose life is linked to all-in-one-app ecosystems:

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  • An official account in WeChat can be the main information channel about your products and services, sales and discounts, the location of stores and tourist information. Airlines are actively using this tool to increase the number of direct bookings on their websites. Fashion brands and department stores create vivid and attractive WeChat profile with presentations of new collections, fashion looks and hot prices.
  • Hotels, museums and other places of interest can offer local guides with must-see sights that helps attract tourists. Some museums and galleries include annotations of the exhibitions inside their WeChat and Alipay accounts. Cafes and restaurants integrate menus in Chinese into their profiles.
  • Mobile video app Tik-Tok is an especially effective marketing channel for creative businesses. For example, jewelry stores and local craft and souvenir shops publish music videos of their production process that sparks interest among foreign customers.
  • Posts in WeChat channels can be easily targeted, and a wide range of in-app advertising options are available for all budgets. Alipay’s StoreFront allows offline stores to promote their assortments and best offers, and share localized content.
  • Mini apps became a breakthrough in the promotion of tourist locations to Chinese visitors. For example, Dubai has created a mini app with all the important information about the city—transport, hotels, shopping, and food, —and incorporated all this into the most popular Asian mobile app WeChat.

New opportunities for tourist retail

WeChat and Alipay fully cover the needs of Chinese businesses, from finding a client to accepting a payment from a customer. Overseas businesses can do the same when they host Chinese tourists.

Chinese payment tools also enable merchants to promote themselves. WeChat and Alipay have extended their reach beyond China, actively developing their reach in countries popular with Chinese tourists. Yet local businesses may be unable to adapt to their rapid growth and evolution.

Chinese travel companies, seeking to fill this vacuum and satisfy the demand from their customers, create what they consider a friendly infrastructure within countries popular with their clients. But due to lack of resources and time, this often harms the image of destination countries.

Chinese businessmen are opening stores and food outlets that focus only on serving Chinese tourists. These enterprises integrate Chinese payment tools, and all their transactions are carried out within these Chinese payment systems. Guide services are provided not by professional guides and interpreters, but by local Chinese people who seek to fill the void of experienced local personnel.

As a result, many local businesses and tourist retailers miss out on potential revenue because they are unfamiliar with the nuances of catering to Chinese tourists. Local players can profit by attracting Chinese buyers, either independently or by partnering with an expert ready to help with integration with Chinese payment systems and promotions via WeChat and Alipay. Yandex.Checkout has seen Russian merchants that have taken these steps are able to effectively compete with the closed system of Chinese tourism in Russia and significantly increase profits and turnover.

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Yandex.Checkout is an online payment service provided by Yandex.Money, a Russian payments-processing firm.

 

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