Brands need to think global to appeal to savvy Chinese consumers

As competition for customers heats up in China, foreign and local brands need to rely more heavily on marketing to mainlanders travelling overseas to build brand awareness and loyalty, and drive spending abroad and in China.

It is estimated that last year [2014], Chinese nationals made 115 million international trips, up from just 10 million in 2000. Just 5 per cent of the population hold passports and the number of overseas trips is expected to double over the next five years as China’s middle class becomes even more interested in travelling abroad.

While brands that have established a presence in China have been quick to react to the surge in overseas visits from Chinese tourists by hiring more Putonghua-speaking sales staff and stocking boutiques with products that cater to Chinese travellers, they still have not done enough to take advantage of the increasing presence of Chinese travellers overseas.

When Chinese consumers plan to shop on overseas trips, they often start with a list of brands and products compiled by themselves or friends. In the past, these lists typically included the best-known brands and products, safe choices that consumers knew from Beijing or Shanghai. Rather than paying a premium at a boutique in Shanghai, they bought on visits to Hong Kong or Paris where they could save at least 30 per cent on coveted items. This is one reason why roughly two-thirds of luxury purchases by Chinese consumers happen outside the country and why this ratio is increasing as more travel.

However, Chinese consumers are not just making obvious purchases any more. They are increasingly using overseas shopping trips as brand and product research. Brands seeking to make a connection with the next wave of Chinese consumers need to develop global marketing strategies – to introduce consumers to their brands as they travel, and to build trust with mainland consumers and prove to them that their products and designs are cutting edge.