Brilliant presentation on the luxury Chinese tourism market by Roy Graff, accomplished Business Development and Marketing specialist with a focus on travel, hospitality and Chinese culture.

1. China Edge
Plan. Engage. Deliver.
© China Edge Limited, 2013
China Market Services
for Luxury Retail & Hospitality

2. China Edge Company Vision & Team
© China Edge Limited, 2013
China Edge is a collaboration of sector experts with a
wealth of experience in China that brings you the
knowledge of how to target, engage and retain wealthy
customers from China.
China Edge brings the luxury retail, hospitality and travel
industries best practices from across the globe, provides
strategic and tactical recommendations, insights into the
behaviour, aspirations and preferences of high net worth
(HNW) Chinese consumers.

3. The China Edge Team
Jeremy @ChinaBlogTweets
Strategy and Risk Management
Michaela @wolfmichaela
Luxury & Retail Marketing
© China Edge Limited, 2013
Roy @roygraff
Outbound Engagement
Yuyu @yuyumedia
Cultural Training
Arnold @RealArnoldMa
Digital Engagement
@chinaedge

4. UK Visa Rules for Chinese Citizens
“If the visa process were streamlined it could boost the economy by
£1.2bn […] Meanwhile, the Bond Street Association has signed up to
a “China-ready” workshop series devised by China Edge to help
retailers offer Chinese-friendly luxury shopping”
(Financial Times, January 19th, 2014)
© China Edge Limited, 2013
“Attracting Chinese shoppers is not just about footfall and revenues,”
“It can boost a brand’s value, whether it is fundraising, or preparing for
an IPO or ... sale”
- Jeremy Gordon, director of China Edge. Financial Times, 19 Jan 2014

5. New Identity of Chinese Luxury Consumers
“ The China Luxury Downturn Is Real - Global Luxury
Brands Must Adjust”
(Forbes, January 17th, 2014)
© China Edge Limited, 2013
“The intense competition among established and new entrants to the
Chinese luxury market” has affected growth for established brands and
that “the growth of e-commerce has driven prices and value down for many
of the previously highly desirable brands”
“ Brands must better manage a global inventory and sales system that
understands how Chinese approach luxury purchasing. The Chinese
customer is now global”
- Roy Graff, director of China Edge. Forbes, 17 Jan 2014

6. © China Edge Limited, 2013
The China Opportunity

7. • 60% of luxury spend is offshore
• Consumers driven by experience,
exclusivity, gifting – not just savings / duty-free
• Millionaires & middle classes drive growth
• Trends incl. anti-corruption (short-term, targeted impact);
urbanisation (long-term, wide impact)
• Chinese travel is taking off
© China Edge Limited, 2013
• 97 million outbound trips in 2013, £80+ bn spend; 100m by 2014
• Top 10% spend over £6,500 per trip
Image: J. Gordon
Global Consumers

8. • Be relevant & localise
• But no dragons required!
• Multiple options for entry / engagement
• Be buzzy for branding
• Social media is mainstream & essential
• Be online for consumer research
© China Edge Limited, 2013
• In Chinese, on Baidu
• Be welcoming
• China-friendly service & payments
Image: J. Gordon
Engage & Serve

9. Challenges
• Intellectual property
• Register wide & early
• Monitor & enforce – protection is possible
• Culture & Crisis
• Understand & adapt to sensitivities
Image: Weibo; Business Insider
• Don‟t “hurt the feelings…” (like Zadig & Voltaire)
© China Edge Limited, 2013
• Is China a cost or investment?
• Tailor strategy to resource constraints
• What‟s the cost of missing China?

10. • Strategy
• Short & long-term
• Start at home & develop into China
• Marketing
• Proactive, in-market multiplier & consumer
targeting
© China Edge Limited, 2013
• Leads to home & away sales
• Service
• Culture, language, information
• Promotions, payments & privileges
Image: J. Gordon
China Edge Toolkit

11. Who are the HNW Chinese?
• Young
• 73% of luxury consumers are under 45
• Average age of a millionaire is 37 (vs. 57 in U.S.)
• New
• 1st-time buyers accounted for 67% of the luxury growth
• Majority from 2nd & 3rd tier cities
• Brand conscious
• Brand is #1 driver of luxury experiences
© China Edge Limited, 2013
• Key Segments
•
•
•
•
•
•
Modern Business Owners
International Professionals
Nouveau Riche
Second Generation Rich
Delegations and Officials
Traditional Business Elites

12. Where are Chinese HNWI from?
Modern Business Owners
International Professionals
Nouveau Riche
Traditional Business Elites
Second Generation Rich
© China Edge Limited, 2013
Government Officials
Taiwan
Hong Kong

13. What Motivates HNW Chinese?
• Sense of self
• Luxury consumption helps show that one has „arrived‟
• Traditional culture of Face is central to this feeling
•
Drivers
• Extend Business / Asset Portfolio
• Education for Self / Children
© China Edge Limited, 2013
• Relaxation or Adventure
• Shopping for Self / Gifting
• Health and Beauty

14. Catering to HNW Chinese
• Respect & Understanding
• Overcome instinctive distrust
• Engage at a personal level
• Learn to see beyond the clichés
• Key Issues
• Information
© China Edge Limited, 2013
• Trust
• Loyalty
• Cultural Understanding
• Food

15. Reaching HNW Chinese
• Have a multi-channel strategy and marketing plan
• To push demand & ensure appropriate distribution
• Localise wisely with bespoke content
• Not simply translation – And protect your brand well
• Have a clear focus of your target market
• As China is too big and complex to cover it all
© China Edge Limited, 2013
• Where?
• In the UK
• Chinese Travel Trade
• Chinese Media
• Digital Marketing
• Social Media

16. Millionaires Online
When they are not
on social media
sites they are on
news portals
© China Edge Limited, 2013
• 63% prefer Sina
• 35% prefer Sohu
• 83% of Chinese millionaires use the internet daily
• They frequently engage & curate content on social
media

17. Online Engagement
© China Edge Limited, 2013
China boasts the
highest social and
ecommerce
engagement of
any country
The social media
landscape is highly
segmented with
niche platforms for
specific audiences

18. Organic and Paid Social
Weibo has many paid
options
Reach 100% of your fans
with Weibo‟s new promoted
posts
© China Edge Limited, 2013
Weibo is not the
Chinese Twitter
• It has a mix of
functionalities
from both
platforms
Great for competitions or
events

19. Organic and Paid Search
Browsing habits of Chinese
audiences are fundamentally
different
• Don‟t need an overly simplified
customer journey
• More willing to find the information
they need
© China Edge Limited, 2013
Google
Baidu
Baidu BrandZone is a
powerful tool but can
be expensive

20. China Edge Ltd.
Plan. Engage. Deliver.
China Market Services
for Luxury Retail & Hospitality
© China Edge Limited, 2013
www.chinaedge.co.uk
@chinaedge
info@chinaedge.co.uk