During last week’s event Winning WeChat Strategies to Reach the Global Chinese Consumer, speakers from Tencent, Shiseido, MGM Resorts International, and Chatly shared their recommendations for reaching two important consumer groups: Chinese outbound travelers and local Chinese consumers.
The Market Opportunity
According to Tencent, for international brands based in the US, Chinese consumers represent three high value opportunities globally:
- Inbound - Reaching consumers in Mainland China
- Outbound - Reaching Chinese travelers coming to the U.S.
- Local - Reaching local Chinese residents living in the U.S. such as international students and young professionals
While the inbound segment is the largest (in 2018 China retail sales of consumer goods reached $5.6 trillion USD), all event participants agreed that the other two segments should not be overlooked.
Chinese tourists are an undeniable opportunity for MGM Resorts in Las Vegas. In 2018, there were 3 million Chinese tourist trips made to the US and while places like NYC and Los Angeles are on travelers’ must-see list, so is Las Vegas.
According to Eric Chung, Executive Director, Sales Strategy & Strategic Partnerships MGM Resorts International, 8 out of 10 Chinese travelers who visit the U.S. will visit Las Vegas during their trip.
And he doesn’t expect to see that ratio declining any time soon, citing a study that reported only 5% of Chinese citizens had passports in 2015, and this number was expected to reach the teens by 2020 and continue to grow. The prediction appears to be coming true, with 10% of Chinese citizens holding passports as of 2018.
What’s more, Chinese travelers have the highest average spend out of all international travelers visiting the U.S., at a combined total of $36.4 billion USD in 2018.
Moderator Lauren Hallanan (right) interviewed Jennifer Coppolino and Eric Chung about their brand’s experiences reaching Chinese travelers and local Chinese consumers.
This spend is what MGM is focused on. For MGM it is not about attracting the Chinese traveler, they are already there, it's about finding ways to entice them to stay on MGM properties and increase their spending, not only at the hotels and casinos, but at MGM’s numerous restaurants, shows, luxury boutiques, etc.
And that’s where WeChat comes into play. But first, what about the local Chinese consumer?
The Power of Local Chinese Consumers
Currently there are over 5 million local Chinese residents in the U.S. and a growing number of brands are realizing the power of this consumer segment. One of those brands is Shiseido-owned Clé de Peau Beauté.
During the event, Jennifer Coppolino, Director of Consumer Engagement and Insights at Clé de Peau Beauté, shared how the brand discovered just how important this consumer is.
Coppolino shared that Clé de Peau has a very small market share in the U.S. but is top-ranked brand in China. About three years ago the brand decided to analyze their direct to consumer e-commerce business here in the U.S. and what they found surprised them.
For brick and mortar Clé de Peau’s main geographic presence is on the coasts and in Texas, but when it came to e-commerce they discovered strong sales in obscure markets in the middle of the country. Diving deeper they realized these sales could be directly attributed to Chinese students on university campuses.
Coppolino shared how Clé de Peau discovered the importance of the local Chinese consumer in the U.S.
This was eye-opening for the brand and they decided to research further. There wasn’t any relevant third-party research available so they began to do first party research, traveling to several of these key university campuses and inviting about 20 of these customers to attend activation parties where they could learn more about Clé de Peau and try out products.
During the activations Clé de Peau also surveyed these customers to find out how they first learned about the brand, what they liked about it, and why they were still interested in it when here in the US. While they learned a lot from the survey questions, Coppolino shared that they also were able to learn a great deal simply from observing who these customers were - how they dressed, their personalities, etc., which felt quite different from the average U.S. university student.
This research changed their entire marketing strategy, “Before we had these insights we were very strong minded in how we wanted our brand to be perceived by our consumers, versus listening to how they wanted the brand to be portrayed to them and what they would react to and then tweaking our marketing to fit that” said Coppolino.
The Role of WeChat
“WeChat is the most popular chat app in Asia and second largest chat app in the world. Any Chinese traveler visiting the U.S. is going to have WeChat. It’s not a question of penetration rate, they are for sure going to have it,” said Chatly Co-founder Jeff Fish.
He went on, “WeChat is no longer just marketing, you can have a sales solution, commerce solution, customer service solution - every touchpoint in a Chinese consumer’s life can be touched through WeChat. The WeChat Official Account used to be the center and your brand’s most important brand presence on WeChat, but now it is more of a hub and spoke model with the Official Account as the hub linking out to multiple mini programs providing a variety of services.”
Chatly Co-founder Jeff Fish explaining the different WeChat account types.
Reaching the Consumer
When it comes to reaching niche segments such as travelers or local consumers, Tencent advertising is one of the best ways to do that.
Kimberly Lee, Associate Director, Tencent International Business Group explained that Tencent is able to use data to predict when a user has the intent to travel to the US and then they are able to know when the traveler has reached the U.S. via IP targeting. This allows them to serve the user different ads during each stage of the consumer journey.
For example, the ad seen in China can drive the user to collect a coupon and then when they have arrived in the U.S. they will see an ad driving them in-store where they can redeem the coupon.
Kimberly Lee, Associate Director, Tencent International Business Group gave an overview of Tencent Ads.
However, not all brands can take advantage of this as certain industries, such as gaming, are barred from advertising on Tencent. Therefore MGM must focus on organic user acquisition instead. Chung shared that they have strategically placed QR codes linked to their WeChat Official Account in high foot traffic areas throughout their properties and in some cases visitors can gain access to exclusive offers and promotions by following the account.
They have also incorporated WeChat Pay throughout their properties to enable a frictionless payment process.
Distinct Regional Strategies
Clé de Peau is also using WeChat, with multiple regional accounts whose strategies are tailored to local consumers. While there are many advantages to having different markets operate independently of each other, the different offices have to be cautious.
“The major difference is that we often launch products sooner here in the U.S. so we want to notify the traveling consumer that we have this item that's not yet available back in China, but we have to do so without stepping on the toes of our team in the mainland,” said Coppolino.
In addition to operating an Official Account, Clé de Peau has also taught their sales associates in the U.S. how to use WeChat for clienteling.
Engage, Retain, and Convert
Once a consumer has followed your brand’s WeChat account, it's important to continuously provide them with relevant information. What will be of interest to a traveler will be different than a local consumer.
Fish explained that one way to do this is with what is called a 48-hour journey, a sequence of messages that allow the brand to immediately engage new followers and start gathering data which can then be used to segment the user and retarget them with relevant content.
What’s more, many brands are unaware that they can create persona-driven menus on WeChat Official Accounts and mini programs. This means users will see different versions of the menu based on locations and behaviors, for example a traveler in NYC vs. college student at NYU or a loyalty member vs. non-loyalty member.
Outbound travelers and local Chinese residents are two key Chinese consumer segments that brands in the U.S. should be focusing on. With its extremely high penetration rate and vast functionality, WeChat is hands down one of the best tools available to reach and engage with these two niche consumer bases.