Millenials account for one third of the Chinese population and are eager to travel and explore the world, representing a lucrative opportunity for global marketers. Time to get prepared as the UK kicks off a series of initiatives to promote tourism and trade with China.
Demographic changes have created an aspirational middle class, and within this, rising levels of personal wealth have driven an ever-increasing number of Chinese international tourists. Among these travellers, according to Financial Times report, are some 415 million millennials (people born during the 1980s, 1990s and early 2000s, currently aged 14-36) who account for one third of the Chinese population – a size well over that of the entire United States.
At the same time, we are witnessing a change in travel and spending habits among the middle-aged groups whose interests have gradually shifted from luxury goods to fast-moving consumer goods.
The rise of the next generation
According to GfK’s January 2016 report, over half of China’s outbound travellers in 2015 were millennials.
In China, around 70% of the millennials hold ‘white collar’ professional jobs, and 66% of the millennials belong to the “high-income” group. This means the financial standing of these individuals and subsequent spending power will only grow further in years to come as they advance in their careers.
Compared to their parents and grandparents, Chinese millennials are more individualistic, freedom-loving and tech savvy. eMarketer states that over 90% own a smartphone, and social media adoption is extremely high at 89% for 16-24 year olds and 81.5% for 25-34 year olds. WeChat, Tencent’s ubiquitous social app, is used to dealing with many of their daily routines – from seeking out friends’ whereabouts and splitting dinner bills to buying movie tickets and hailing taxis home.
And within this segment, the upper echelons of spenders have an average household spend of US$65,000 per annum on tourism. According to a report released by Hurun Research Institute in 2016 which looks into travel preferences of wealthy millennials in China, dubbed “super travellers”, together with with third party apps WeChat is also the go-to source of travel information when it comes to pre-trip research. These trend setters and opinion leaders prefer using online travel agencies to high-street travel agents or hotel websites, reflecting a shift in purchasing behaviours. But when they make a choice they are prepared to spend big, with an average of US$500 hotel budget and US$34,000 annual spend on luxury items while travelling.
Travellers, not tourists
There is a distinct difference in the mentality of this generation compared to their predecessors. They do not consider themselves tourists, but independent travellers who wish to plan their own itinerary with individual “experiences” ranging from the gastronomic and cultural, to adrenaline-inducing.
This phenomenon should give international brands all the reasons they need to specifically appeal to this lucrative audience. To do this, brands would benefit from learning about their travel intention and areas of interest at the early stages of trip planning.
WeChat and Mobile are the must-have marketing channels
The travel decision making process can be complex, but it can be understood with the correct with a keen analysis of the data that is available. Although purchase decisions may now happen across online and offline environments, the elements involved in the process are still the same. Taking the time to look at how and where individuals may be gathering their information is the first step.
Travellers today have a plethora of online options and sources to support their search. Given the prevalence of mobile and mcommerce in mainland China, many Chinese millennials prefer to do everything on mobile – from pre-trip research and flight planning to hotel booking. This means the digital footprint of a traveller can then become increasingly hard to track. As an example, they may search for European travel tips on Sogou on PC, browse Europe travel related content on a travel app, book flight tickets within WeChat and share European locations on WeChat Moments.
This information needs to be pulled together and understood as a whole rather than in isolation. Working with the right partner to analyse this data allows you to access user profiles that map habits across screens and platforms, even going one step further in algorithmically expanding target audience reach.
Maximising the data
iClick Interactive offers a specialised solution called Travel+ to cater to the marketing needs of brands who wish to tap into this pool of travel intenders. Through our partnership with Tencent, the Chinese internet giant, we overlay our own platform data to Tencent’s Travel Intent data to generate unique insights. This presents the opportunity to identify those with the strongest likelihood of travel providing a level of granularity into the cities, locations and interests.
Based on these highly specific data points, brands can then run cross-channel, cross-screen programmatic marketing campaigns to deliver their messaging precisely to the right groups of travellers, who will benefit from receiving relevant and timely offers and information.
International brands have spent a lot of time on trying to reach the Chinese consumer base, and leveraging the online journey of a Chinese tourist from an early stage will mean that marketers can turn potential leads into purchases when they come visiting.
Ian Lashford, Commercial Director, Europe at iClick Interactive
Head of Agency Sales, EU and SEA