WHEN THE DRAGONS FLY,
IT’S TIME TO IT’S TIME TO
COMMUNICATE
Luxury communication to the Chinese travelers
1
• Who are the Chinese travelers ?
2
• The 9 commandements of
communication to Chinese travelers
Luxury communication to the Chinese travelers
2
3
• The external factors contributing to
communication
WhoWho are the are the ChineseChinese travelerstravelers ? …? …
Luxury communication to the Chinese travelers
Before analysing the best ways to communicate to Chinese travelers for
a luxury brand, we need to draw an image of the Chinese travelers.a luxury brand, we need to draw an image of the Chinese travelers.
Luxury communication to the Chinese travelers
Business Trips
“Visit Friends & Relatives”
Hong Kong, Macao…
Free groups and
individual tourism
THE RISE OF CHINESE
INBOUND AND OUTBOUND
TOURISM?
1983 1997
Business Trips Hong Kong, Macao…
and neighbour
countries
individual tourism
in other countries
Luxury communication to the Chinese travelers
• 1998: South Korea
• 1999 Australia and NZ
• 2000 Japan
• 2004 France, Switzerland, Italy…
• 2005 UK and Russia
• 2007 USA
Almost all Chinese can travel but…� Strong control of travel agencies
� Many documents to get a visa:
THE RISE OF CHINESE
INBOUND AND OUTBOUND
TOURISM?
1. A name list of all the group members
2. A detailed itinerary
3. Flight reservation
4. Name of the tour leader
5. Name and contact details of the designated
partner tour operator in the visited country
6. Confirmation from the designated
partner tour operator
� For group tours, passports are kept by the guide during all the trip
Luxury communication to the Chinese travelers
7. For each member of the group: Two duly completed visa application forms
8. For each member of the group: passport
9. For each member of the group: insurance covering the journey
10.For each member of the group: Proof of financial means
11.For each member of the group: A letter of the working unit or company
12.A deposit to ensure the tourist will go back to China
An increasing number of holidays
� 29 days public holidays
THE RISE OF CHINESE
INBOUND AND OUTBOUND
TOURISM?
� 2-3 weeks additional paid holidays
� Weekend short trips developing
Luxury communication to the Chinese travelers
HOW MANY ARE THEY ?
� In 2011,
they were
around 70
milions
� And they
Luxury communication to the Chinese travelers
� And they
spent
55 billions USD
worldwide
Men (53%) and women (47%)
Middle-class to upper-class: 38%
earn more than $2,200 (monthly
household income)
WHO ARE THE
CHINESE TRAVELERS ?
household income)
All generations: 50% of all Chinese
outbound travelers are aged between
25-44yo
Luxury communication to the Chinese travelers
WHO ARE THE
CHINESE TRAVELERS ?
� Depending of their city of origin chinese travelers are more travelling or not
Luxury communication to the Chinese travelers
According to the Hurun report, these are the five main destinations for
Chinese travelers who can be potential customers for luxury brands
WHERE DO THEY FLY ?
ABROAD
13 %
Luxury communication to the Chinese travelers
1
Sources. Hurun Report 2011
13 %
12. 7 %
11.6 %
Chinese tourists in Europe are significantly outspending counterparts
from elsewhere. Average amount spent on tax-free shopping in 2010
WHERE DO THEY FLY ?
ABROAD OUTSPENDERS
Luxury communication to the Chinese travelers
According to the Hurun report, these are the five main destinations for
Chinese travelers who can be potential customers for luxury brands
WHERE DO THEY FLY ?
