The Retailer Spring_09.05_FA

#reinventionretail

How can UK retailers capitalise on opportunities with Chinese shoppers?

JONATHAN SMITH FOUNDER AND CEO China specialist marketing consultancy Hot Pot China

JONATHAN SMITH OF HOT POT CHINA LOOKS AT WHAT RETAILERS CAN DO WHEN IT COMES TO TARGETING MODERN CHINESE CONSUMERS When it comes to China, UK retailers are missing out, plain and simple. The opportunity is vast. Research says that China will become the world’s top retail market in 2019 and Chinese tourists and ex-pats are already the biggest spenders in Harrods. The UK is also full of Chinese students and professionals who constantly talk with their friends and family back home and are willing to buy, ship and bring them the best the Western world has to offer. That’s an incredible captive market already here. So why does this appealing audience currently tend to focus on France and Italy as their retail destinations of choice instead of Britain? Firstly, there might be an outdated perception among some UK retailers. The modern Chinese consumer is no longer represented by a fifty-something tourist looking only for glossy, logo-heavy luxury brands. Yes, they still exist, but tastes have moved on. Sophisticated shoppers are looking for something nuanced, unique and which they identify with on a personal level. That means any retailer or brand has the potential to succeed, provided it has a story to tell and offers a relevant and differentiated brand experience. If everyone in China’s vast tier 1 and 2 cities has a Louis Vuitton bag, designs by Anya Hindmarch and Sophie Hulme are likely to hold much more appeal to a sophisticated and savvy Chinese consumer. Chinese millennials and Gen-Z shoppers are a huge market, too. Unlike their older predecessors, they’ve grown up in a highly prosperous China and tend to be freer with their disposable income. They’re keen to explore the world, are less risk-averse and identify strongly with a global mindset – particularly those from the biggest Tier 1 cities: Shanghai, Beijing and Guangzhou. And so, UK retailers can roll out the red carpet for Chinese shoppers – the way Paris has done so successfully, with themed events and experiences that are both meaningful, welcoming and enticing to high-spending consumers. A key step is to understand when those shoppers are likely to visit the UK – the recent Lunar New Year was an obvious moment, but there are other holidays such as Golden Week

(October), Little Golden Week (May) and Mid-Autumn Festival (September) when travel opportunities are maximised and the opportunity with travelling Chinese shoppers will peak. Retailers could work with their existing digital channels to attract these consumers. A vital element is analysing existing data to see what Chinese shoppers are interested in, right down to the SKU level, via tax-free shopping and credit card data at physical stores plus e-commerce channels. While not optimised for Chinese traffic, most retailers are surprised what a quick check on Google Analytics can teach them about the Chinese customer base and how their existing site is performing with that audience. Additionally, social listening on relevant social channels WeChat and Weibo can give deeper insights into brand perception, category trends and even purchase intent. What brands are being talked about? Why? Should we aim to capitalise on a particular trend and stock accordingly at peak travel times? UK retailers could also do more to improve their e-commerce experience for Chinese shoppers. Translating into simplified Chinese is often seen as an expensive and time-consuming project, but it doesn’t have to be the whole website. We have seen impressive uplift with clients from simply translating core elements of a site’s navigation and/or checkout pages – increasing page views, dwell time and conversion rates. Load speeds are another issue for online retailers. Outside full hosting within the China firewall, there are a number of simple fixes to boost load speeds for Chinese traffic, with an immediate effect on conversion rates and revenue. Plus, of course, enabling China’s most popular payment options (e.g. AliPay and WeChat- Pay) is an obvious way to boost custom that many retailers have been slow to adopt. The retail industry also potentially has a lobbying role to play when it comes to attracting more Chinese shoppers to the UK. It will surprise many to learn that the UK Visa Application Form for Chinese nationals was for years only in English and has only recently become available in simplified and traditional Chinese. To compound this, the UK is not part of the Schengen Agreement, which allows Chinese travellers to access over 25 European countries on a single visa. This means travellers have to make an extra application and fee to visit the UK, with many deciding they will simply exclude it and enjoy the shopping delights of Paris or Milan instead.

10 | spring 2019 | the retailer