Domestic retail continues to paint a very bleak picture in the news nationally around Australia. This bleak picture is not the case for a selection of retail brands applying themselves to the right market.
To be successful in retail you need to make yourself accessible to people who have money, willing to spend it and want your product.
When Apple, Louis Vuitton or Burberry open a new store or launch a new product they have queues out the door for weeks, even in Australia. When Myer or David Jones launches a new brand, nothing changes. It takes a 70% sale to move the nation for a few days a year.
What’s the difference?
You just have to look at the people in the queue to know who has money and is willing spend it in Sydney at the moment. The Asian (and mostly Chinese) market are quickly becoming a significant force in the Australian consumer market today.
While Myer and David Jones continue to fight for old Australian money, clever suppliers are positioning themselves in the new cashed up market.
It’s not just the local market, Australian airports now heavily rely on the Chinese traveler to act like a swarm of locust over Australian health food products, Penfold’s range, Tag or Tissot watches and opal jewellery to ensure they meet budgets.
Locally, real estate agents have been first to acknowledge the cashed up Chinese entering and staying in Australia. Many of these are on student visas, these students have enough cash to buy apartments and live very comfortably.
The good news is the Asian market doesn’t just buy Luxury items, for many Australian brands a slight adjustment can open many new retailing opportunities to people with money to burn.
For the past two years as National Sales Manager for Australia’s largest opal jewellery brand, I have excelled at selling opal jewellery to the Chinese traveler first and foremost. Making the Asian traveler our priority has resulted in a 20% growth year on year, this kind of growth is only a dream for many Australian retailers.
If you want to crack into the market of selling to the Chinese traveler you will need to make some serious adjustments to your retailing position, packaging and retailing mix to be a consideration to the Asian market.
I have outlined several Spending Habits you need to consider:
- You must offer discounting, the Chinese always need to feel like they are getting a bargain.
- Gifting is culturally important, gifts under $100 and a lot less are bought by the dozen.
- Colour is very symbolic and important in packaging and promotions: red and gold are important around discounting.
- Chinese like to deal with Chinese speaking people. I employ Chinese born staff that can speak only some English, and are aggressive by nature.
- Face value is paramount in the Chinese culture; the personal gift (which they spend the most money on) must enhance their social status.
- Product display is not as important to them as it is to Westerners, this will change with younger audience travelling. Displaying your entire product range at once is acceptable.
- They like branded products, but Australian Made products are loved and valued very highly as they are deemed to be safe and real.
- Chinese consumers will spend big money on products they believe will bring them luck, add to their status and increase in value over time.
- Chinese consumers still use cash to buy high end products and normally carry multiple credit cards for transactions.
- Before tourists purchase a product they will seek the approval from a person (historic habit from of communist times), which generally makes tour group leader very important.
- For packaging you want unsophisticated simple wording and imagery that might call “cheesy”. Clinical and scientific packaging is often confusing for the Chinese consumer.
- Using simplified mandarin on your signage and promotions is vital.
Organised tour groups still dominate where and how Chinese tourists spend and buy products while on holiday. While this might change will new laws, an increasingly younger generation of Chinese travelling and the increased number of Chinese in Australia, it will not change quickly.
Australian suppliers and retailers have numerous opportunities to make themselves accessible and appealing to the Chinese consumerism.
What are your thoughts on Asian Consumerism in Australia and how retailers can connect to the Asian buyer?
If you want to know how and where to access the cash up Chinese tourist and local market, Sean Grobbelaar is a retail consultant that specializes with the Asian consumerism in Australia, exporting to China or branding in the duty free market.
Contact Sean Grobbelaar at Sean (at) passionforlife dot com dot au or connect on LinkedIn