MAINLAND CHINA
SanyaSanya
Luxury communication to the Chinese travelers
1YunnanYunnan
Hong KongHong Kong
Sources. Hurun Report 2011
1/ - 14-day tour in Europe: England+France+Switzerland/Germany
EUROPE
A CLASSICAL TRAVEL OFFER
Starting price: RMB 16,800 yuan (2,400 USD)
2 examples of tours in Western Europe
Luxury communication to the Chinese travelers
Shopping: 60 mins for tax free shops, 150 mins for Galeries
Lafayette in Paris, 60 mins for watch shopping in Lucerne
EUROPE
A CLASSICAL TRAVEL OFFERDestinations:
Day 1: Beijing-London
Day 2: London
Day 3: London-Oxford-London
Day 4: London-Paris (by train)
Day 5: Paris
Day 6: Paris
Day 7: Paris-Dijon
Luxury communication to the Chinese travelers
Day 7: Paris-Dijon
Day 8: Dijon-Geneva
Day 9: Genève-Lucerne
(watch shopping)
Day 10: Lucerne-Fussen
Day 11: Fussen-Munich
Day 12: Munich-Frankfurt
Day 13: Frankfurt-Beijing
Day 14: Beijing
Other: Chinese lunches and dinners
2/ - 9-day tour in France: Paris + Riviera
EUROPE
A CLASSICAL TRAVEL OFFER
Starting price: RMB 15,300 yuan (about 2,200 USD)
+ optional charged visit
Day 1: Shanghai-Paris (by air)
Day 2: Paris-Nice (by air)-Monaco-
Cannes (by bus)-Marseille (by bus)
Day 3: Marseille-Aix-Arles-Avignon (all by bus)
Day 4: Avignon-Lyon (by bus)
Luxury communication to the Chinese travelers
Day 4: Avignon-Lyon (by bus)
Day 5: Lyon
Day 6: Lyon-Paris (by bus)
Arc de Triomphe-Chams-Elysees-
Place Concorde-Notre Dame de Paris
Shopping:Galeries Lafayette
Day 7: Paris (by bus)
Louvre (2h)-La Tour Eiffel (2h)-Free walk in Place Opéra (4h)
Day 8: Paris-Shanghai (by air)
Day 9: Shanghai
WHAT TO THEY BUY
ON A TRIP?
Luxury communication to the Chinese travelers
They are more buying expensive products abroad as they can get tax rebate and alsobecause they can find other products lines. They buy products on which the brand country
price index is lower than in China.
THEY SHOP MORE
EXPENSIVELY� Spending average in € on all products in Rue Saint Honoré, place
Vendôme and Rue de la Paix - 2009
Luxury communication to the Chinese travelers
THEY SHOP ALL YEAR LONG…
BUT WITH TWO PEAKS� Seasonality of chinese spending on watches and jewellery in France - FY10
Luxury communication to the Chinese travelers
THEIR EXPECTATIONS
AND MOTIVATIONS
Source: Mc Kinsey 2011 Report - Wealthy Chinese customers survey
Luxury communication to the Chinese travelers
THEIR EXPECTATIONS
AND MOTIVATIONSPrice is the Key – the example of a simple Rolex Datejust – steel
Local price
CNY 35 100
EUR 2 871
Index
100
75
Savings
- 25 %
Luxury communication to the Chinese travelers
EUR 2 871
CHF 4 089
USD 4 573
HKD 31 000
JPY 410 000
AED 15 840
75
74
89
78
85
84
- 25 %
-26 %
- 11 %
- 22 %
- 15 %
- 16 %
THEIR EXPECTATIONS
AND MOTIVATIONSPrice is the Key – the example of a complicated Patek Philippe
Local price
CNY 371 900
EUR 23 750
Index
100
58
Savings
CNY 155 131
Luxury communication to the Chinese travelers
EUR 23 750
CHF 34 653
USD 44 203
HKD 291 500
JPY 3 820 000
AED 126 140
58
59
81
69
74
63
CNY 155 131
CNY 153 833
CNY 70 123
CNY 115 521
CNY 95 152
CNY 137 440
THEIR EXPECTATIONS
AND MOTIVATIONS
Outside
China
(56 %)
Others
Aspired to be VIP
Better
Shopping
Frequent oversea
trips
Better shopping
experience
Lack of
discount
Luxury communication to the Chinese travelers
In China
(44%)
Shopping
Experience
Better size availability
Access to After-sales
services
Impulse buy(can’t wait)
discount
outlet in china
Better
availability for
new products
Broduct product
selection
Lower price
New expectations are arising among the richest travellers…
o Superior Service
o More qualitative shopping experience
o A story to tell once back home
THEIR EXPECTATIONS
AND MOTIVATIONS
… that tend to favour brand’s boutiques
Luxury communication to the Chinese travelers
Chinese consumers are increasingly able to travel thanks to reducedrestrictions and the appreciation of renminbi
Among those consumers that have traveled overseas, ninety percent buy luxury good, with almost half either specifically saving money or planning their intended purchases price to their departure.
