With half of the globe’s consumers, China is home to the Australian retail industry’s most sought-after market.
With Chinese consumers set to spend a whopping $6.4 trillion by 2024, leveraging this market offers endless opportunities for Australian retailers.
As the wealth of Chinese consumers rises rapidly, with the average per-household disposable income of urban consumers doubling between 2010-2020, according to a McKinsey report, the Chinese market is rife with opportunity for Australian retailers.
And with the country poised to take over the US as the second largest global economy by 2020, understanding this global powerhouse is essential to help retailers thrive into the future.
But cultural and language barriers and stringent regulations make it increasingly difficult for small and large retailers alike to enter into the Chinese market – and for some, it can seem like a near impossible task. But for those that have, sales have skyrocketed and business has boomed.
So what are the secrets to cracking this lucrative market?
Ahead of the New Retail 2019 event in February next year, where the retail industry’s leading experts will be sharing the inside story of how you can strategically enter the Chinese market, some keynote speakers share some of the secrets to cracking the market.
Three tips to crack the Chinese market
David Thomas, a leading expert on China at David Thomas Asia, who will be presenting at New Retail 19, says there are three critical steps Australian retailers need to consider in their Chinese market entry strategy.
He says first and foremost retailers need to have an in-depth understanding of the economic, societal and demographic changes and how this is shaping consumer spending habits.
“The challenge in China is that you need to do your research, build your capability, build your scene, operate in a foreign environment and it takes time and costs money and needs a lot of focus.”
But there are three key things to consider, according to Mr Thomas.
- Understanding hierarchy
Having an in-depth knowledge and understanding of the Asian hierarchical system is absolutely essential for retailers to appeal to the Chinese consumer, Mr Thomas says.
“Asians work in a hierarchical system. In other words they organise themselves in terms of seniority, where the eldest are the most senior and the youngest are the most junior. Elders tend to have the power and young ones tend to carry out the instructions so often retailers forget this.”
Understanding this hierarchy is important in terms of understanding the value of targeting other members of a consumer’s family.
“You need to be careful that you don’t build relationships with the wrong people and understand that these purchasing decisions aren’t always obvious,” Mr Thomas says.
Simple strategies like offering a family photo in-store to extend your respect to them could help to build rapport with all members of a Chinese family, according to Mr Thomas.
- Welcome signs
Erecting welcome signs in the Chinese language is also a small, but critical step in ensuring that your store appeals to Chinese consumers, and according to Mr Thomas, it’s an easy step that is often overlooked.
“For instance, a sign in Chinese that says welcome or a sign at certain times of the year like Chinese New Year, Mid-Autumn Festival, or National Day. It’s not difficult to do these things and it makes a huge difference – it would mean these consumers go into your store not someone else’s.”
And for e-commerce retailers, the same advice applies, according to Mr Thomas.
- Long-term relationships
Thinking about building genuine, long-term relationships beyond the point of sale is also essential.
“It’s not just about a sale, it’s about a relationship. These are people who want to build long-term, trusting relationships with you. So when they come back they bring their families and friends. Think of it as a long term relationship and use every tool you can to build friendship and trust for the long –term,” Mr Thomas said.
With 1.5 million tourists coming to Australia every year – a figure that is set to double over the next 10 years, there are also immense on-shore opportunities to target Chinese consumers with the above strategies, Mr Thomas says.
Knowing your consumer
Tina Le Chief Commercial Officer, Stone Drums Group and Executive Director, Global Connectors, who will be showcasing her tips around the elusive Chinese consumer at New Retail, said that having an understanding of the Chinese market – knowledge that will be provided in her session – is crucial.
“There is no such thing as a single ‘Chinese consumer.’ China is a complex multi-layered marketplace with differences marked by regional differences, cultural nuances and evolving consumer behaviour. If you want to play in this market, you need to understand your target consumer as well as what is it that sets your brand apart,” she said.
“The Chinese consumers are no longer content with a brand simply because it is big, ‘Made in Australia’, or expensive. Brands must ensure that their brand story and value proposition is in alignment with the Chinese consumer’s needs, both rationally and emotionally.”
So whether you’re an SME or an industry leader, unlock the secrets behind tapping into this lucrative market, and fast-track your businesses success at the New Retail 19 event in February.
If you want the inside tips for how to strategically enter the Chinese market and succeed in doing so, the New Retail 19 event will tell you how to:
- Understand the Chinese ecosystem and the shift in Chinese retail formats
- Drive your launch into China
- Know what we can learn about China’s future
- Understand the importance of Daigou channel in Australia
- Explore KOL’s and what they can do for your market
- And much, much more
So, what are you waiting for? If you want to leverage the billion-dollar Chinese market, book your place at New Retail ’19 today, click here.