High spending Chinese Millennials are now the single biggest market in the World for premium watches, and nearly half a million of them visit the UK annually with the primary intention of buying what is difficult, or impossible to find at home. In the last two years spending in the UK by visitors from China has risen by 50% as the annual number of visas issued to Chinese nationals has broken the 500,000 mark, according to tax refund company Global Blue and the Home Office.
By far the dominant demographic within the Chinese tourist sector are Millennials that when abroad purposefully seek out new and unusual high quality designs to enhance their personal brand, and when they identify the qualities they seek in luxury goods they have no hesitation in buying. This makes Chinese visitors, both men and women alike, an ideal market for premium watches sellers in the UK.
Unlike previous generations of high net worth Chinese visitors, the new generation are ‘wealth inheritors’, having grown up around international brands and big names. They are now redefining luxury in China by seeking out the niche, the quirky, added value and a story behind what they purchase, advises Domenica Di Lieto, CEO of Emerging Communications, a Chinese marketing consultancy with offices in London and Shanghai.
When targeting this market there are important factors to consider. Millennials detest being treated as cash cows or consumers with ‘silly money’. They are discerning, and able to quickly distinguish between sales propositions that reflect their value and those pursuing quick fix marketing, which British brands and retailers have a reputation for.
Clumsy translations, hard sell promotions and pedantic or assuming marketing messages are among the audiences’ pet hates when it comes to communication. This normally happens when domestic UK marketing campaigns are translated and overlaid onto Chinese social media platforms. In the extreme it can be perceived as an insult on a personal level, and to China as a nation. However, those that do make a concerted effort standout significantly.
Millennials plan itineraries, including shopping, well in advance of leaving home, and they tailor make trips to enable them to visit outlets they can be confident will meet their buying requirements. Trying to win passing trade even in locations with high volumes of Chinese tourist traffic is not nearly as effective as attracting planned visits via social media.
It is difficult to over emphasise the importance of social media in all aspects of life in China. In fact, more than 50 per cent of purchases of medium and high ticket items are made as a direct result of social media recommendation. It is the most powerful tool that can be employed to drive sales, and Millennials are far from being an exception to this. In fact, it is easier to create footfall from this demographic through social media than might be imagined.
This is because an important part of the buying experience for Millennials is showing off purchases on social media. It is integral to the sectors internal rivalry to demonstrate who has made the best new discoveries. Just a handful of satisfied customers demonstrating what they have bought can drive significant store traffic.
But while peer reviews are highly effective there is something even better. Utilising Key Opinion Leaders (KOLs or Influencers) is the fastest and most reliable way to generate awareness and establish credibility among every type of Chinese consumer audience.
KOLs are social media authority figures that are respected for their knowledge and trustworthy recommendations. Premium KOLs are likely to have followers in the millions, while the niche have committed groups of fans in the hundreds of thousands. KOLs that specialise in luxury watches and shopping in the UK can be identified and targeted to promote key messages, and though they usually require payment the benefits far outweigh investment. They are essential for running successful campaigns for any type of luxury product.
An important factor for all brands and outlets operating in Chinese markets is ensuring Mandarin branding is correct. It is necessary to define your Chinese name, or one will be chosen for you, and it may be far from what years of image guardianship has achieved.
Often there is no direct translation from English to Mandarin leaving plenty of scope for slang or negative interpretation that may be impossible to correct. Therefore, it is important to select a Chinese name, and ideally licence it and register it for voluntary recordal so that it cannot be copied. The law in China, and enforcement by digital platforms, is becoming increasingly effective in preventing the rogue high-jacking of names. Once an appropriate name is established it is worth protecting.
As well as tourists, the 95,000 Chinese students studying in the UK are another good prospective market for premium watch brands and outlets. Students have large disposable incomes, but they also act as personal buying guides for wealthy relatives and friends that visit – each student in the UK will be visited an average of 3.3 times per year.
Reaching out to students and treating them as a consumer segment in their own right goes a long way to establishing a reputation that is shared across campus, and puts retailers on the shortlist of recommendations for incoming visitors.
With very few premium brands and watch outlets competing for Chinese spending in the UK, the sector presents great sales possibilities. Visitor numbers are set to grow for the foreseeable future, but the one caveat is that if they are to become a regular feature of the customer base commitment to sell to them is required. There is no place for half measures.
- Contributor: Domenica Di Lieto, Chief Executive Officer, Emerging Communications, a Chinese marketing consultancy with offices in London and Shanghai.