TRENDS TO REMEMBER
planning their intended purchases price to their departure.
Over half of travelers will buy luxury goods as gifts for others whentravelling.91 % increase in chinese travelers spendingIn 2010, 90% of millionaires traveled abroad.The average number of people traveling together was four and more than half traveled with family.
Luxury communication to the Chinese travelers
The 9 commandements of The 9 commandements of luxuryluxury communicationcommunication
to to ChineseChinese travelerstravelers ……
Luxury communication to the Chinese travelers
1.1. GetGet themthem fromfrom the the beginningbeginning to the endto the end2.2. FindFind an efficient marketing and communication mixan efficient marketing and communication mix3.3. FollowFollow the four the four stepssteps of the of the processprocess4.4. Use the power of Use the power of advertadvert boardsboards5.5. Use the power of Use the power of inflightinflight and and traveltravel magazinesmagazines6.6. Target affluent Target affluent consumersconsumers throughthrough traveller’s clubtraveller’s club6.6. Target affluent Target affluent consumersconsumers throughthrough traveller’s clubtraveller’s club7.7. Target Target consumersconsumers throughthrough travelerstravelers websitewebsite8.8. AwardAward themthem withwith prestigiousprestigious experienceexperience relatedrelated to to
youryour brandbrand9.9. Use the guide business for direct communicationUse the guide business for direct communication
Luxury communication to the Chinese travelers
The aim in China is to increase fidelity from the customersThis is the reason why the customer must be exposed to the communication of a brand as much as possible following this motto.
CATCH ME
BEFORE,
GET THEM FROM THE
BEGINNING TO THE END
BEFORE, DURING
& ON-SITE
Luxury communication to the Chinese travelers
FIND AN EFFICIENT
MARKETING MIX
Luxury communication to the Chinese travelers
Price of main
adverts means for
the luxury brands
in China
Cost per head
Developawareness in
China
Communicate on your brand
during the full trip
Attract them and be sure they go and talk about
your stores
Offer the right boutique
experience so thatthey will talk about you back in China
FOLLOW THE FOUR STEPS
OF AN EFFICIENT TRAVELERS
COMMUNICATION?
trip your stores you back in China
Luxury communication to the Chinese travelers
DEVELOP THEIR
AWARENESS IN CHINA
Luxury communication to the Chinese travelers
� Internet and social media are key tools to prepare their trip…
… and very often define a precise shopping list
USE YOUR INTERNET WEBSITE
TO HELP THEM PREPARE
THEIR SHOPPING LIST
As Chinese travelers are willing to buy the newest products abroad to not hesitate to put forward
your newest products on your corporate websites
Luxury communication to the Chinese travelers
The most efficient way for a brand is to use two types of boards:
-Local in-city boards on the road to airport
- airport city boards from the beginning to the end of their trips
Local inLocal in--city boardscity boards
-Vibrant cities like Shanghai, Beijing and Guangzhou offer highly creative outdoor media and
USE THE POWER
OF ADVERT BOARDS (1/6)
-Vibrant cities like Shanghai, Beijing and Guangzhou offer highly creative outdoor media and
boards
- Advertisements on large LED screens and street furniture (privileged spaces)
- Special luxury streets boards can be also efficient such as Nanjing Lu in Shanghai
- Particularly adapted to promote luxury brands
- Efficient in the biggest cities and in targeted areas
The aim is :
⇒to build creative campaigns on a targeted area
⇒mixing several outdoor media, and focusing on precise consumers groups.
