Destinations Bet on VR Marketing to Lure Tech-Savvy Chinese Consumers

In an increasingly competitive marketplace, destinations around the world are increasingly looking at VR technologies to attract Chinese travelers. While still a niche marketing tool, VR platforms offer the opportunity to reach China’s tech-savvy, young, and affluent consumers with truly immersive marketing content that can generate genuine excitement about travel. The VR industry, still very much in its infancy, is divided across a multitude of young platforms, including HTC’s Vive, Facebook’s Oculus, Samsung’s Gear VR, Sony’s PlayStation VR, as well as Google’s Daydream. However, only a few of these—often expensive—platforms are available in the Chinese market, which instead has become dominated by relatively low-tech and platform independent mobile VR solutions. According to Canalys, a Singaporean technology market analyst firm, China accounted for 40 percent of the VR headset market in 2016, making it the leading market for VR technologies. On Singles’ Day last year, Alibaba sold 150,000 pairs of cardboard VR goggles—simple contraptions that can be used with most modern smartphones. In contrast, the U.S. VR market remains dominated by higher-cost alternatives from Sony and Facebook. The low-cost of entry and relative success of simple mobile VR solutions in China has made it an interesting frontier for destination marketers, which are faced with increasingly stiff competition for China’s high-revenue tourists. Struggling to effectively reach China’s young and affluent travelers, VR marketing is proving a promising way to reach these consumers with—compared to traditional marketing channels—a limited budget. According to a German study on VR’s role in tourism marketing, 62 percent of respondents would like to use VR in their tourism planning, with 13 percent of respondents even willing to pay for the privilege. Chinese destinations have been among the first to embrace VR as a tourism marketing tool, betting on immersive VR experiences to excite prospective tourists about their destinations. Sanya, the southernmost city on China’s Hainan Island—a popular domestic tourism destination—recently launched a WeChat-based VR platform that allows users to explore local sights and scenery in 360 degrees by simply attaching a cheap VR headset to their smartphones. But Sanya is far from alone as many Chinese destinations are trying to stay on the forefront of marketing innovation to stand out in the incredibly competitive domestic tourism industry. However, Chinese consumers are excited about new VR experiences as well, with whole platforms focused exclusively on VR travel content popping up in China—filled with both private VR footage and official marketing content. UtoVR, one of many such platforms, serves VR footage of everything from official scenic tours of international tourism destinations to individual tourists’ 360-degree recordings of nightlife in Bangkok’s red light district. While international destinations may be behind their domestic peers in capturing the imagination of Chinese VR users, VR marketing is becoming an increasingly common sight at international travel trade fairs around the world—including in China. In Los Angeles, FansTang, a Chinese company specialized on VR content targeting Chinese millennials, was quicker to realize the potential of Los Angeles-focused VR experiences than the local tourism authorities. To satisfy its users’ lust for VR content that depicts Los Angeles tourism attractions, the company has been recording 360-degree videos of various landmarks and attractions without any guidance from the local tourism board. On the other side of the Atlantic, Tourism Ireland has teamed up with China Youth Travel Service (CYTS) to serve Chinese consumers with 360-degree footage of the Wild Atlantic Way and Belfast, hoping to encourage Chinese millennials to experience the scenery by themselves. Meanwhile, the Chinese government has teamed up with HTC to launch an official VR-enabled travel platform, The China VR Tourism Cloud Data Service Platform, which will be rolled out in tens of thousands of stores nationwide to let prospective tourists explore different destinations in virtual reality. While details about the clunkily named platform are still scarce, some of China’s largest travel agencies have already been signed as partners—including travel agencies primarily serving international destinations. According to the company, the ambition is to have the system implemented at a majority of China’s over 200,000 offline travel agencies—with the potential of taking VR from a niche marketing tool for reaching tech-savvy consumers to a necessity for staying relevant in the Chinese tourism marketplace in the years to come.

Sectors

Insights

Company

Destinations Bet on VR Marketing to Lure Tech-Savvy Chinese Consumers