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China EdgePlan. Engage. Deliver.

China Market Servicesfor Luxury Retail & Hospitality

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China Edge Company Vision & Team

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.

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The China Edge Team

Jeremy @ChinaBlogTweets Strategy and Risk Management

Roy @roygraff Outbound Engagement

Arnold @RealArnoldMaDigital Engagement

Yuyu @yuyumedia Cultural Training

Michaela @wolfmichaelaLuxury & Retail Marketing

@chinaedge

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“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)

UK Visa Rules for Chinese Citizens

“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

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New Identity of Chinese Luxury Consumers

“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

“ The China Luxury Downturn Is Real - Global Luxury Brands Must Adjust”

(Forbes, January 17th, 2014)

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The China Opportunity

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• 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• 97 million outbound trips in 2013, £80+ bn spend; 100m by 2014

• Top 10% spend over £6,500 per trip

Global Consumers

Image: J. G

ordon

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• 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• In Chinese, on Baidu

• Be welcoming• China-friendly service & payments

Engage & Serve

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• Intellectual property• Register wide & early

• Monitor & enforce – protection is possible

• Culture & Crisis• Understand & adapt to sensitivities

• Don’t “hurt the feelings…” (like Zadig & Voltaire)

• Is China a cost or investment?• Tailor strategy to resource constraints

• What’s the cost of missing China?

Challenges

Image: Weibo; Business Insider

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• Strategy• Short & long-term

• Start at home & develop into China

• Marketing• Proactive, in-market multiplier & consumer

targeting

• Leads to home & away sales

• Service• Culture, language, information

• Promotions, payments & privileges

China Edge Toolkit

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• 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

• Key Segments• Modern Business Owners• International Professionals• Nouveau Riche• Second Generation Rich• Delegations and Officials• Traditional Business Elites

Who are the HNW Chinese?

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Hong Kong

Taiwan

Modern Business Owners

International Professionals

Nouveau Riche

Traditional Business Elites

Second Generation Rich

Government Officials

Where are Chinese HNWI from?

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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

• Relaxation or Adventure

• Shopping for Self / Gifting

• Health and Beauty

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• Respect & Understanding• Overcome instinctive distrust

• Engage at a personal level

• Learn to see beyond the clichés

• Key Issues• Information

• Trust

• Loyalty

• Cultural Understanding

• Food

Catering to HNW Chinese

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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

• Where?• In the UK

• Chinese Travel Trade

• Chinese Media

• Digital Marketing

• Social Media

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Millionaires Online

• 83% of Chinese millionaires use the internet daily• They frequently engage & curate content on social

media

When they are not on social media sites they are on news portals

• 63% prefer Sina • 35% prefer Sohu

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Online Engagement

China boasts the highest social and ecommerce engagement of any country

The social media landscape is highly segmented with niche platforms for specific audiences

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Organic and Paid Social

Weibo has many paid options Reach 100% of your fans with Weibo’s new promoted posts

Great for competitions or events

Weibo is not the Chinese Twitter

• It has a mix of functionalities from both platforms

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Organic and Paid Search

Google Baidu

Browsing habits of Chinese audiences are fundamentally different

• Don’t need an overly simplified customer journey

• More willing to find the information they need

Baidu BrandZone is a powerful tool but can be expensive

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China Edge Ltd.Plan. Engage. Deliver.

China Market Servicesfor Luxury Retail & Hospitality

www.chinaedge.co.uk

@chinaedge

info@chinaedge.co.uk