⇒ strategic periods of the year must be chosen when Chinese tourists plan their holidays and are
eager to explore new exciting destinations.
Luxury communication to the Chinese travelers
Airports ad boardsAirports ad boards
- Premium positionning advert (JCDecaux 2010 study)
- It creates a more modern and international status for the brand
- Passengers are highly driven in the Chinese airports
Dued to authority will to regulate and prevent any danger
USE THE POWER
OF ADVERT BOARDS
(2/6)
Dued to authority will to regulate and prevent any danger
-Advertising points in airports are highly strategic
=> 41% of airport passengers look at airport ads in China
- Airports boards opportunity
- More numerous than in Europe
- Bigger than in Europe dued to no restrictions on sizes
and to bigger spaces in the airports than in Europe
Luxury communication to the Chinese travelers
Have the recent Chinese Government restrictions
on advertising of luxury affected the way foreign
luxury brands advertise in China?
Yes, they advertise even more !!!
USE THE POWER
OF ADVERT BOARDS
(3/6)
Yes, they advertise even more !!!
-The government restrictions aimed at some inappropriate wording
- Only for some local brands or real-estate companies in China that promoted some kind of
luxury or hedonistic spirit that the government doesn’t really like.
- The restrictions don’t apply to the established luxury brands from overseas
⇒ They use creative visuals and logos in their ads.
⇒ The only limits on these brands concerns the sexiness of some visuals that may have a
hard time to get approved by the censorship bureau.
Luxury communication to the Chinese travelers
The Little Fagguoren who became the Xiongmao
of outdoor advertising in China
In 2005, French outdoor advertising giant JCDecaux, which ranks world No.1 in airport
advertising, started its business in China with the establishment of JCDecaux Momentum
USE THE POWER
OF ADVERT BOARDS
(4/6)
advertising, started its business in China with the establishment of JCDecaux Momentum
Shanghai Airports Advertising Co. Ltd., providing exclusive high-profile media portfolio with
impressive visual impact at strategic locations, to reach target audience and enhance brand
image efficiently and effectively.
We are now operating Shanghai Pudong International Airport, Shanghai Hongqiao
International Airport, major part of Beijing Capital International Airport and Qingdao Liuting
International Airport.
To seize vast branding opportunities in 2010 World Expo, Decaux presented the advertisers
with unparalleled media solutions in the brand-new Terminal 2 of Hongqiao International
Airport, which is one of the most promising air hubs in Asia-pacific region.
Luxury communication to the Chinese travelers
� JCDecaux Momentum Shanghai Airport Advertising and Nielsen, a worldwide leader in
measurement and information, have been working together to conduct a 360 degree
comprehensive passenger survey. In terms of face-to-face interviews, 2,200 interviews
were completed for the short questionnaire and 1,200 interviews for the long
questionnaire, with a further 100 completed online by VIP lounge users in just four
weeks in June 2011.
�
USE THE POWER
OF ADVERT BOARDS (5/6)
�
� The survey was carried out in Pudong International Airport and Hongqiao International
Airport to get the profile of airport passengers and get a comprehensive understanding
of passenger purchase behaviour (brands insight)
� The main findings of the survey can be placed into the following categories; airport
media benefits, Shanghai airport media benefits and passenger profiling.
Luxury communication to the Chinese travelers
Shanghai airports : a real costly but effective advertising opportunity to
catch Chinese luxury travelers
� Shanghai airports were voted as the best in mainland China.
Shanghai airports are leading the market in terms of significant attributes such as "modern, service oriented, international and harmonious".
� Nearly 90% of passengers have seen an advertisement in Shanghai Airports.
USE THE POWER
OF ADVERT BOARDS (6/6)
� Nearly 90% of passengers have seen an advertisement in Shanghai Airports.
