The Chinese Traveller Is A Global Luxury Consumer.


Iris Chan | May 24, 2023

Credit: Upsplash

While luxury companies should prepare for the return of the Chinese luxury traveller, their greater ambition should be in leveraging Chinese digital platforms to strengthen their customer relationships, and delivering consistent and cohesive experiences to consumers in both domestic and global settings.

Since China eased its travel restrictions at the start of this year, the return of the Chinese Traveller has been on the minds of many, especially those in the global luxury industry. Indeed, given that Chinese travellers have played such a significant role in the global luxury space prior to the COVID-19 pandemic, there is no doubt that they will continue to play an important role in the post-pandemic era.

The challenge for brands is how to meet this returning audience - knowing what is different for them and how to prepare to welcome them, but after 3 years of COVID restrictions, needless to say these consumers have changed, acquired new habits, raised some of their expectations and will require a different approach altogether.

As it stands now, the current global state of digital capabilities in the global setting is not where it needs to be to meet the return of Chinese travellers. While they have been shopping for luxury domestically for the last three years, digital practices across Chinese native platforms have been further ingrained into their consumption habits.

This is not to point out dramatically different features and functions offered before COVID, but rather to emphasise that the consumer’s digital expectations in their brand experience is that much more instilled, especially when it comes to digital integrations that drive convenience and reduce friction.

From a practical standpoint, the first points for brands to address include digital capabilities that enable consumers to search for product availability, make store appointment bookings, and seamlessly pay with relevant payment integrations like WeChat Pay and Alipay.

For global brand teams and their digital practices abroad, closing the gap on how they are (or rather, how they are not) leveraging the capabilities across Chinese platforms like WeChat, RED, Dianping and others, in the global context is critical in preparing for the return of Chinese travellers.

Based on the past few years of Chinese domestic luxury consumption, it is fair to say that it will continue domestically, while we see travel retail return. However, more than before, there is a need for luxury brand teams at both global market levels and China local market level to collaborate more closely because preparing for the Chinese traveller is a reactive approach that only looks at part of a whole picture.

In order to successfully meet the Chinese consumer, whether they purchase at home or overseas, brands should address these consumer journey loops more holistically so that the catalyst to collaborate and initiate activations is not only for key travel seasons or holidays such as Labour Day in May or Golden Week in October.

Brands should think of a Chinese consumer that consumes luxury domestically, as well as during their travels abroad, as a global consumer profile for which brands should build a relationship and deliver experiences consistently across the digital spectrum.

To meet this consumer requires establishing the relevant digital infrastructure and digital operations playbook for brand team stakeholders, domestically and globally, to incentivise and empower those at their retail stores through internal department functions, enable efficiencies across markets, and direct responsibility and credit throughout the global collaborative workflow.

To do this, brand teams need to speak a common digital language.

The deepened digital experience for luxury consumers domestically as well as the lack of on-the-ground access over the years of COVID has created more figurative space between teams than there already had been.

Brands should get up to speed, if they are not already, on China digital capabilities and prioritise where the gaps lay when it comes to the Chinese traveller needs and expectations at the global and at the local levels.

Assigning responsibilities among stakeholders to implement initiatives will be tied together with setting in the right KPIs and incentives to ensure participating parties follow through. This seems rather obvious and logical, because it is.

Yet for some stakeholders, this is about budget allocations, which have historically been assigned by function (eg. CRM, Social Media, KOLs, E-Commerce, etc.) and/or by audience (eg. Travel Retail, China domestic, etc.) and for many brands this remains to be the case. It’s not simple to tease out the attributions and allocations in digital, generally, but especially in China’s digital landscape where every platform or function is muddled in with the next.

For others, this is about performance rewards, which have not been in place before. Thinking of when digital clienteling solutions were first established in China, it was a time when it did not effectively make an impact until brands implemented proper structuring and incentives to the retail staff in each store with KPIs that went beyond the physical storefront.

Addressing the Chinese traveller as a separate audience from the domestic Chinese luxury consumer means brands see two profiles, which is not a holistic view of this global luxury consumer. Keeping this in mind likely means operating in new ways for global markets, and forming more integrated workflows with the local Chinese teams, in order to meet this globally mobile audience of Chinese individuals.

Dig into more details of the latest context and challenges, and how to stimulate, service and capture this audience in the DLG Webinar Series #13: How should global brands prepare for the return of Chinese travellers? below.

China | Travel | Video