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What makes a Chinese millennial tick? CiR research reveals key insights

CiR research shows how to be relevant to the significant Chinese millennial traveller and why travel retail must understand this vital shopper. 

At face value, it all looks pretty rosy. By 2025, Chinese tourists are going to be spending a whopping US$255.4 billion outside their home market, dwarfing the spending efforts of even US travellers¹. But it doesn’t stop there; by 2034 one in every five air travellers worldwide will be flying to, from, or within China and the bulk of them will be Millennials.

These figures might encourage brands and retailers to rest on their laurels, just waiting, tills open, for the cash to come rolling in.

But that would be a big mistake.

Counter Intelligence Retail’s (CiR) most recent research discovered that although more Chinese people are travelling - thanks to the wanderlust of the middle classes from developing cities, and their increasing wealth, education, tech-savviness and social unification - their average spend is falling.

In fact, the potential returns are there but if brands and retailers want to capitalise, it’s vital to understand the wants, behaviours and quirks of Chinese millennials.

Here are CiR’s must-know five key insights;

1. The numbers

Worldwide, today’s tech-savvy, hyper-connected 16-35 year olds already make up 50% of travellers and splash out on more than 50% of purchases in the sector. And their triggers to buy are unique and sometimes startling.

Drill this trend down to China and there are about 200 million 15-24 year olds. Compare this to the 40 million equivalent Americans and these are figures to conjure with. Chinese Millennials represent one of the biggest populations of this demographic, in fact two thirds of millennials across the world live in Asia.

2. The tech

China’s youth is very much online, keen to travel and ready to share knowledge with their ‘digital entourage’.

But their desires and behaviours are surprisingly different to their parents and sometimes different to their peers from other cultures.

They’re online for an average of 27 hours a week - more than five hours longer than their US counterparts. And that frantic online activity is, by and large, on their phones. So brands and retailers who want to reach them should create a mobile-first mindset. Sharpish. But with experience come high expectations, they demand that communications are timely and relevant and it’s critical that it works on mobile devices.

72% of millennial travellers have a Wi-Fi-enabled device with them at the airport and it’s no surprise that these are the shoppers who’ll research, chat, compare and shop online first.

Way beyond social media and a responsive website, there’s an enormous opportunity thanks to Chinese young people’s appetite for apps. Create an app that captures their imagination and you’ve landed loyalty and engagement on those all-important phones.

3. The brands

Happily for non-Chinese brands, China’s millennials have an open-minded, global outlook and shop extensively from international brands.

So much so that industry commentators have highlighted that it is “…imperative for ‘legacy’ companies to gain the loyalty of millennial consumers” such is the importance of recruiting amongst this group to harness their brand advocacy and purchasing power.

In fact, millennials in general construct their identity via brands - great for loyalty but some traditional sales techniques can backfire. Discounting, for example, can be counter-productive, literally cheapening a brand that once gave them status.

Brands and retailers must understand what floats these shoppers’ boats if they’re going to crack loyalty techniques that don’t accidentally damage emotional attachment.

4. The conversations

Millennials will click away in a heartbeat if they rub up against a corporate voice. They’re used to chatting on digital, so they lap up user-generated content, peer reviews, engaging stories and a lively approach.

On the ground, yes, it’s great to hire native speakers and allow shoppers to buy in their own currency but you’ll need to win their hearts and minds first. China Southern Airlines successfully achieved this through a relevant WeChat account that quickly offered 20 different functionalities from customer service to bookings. Swiftly followed by other domestic airlines; AirAsia, Air China and China Airlines, international carriers have followed this trend with British Airways, KLM and Air France going live on WeChat.

A sensible approach given that airline bookings made on a smartphone in China far exceeds levels seen from the same age group in other nations.

Be relevant, engage them, be seen to do good in the world and you could turn these digital natives into valuable online advocates. 

5. The trends

Overall, beware of thinking of this market as consumers. They’re looking for experiences, excitement and engagement. Each of their shopping decisions say something about themselves. Extreme targeting could be a turn-off with millennials proud to make their own decisions.

Chinese millennials are not afraid to spend on their travel experiences. They are seeking wider boundaries and new encounters. And whilst overall spend levels from Chinese travellers has fallen per head as a more austere wave approaches, they can be traded up to enhance their experience if retailers and brands communicate the right message in the right way at the right time.

Millennials are the ones setting the trends. What they do today will ripple out into the wider market tomorrow. And when you’re multiplying that up by millions on this scale, it’s definitely worthwhile making Chinese millennials your new best friends.

 

Sources: CiR data base; various studies, Millward Brown Millennials Report, www.WARC.com, GGV Capital, APEX

¹ Figures from economic forecasting firm Oxford Economics and credit card company Visa.