This figure is astonishing and when combined with the fact that the Shanghai Airport environment provides a captive setting to passengers for an average time of 2 hours 22 minutes, it comes as no surprise!
� 1 out of 2 passengers are from an affluent and upper-middle class household
with an annual household income of RMB 180,000 and higher, double that of the general Shanghai population (RMB 84,000). For every 1 out of 3 passengers, the amount is RMB 360,000- among the richest in China.
This shows that Shanghai airports provide the best environment to capture those high-spending consumers.
Luxury communication to the Chinese travelers
-A determined budget must be fixed
- A highly targeted list of websites and blogs has to be created
The aim is to :
TARGET CONSUMERS
THROUGH TRAVELER’S
WEBSITES
The aim is to :
⇒ adjust your budget for a maximum ROI.
⇒ impact on Chinese travelers
⇒ build and implement successful advertisement campaigns in the most popular travel and
tourism websites viewed by millions of Chinese travelers preparing for their next trip abroad.
=> Communicate to prepare their purchases abroad=> Communicate to prepare their purchases abroad
Luxury communication to the Chinese travelers
These two types of magazines are efficient for a brand as the potential target
prepare their stay before flying and as they spend at least 10 hours in flight to go to Europe.
The aim is to :
⇒ adjust your budget for a maximum ROI.
⇒ impact on Chinese travelers
USE THE POWER
OF INFLIGHT MAGAZINES
AND TRAVEL MAGAZINES (1/3)
⇒ impact on Chinese travelers
⇒ build and implement successful advertisement campaigns in the most popular travel and
tourism websites viewed by millions of Chinese travelers preparing for their next trip abroad.
For example, the most powerful magazines inflight magazines are the magazines from:
Chinese airlines And other nations airlines
Luxury communication to the Chinese travelers
USE THE POWER
OF INFLIGHT MAGAZINES
AND TRAVEL MAGAZINES (2/3)The impact of these magazine and the way its influences Chinese travelers consumers
- An inflight magazine is read at least
twice during a flight
Luxury communication to the Chinese travelers
-There is no real interference as
the consumer is not given too many
ads and information.
-Enclosed indoor space pushes
the consumer to read it
USE THE POWER
OF INFLIGHT MAGAZINES
AND TRAVEL MAGAZINES (3/3)Example or a lifestyle travel magazine in China : efficiency for a maximum ROI
Life Elements
Effective communication channel between the brands and the readers
Columns: international, Auto, Design, Lifestyle, Culture
Luxury communication to the Chinese travelers
Columns: international, Auto, Design, Lifestyle, Culture
Mainly distributed in specific points in Beijing, Shanghai, Guangzhou
-Golf Clubs
- 5-star hotels
- Clubhouses
- Foreign embassies and foreign commerce chambers
Readers:
- 50 % in high class residential areas
- 20 % in commercial areas eg A-Class commercial building
- 20 % free subscriptions in business suites of hotels and golf clubs
The Shanghai Travelers’s Club is certainly the most prestigious luxury travel club in China.
3,000 members : all affluent Chinese frequent travelers
This club is the ideal place to build the reputation of a brand.
Club linked with the local Shanghaiese communist party section.
TARGET AFFLUENT
CONSUMERS
THROUGH TRAVELER’S CLUBS
Efficient and highly targeted communication means :
- Newsletter trough articles - Shanghai traveler’s magazine
- Sponsoring traveler’s club events
=> increase brand awareness and relationship with customers to sell them => increase brand awareness and relationship with customers to sell them
high price goodshigh price goods
The Club has the right to select the sponsors according to its standards of luxury and excellence in
travel services.
Such clubs are existing all over China but this club is one of the most efficient
for communication to high-income luxury consumers and travelers.
Luxury communication to the Chinese travelers
- Reserving the Chinese customers a unique sponsored experience onsite could be a tremendous idea
to create new means of communication of a brand to luxury travelers.
