Why do Western Brands Fail in China?
China is not Australia, and nor is it America, Britain, Europe, or even Hong Kong….
By Julie Sand
In China, holidays are enjoyed much like any other country – spent with family, eating out, shopping online and travelling the world. However, employees do not choose when to take their holidays but instead, they are dictated by the national closure of businesses during these periods. Among many other national holidays, the Chinese New Year and Chinese National Day (which extends into Golden Week) present limitless opportunities for UK businesses looking to tap into the Chinese market.
When it comes to holiday travel – and given the increased disposable income and affluent mentality of the Chinese – Europe is at the top of their priorities. According to Visit Britain, in 2017 nearly 60 million outbound trips were made from China; of which 391,000 were to the UK. Chinese tourists are spending an average of £1,678 when they’re in the UK – with 25% of their money being spent on shopping, 19% on accommodation and 16% on dining (4).
Chinese New Year
Chinese New Year, also known as Spring Festival, is the biggest and longest holiday in China with celebrations lasting up to 15 days. 3 million people are known to be on the move every year to spend this special holiday with their families. Gift-giving is a big tradition during Chinese New Year, elders will give their children and grandchildren money in small red envelopes known as ‘hóngbāos’ or sent through WeChat following the digital revolution in China.
Leading up to Chinese New Year, Chinese shoppers rush the streets and spend a great deal of their time buying new clothes, cooking supplies, gifts and much more to be worn and used during the new year – which is symbolic of a new start and fresh hopes. All retailers offer discounts and sales to attract shoppers into their stores. This presents a great opportunity for British brands to tap into.
China’s National Day falls on the 1st October every year to commemorate the founding of People’s Republic of China in 1949. The holiday has been named Golden Week with a week of celebrations as it is the second largest week of tourism in China after Chinese New Year. During Chinese New Year, citizens often stay within China and visit their relatives in their local villages, however during Golden Week, the Chinese prefer to travel overseas. Back in 2017, Chinese shoppers in the UK spent an astounding £25 million throughout Golden Week. On top of this, flight bookings from September to November were also up 10% in 2017, due to the strong value of the Chinese renminbi to sterling – Chinese shoppers are drawn to the attractive prices in the UK.
China celebrates Single’s Day on 11th November, with the sequence of 1’s symbolising being single. This anti-Valentine’s Day has broken all worldwide records of the biggest shopping day. In 2018, it took less than 24-hours for the gross merchandise value (GMV) to hit over $30.8 billion in sales. Even more impressive is the fact that within the first minute and 25 seconds, $1 billion had already been spent by the Chinese (1).
The event is over 4 times bigger than America’s Black Friday (2) and cannot even be compared to Black Friday in the UK – which saw sales hit £2.44 billion last year. It is no longer a day where only single people shop; it has become the biggest shopping festival in the world. Single’s Day is a classic symbol of just how unstoppable China has become.
So how do UK businesses benefit from these Chinese official and unofficial holidays?
The influx of Chinese tourists coming to the UK coupled with their increased spending power presents an immeasurable opportunity for British brands looking to tap into this market. Bicester Village – an outlet shopping centre in Oxfordshire – have nailed their China strategy and have since become the second most visited destination in the UK by Chinese tourists. Through Bicester Village’s partnership with tech giants Alipay and WeChat Pay in May 2018, they have seen Chinese tourists increase 90 times by providing Chinese mobile payments in over 300 stores within their shopping centre. Over 90% of Chinese tourists prefer to use mobile payment overseas as they see it as the safest and most convenient method to pay. Tap into China’s digital generation by providing their preferred payment methods and attract Chinese shoppers into your store.
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