29 Aug 2016
"Getting [WeChat] right will be a game-changer."
Adele Fiene, Regional Executive ANZ
As China’s millennials (born between 1982 and 2004) continue to earn more than their older counterparts a stark change in buying behaviours is emerging, creating opportunities for many industries in regional Australia – including in the Illawarra, where I’m based.
So, who are China’s millennials? According to market research company, China Skinny, the millennial is city-based, educated and entered the workforce in a relatively well-paid role, earning three times more than those living in rural areas.
Having recently taken part in a delegation to China with 25 Australian businesses from established and emerging industries, it’s become clear to me any company looking to expand into China should consider the needs, wants and expectations of this growing consumer group.
“Millennials are looking for luxury products but most importantly experiences to match,” Senior Marketing Manager at ChinaSkinny Nadja Rauscher says. “They have access to technology and are well in-tune with the latest online shopping and social media applications.”
Chinese millennials demand strong customer service. While being online is an absolute must, given 90 per cent of millennials own a smart phone and prefer to ‘click-and-collect’, enterprises must also have accurate translations and respond to customer interactions almost instantly. When it comes to shipping there’s a need for speed and an expectation of being able to track goods at every stage.
As well as using online platforms as a means to purchase products, companies must also consider how to engage via social media.
Young millennials increasingly use blogs, social media and consumer reviews to assess brand quality.
“Ninety five per cent of Chinese consumers trust a brand more after seeing it on social media and social media drives a quarter of all e-commerce account traffic ,” Raushcer says.
When it comes to considering which social media channel to use the ubiquitous WeChat looms large.
Used by 12 million companies, hundreds of millions of consumers (including two million in Australia already), this fully integrated social platform is akin to nothing we’ve seen before.
WeChat is a ‘super app’ that allows the user to never leave the app - a bit like a social Swiss Army Knife with the features of Facebook, Twitter, LinkedIn, Instagram, WhatsApp, Skype, Amazon and Uber (plus more) all rolled-up into one.
While there are examples of Australian businesses using WeChat to market their products in China, creating an account isn’t as straight forward compared with other social channels and requires the Chinese equivalent of Australian Business Number.
Already tourism operators are realising WeChat’s potential with Las Vegas’ The LINQ Hotel offering guests the opportunity to use their account to do anything from interact with a concierge to obtain information on local attractions and activities. Getting it right will be a gamechanger.
In Australia, particularly regional Australia, our tourism industry could certainly benefit from the rise of the Chinese millennial. China was the largest contributor to our Australian tourism dollar in 2016. Chinese visitors’ total overall spend hit $A9.2 billion last year (up 11 per cent) and spent an average of $A478 per night on accommodation.
Currently more than two-thirds of international Chinese travellers are under 35 years of age. This makes understanding this demographic even more relevant to Australia’s tourism operators.
According to a 2016 Hurun report, Australia ranked the third-most popular destination for young luxury travellers, behind France and Japan respectively.
Those surveyed who had visited Australia also planned to return 3.3 times in the next three years – more frequently than any other destination. Reasons included leisure (88 per cent) and visiting friends and family, business, food and shopping, all over 20 per cent.
Looking closer to home, according to Destination NSW figures Chinese visitors to the South Coast surged 30 per cent from the year ending September 2015 to the corresponding month of 2016.
Chinese visitors now make up 9.3 per cent of all international visitors to the region, up from 7.8 per cent in 2015 but still third overall behind the UK and USA.
While these growth figures are strong, in order to fully realise the opportunity, local tourism providers need to consider whether they are catering to the millennial market by providing a luxury experience as well as taking into account the learnings around how to deal with them. Crucially they need to understand what sets Australia - and the Illawarra - apart.
It’s a point made clear by ChinaSkinny’s research which highlights Australian brands can benefit from our clean and green image. This association with wide-open spaces and fresh air are key concerns to the modern Chinese millennial. They’re highly educated and want a high-quality of life for themselves, their parents and future generations.
In fact, they are more concerned with quality of life than the slowing growth of the economy. With this changing mentality, eco-tourism or agricultural tourism is emerging as a potentially lucrative point of difference.
Building a presence and succeeding in attracting the Asian market sounds fragmented and complicated, but by cultivating relationships, growing understanding of how this demographic likes to be interacted with, we’re positioning ourselves in the top echelon of tourism destinations.
What’s on in Wollongong
For businesses in the Illawarra – and all Australian regional areas - willing to investigate, invest and evolve, the opportunities are there for the taking.
It will require a considered approach with strategy and emersion paramount to capturing the Chinese millennial market but the increasingly growing and wealthy demographic means it’s really too good of an opportunity to ignore.
Adele Fiene is a Regional Executive at ANZ
ANZ has worked with the Export Council of Australia to develop a free online tool designed to help Australian businesses plan for international growth.
Be Trade Ready allows businesses to benchmark themselves against other Australian exporters, design business plans, forecast revenue and time for ROI and calculate capital requirements to fund expansion.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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