-Example: the Coco Chanel experience at the Ritz Hotel organized by Chanel
AWARD THEM OF UNIQUE
PRESTIGIOUS EXPERIENCES
RELATED TO YOUR BRAND (1/2)
-The first of these 'Once in a lifetime' travel collections
by Leading Hotel of the World and a brand is an opulent 3-day jaunt to Paris
where guests can enjoy three nights of exceptional luxury in the legendary "Coco Chanel Suite" at the
Ritz Paris. Shanghai Travelers' Club members will also receive special gifts from Chanel.
Still complete with the legendary designer's own furniture including original rare Coromandel screens
and magnificent art and antique pieces, as well as views of the city's famous Place Vendôme, the Coco
Chanel Suite is the pinnacle of prestige in the City of Lights. Part of the programme will also include a
private tour of Mme Chanel's private apartments on Rue Cambon and the Chanel store on Place
Vendôme.
Luxury communication to the Chinese travelers
The aim is to :
⇒ co-brand a unique experience paid by the customer
⇒ Increase customer’s history knowledge
⇒ Increase quality image to the customers
⇒ Increase brand attraction by word to mouth. (high efficient mean)
AWARD THEM OF UNIQUE
PRESTIGIOUS EXPERIENCES
RELATED TO YOUR BRAND (2/2)
⇒ Increase brand attraction by word to mouth. (high efficient mean)
⇒ Create the perfect atmosphere for high luxury sales
⇒Create buzz around the experience in the Chinese high society
⇒⇒Communicate to impact the increase the quality image, increase customers’ Communicate to impact the increase the quality image, increase customers’
knowledge and make the most of the experience in term of salesknowledge and make the most of the experience in term of sales
Other example: Luxury watches brands communicate also with highly private Manufacture’s Visit in
Switzerland to their best potential Chinese customers.
Luxury communication to the Chinese travelers
� Multiple task: tourist guide,
translator, negotiator, shopping adviser…
� They meet with the need for reassurance
USE THE GUIDES BUSINESS
IMPACT ON COMMUNICATION
(1/2)
� They meet with the need for reassurance
� A strong influence on the selection
of places of shopping
Luxury communication to the Chinese travelers
► Globally, they tend to act as a brake to
the increasing freedom of Chinese tourists.
� The fee system
USE THE GUIDES BUSINESS
IMPACT ON COMMUNICATION
(2/2)
Luxury communication to the Chinese travelers
“OFFICIAL” CONTRACTS
Fee from the department store:
- Travel agency: 5 to 15%
- Guide: 10%
Fee from the brand (not systematic)
-Guide: 3 to 5%
Dedicated interlocutor
OCCASIONAL FEES
Guides are treated
like Hotel Concierge
or Drivers: 3 to 5%
Individual relationships between sales
associates and guides
The The externalexternal factorsfactors contributingcontributing to communication …to communication …
Luxury communication to the Chinese travelers
Luxury travelers have less and less time to spend in airports
Less time during the stop overs
Less time in the shop
This is the reason why communication to luxury consumer travelling
needs to be highly efficient.
THE IMPACT OF TIME
ON COMMUNICATION
needs to be highly efficient.
Short or no Slogan
Brand codes and logo are and must be highlighted
Luxury communication to the Chinese travelers
ALLOW LUXURY TO EXPRESS ITSELF IN TRAVEL RETAIL
YOU WILL ENJOY THE RESULTS
Luxury communication to the Chinese travelers
THANK YOU FOR YOUR THANK YOU FOR YOUR THANK YOU FOR YOUR THANK YOU FOR YOUR THANK YOU FOR YOUR THANK YOU FOR YOUR THANK YOU FOR YOUR THANK YOU FOR YOUR
ATTENTIONATTENTIONATTENTIONATTENTIONATTENTIONATTENTIONATTENTIONATTENTION
Luxury communication to the Chinese travelers
SOURCES
Hurun Report 2010
www.ormita.hk
Luxury communication to the Chinese travelers
www.ormita.hkwww.maosuit.com
www.jcdecaux.com.cn
Richemont Marketing and Communication Conference
KPMG Studies
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