October 2018, Las Vegas
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China, a unique and rising mobile travel market
Sally White takes a look at how the Chinese marketing is evolving and finds that having local knowledge counts
Anyone looking at China’s travel business should bear one point in mind – just because it ranks as World No. 2 in terms on time spent on smartphones does not mean it is easily accessible. That time spent, says Chinese online news channel, People’s Daily, is mostly on videos, due to “lack of leisure activities”, rather than buying trips on foreign sites.
Apart from the barriers put up by local customers and government internet restrictions, many other factors make this a unique market.
Online travel leader Ctrip COO Maria Sun told Reuters that though Chinese travellers may research online, according to an international report from Worldpay merchant services and Opinium market researchers, just 25% of Chinese travellers booked through their mobiles. The bulk of Chinese traveller booking payment goes through traditional, local travel agents and tour operators, of which, the UNTO states, there are over 28,000.
Chinese travellers like to pay with their local credit cards, even when abroad
The Chinese are very happy to use mobiles and smartphones. They are, say international consultants Deloittes in a look at the Chinese market last year, the most popular means of accessing the internet. As of March 2018, around 1.47 billion subscriptions had been registered and international research group Nielsen reckons that as many as 65% of Chinese tourists have used mobiles, compared to 11% for non-Chinese tourists.
However, Chinese travellers like to pay with their local credit cards, even when abroad. A very important point for international hotels to bear in mind is, says a survey by Hotels.com and German publishers Insos, that they want accommodation that can be bought with cards familiar to them, such as UnionPay or Alipay. (Though KLM Dutch Airlines listed WeChat Pay as the choice for as much as 30% of its Chinese market.)
Making payments simple
In a “heads-up” to foreign companies trying to reach the Chinese travel market, Nielsen research shows that 91% of Chinese travellers are more willing to spend if they can use Chinese mobile payment systems.
Flashing the plastic is second nature for Chinese travellers, accustomed as they are to a market at home, which is becoming virtually cashless, says Sienna Parulis-Cook of Dragon Trail, a digital marketing specialist helping to engage with affluent outbound Chinese travellers.
WeChat pay drives repeat purchases by sending prompts about promotions
She points out that a further driver of Chinese spending on familiar mobile payment platforms are apps. Alipay’s app contains information on nearby sales promotions, makes recommendations and gives travel itineraries. WeChat pay drives repeat purchases by sending prompts about promotions.
The top reason for using mobile payments, Parulis-Cook says, is, of course, convenience (cited by 64% of respondents to the Nielsen survey) but it also removes the hassle of foreign currency. “..they don’t have to worry about exchange money, and are likely to get a better exchange rate, too,” she notes.
Outward bound and online
The vast Chinese online overseas travel market, valued at 785 billion Yuan (£92 billion) last year, continues to grow rapidly, even if at a less frenetic pace than earlier this decade. Numbers for 2017 are now put at 131 million trips, up 7%, with the International Tourism Association suggesting that Chinese travellers as a nation are the largest overseas travel spenders. Nielsen put the spend per head in 2017 at $5,565, forecasts a figure of $5,715 in 2018 and found the spending split to be 25% shopping, 19% accommodation and 16 percent dining.
An insight for the future – while 65% of Chinese travellers are currently using mobiles, 76% “hope that they will be able to use mobile payment when travelling abroad in future”, Nielsen found. (By contrast, 11% of tourists from elsewhere use their mobiles for payments.)
Once you’ve set up to accept Chinese mobile payments, be sure to make this visible to Chinese visitors with signage at the entrance…
Sienna Parulis-Cook Dragon Trail
Online booking is making ground. Digital booking numbers gained by 21% last year, according to Chinese research group iResearch, and it forecasts an 18% gain this year. The amount being spent is expected to rise by 17% in 2018 and maintain a growth rate of around 14% in coming years, until the Winter Olympics drives a fast rate in 2022.
Given this consumer preference it is not surprising that more and more major international leisure and transport groups are signing up to Chinese mobile payment platforms – IHG was an early adopter, but now they can also be used in hotels owned by Marriott, the Louvre Hotels Group, Millennium Hotels and Resorts, Centara Hotels & Resorts to pay for other services.
While it may be easy for the major groups to go direct to the platforms, smaller companies can use the services of a financial service provider or third-party agency to enrol. Some countries, Parulis-Cook adds, have multiple Chinese platform providers, which in the US, for example, include First Data, Citcon and FreedomPay.
Another of her tips: “Once you’ve set up to accept Chinese mobile payments, be sure to make this visible to Chinese visitors with signage at the entrance...” That means not just at the door, but at the payment terminal and in marketing.
Watch out for more insights into the Chinese travel market from Dragon Trail Interactive, a speaker and sponsor of the recent EyeforTravel Europe