Why China’s Golden Week is a golden opportunity for mobile payments
This week in China is the second biggest annual holiday - Golden Week. For the uninitiated - think Easter, with the airports jammed with travellers going abroad, but with the difference being that nearly all are high net worth millennials, with shopping for high quality goods uppermost on their minds.
Chinese visitors and their spending grow each year, and it is inevitable that this Golden Week will generate bumper sales for brands and retailers that know how to market to the tourist audience, but this year they have two very powerful allies.
The gargantuan battle between Alipay and WeChat, to dominate mobile payment to Chinese consumers has shifted territory from mainland China, to spending abroad. It gives UK brands and retailers extra marketing power that can be aimed at visitors who, on average, spend £4,350 on shopping when abroad*.
With cash and card payment becoming redundant in China, tourists seek mobile payment options while on holiday, and research shows that 91 per cent of tourists will spend more in shops if mobile payment is available*.
Alipay and WeChat Pay not only create a catalyst to spending in their own right, they also provide free and very effective marketing tools and promotional incentives.
When it comes to supporting retailers and brands, Alipay has an impressive array of free marketing tools to create consumer ‘stickyness’, or loyalty, to the payment platform. In other words, Alipay invests in marketing mechanics and promotional premiums for sellers to use in order to drive use of its payment system.
One of the most effective is the text posting tool that automatically sends promotional messages from stores to Alipay using consumers that are within a radius of 500 meters. It works particularly well as a positive unexpected communication for Chinese consumers when they are away from home. There are also other marketing tools, such as a DIY tool kit of coupons, online storefronts and lifestyle content.
But Alipay also pays for, and supplies attractive promotional premiums. During Golden Week this year it will provide a 50 RMB discount on purchases of 1,200RMB or more, which is approximately £5 for £130 spent. In a culture in which obtaining a bargain is important, even among high net worth spenders, this an attractive proposition. In addition, Alipay is also committed to giving the best currency exchange rate on purchases.
Another benefit of mobile payment is that it is possible in some cases for Chinese consumers to automatically receive UK tax back, or from wherever else they are using mobile payment.
When it comes to consumer incentives to use WeChat Pay it has a powerful promotional draw, the red envelope. Physical red envelopes and purses are historically associated with gift giving, and from a young age create great excitement in China. WeChat’s use of a digital red envelope as a promotional icon has been hugely effective, and during Golden Week will be used in an instant win format with a chance to get prizes with purchases. Premiums range from small amounts of cash back to complete purchase value, and separately retailers also qualify for instant win rewards.
However, the chance for brands and retailers to win a red envelope premium for adopting Chinese mobile payment is incidental compared to the potential return from sales. Apart from social media marketing, installing one or ideally both of the two transactional platforms, is the most effective thing they can do to drive sales to Chinese consumers.
Marie Tulloch is inbound marketing manager of Chinese marketing consultancy Emerging Communications, London and Shanghai.