Why Targeting Chinese Independent Travelers Is Difficult for Tourism Businesses

The rise of the Chinese free independent traveler (FIT) has become a common theme across travel conferences and events for many good reasons. The promise of a way to bypass bargain-oriented Chinese tour operators, and the idea of an affluent, more “sophisticated” Chinese clientele is certain to generate excitement among tourism businesses around the world. For smaller tourism businesses in particular, Chinese independent travelers could represent the first real step into the booming Chinese tourism market, which so far, has mostly benefited leading brands and multinationals that have secured spots on Chinese tour operators’ itineraries. It all sounds incredibly appealing, but how does one find FITs and keep them? The elusive Chinese independent traveler continues to baffle companies that seek to attract them to their establishments, with good advice scarce and result-oriented marketing services difficult to find. In many cases, the sheer amount of research, time, and budget required to make an active push into China’s growing FIT market makes it a prospect not worth pursuing until either the market is bigger or the barrier of entry is lower. For multinationals and well-known brands, scale and corporate presence in the Chinese market, as well as brand recognition reduces many barriers that smaller companies face. Targeting Chinese independent travelers isn’t difficult for these smaller players because of a lack of choice. For a marketer faced with the challenge to grow the number of Chinese customers, options can almost seem overwhelming. Should I invest in one of the many Chinese tourist certification programs available from a large range of companies—none of which represent the Chinese government—which tout intangible benefits that may or may not strengthen my position in the Chinese market? Should I promote the business at one of China’s many travel trade fairs? Are our rooms or services bookable on Chinese platforms such as Ctrip and Qunar, and if not, how do I accomplish this? Perhaps I should run some marketing campaigns on Chinese social media such as WeChat and Weibo, as well as on China’s leading search engine, Baidu? In many cases, the sheer amount of research, time, and budget required to make an active push into China’s growing free independent traveler (FIT) market makes it an elusive prospect not worth pursuing until either the market is bigger or the barrier of entry is lower. For multinationals and well-known brands, scale and corporate presence in the Chinese market, as well as brand recognition reduces many barriers that smaller companies face. The good news is that some of the key components (almost) required to receive Chinese independent travelers have gotten easier to implement in recent years. China’s competitive payments processing industry has pushed UnionPay, AliPay, and Tencent (WeChat Pay, TenPay) to work closely with overseas payment services providers to make their services easier to implement for businesses around the world. A diverse and exciting portfolio of bookable properties to show to their growing number of FIT customers has also driven China’s online travel agencies to make it easier for foreign businesses to get listed on their marketplaces. Even so, implementing these key components of a Chinese-serving business may seem like a waste time and money. A business with zero reviews on Chinese travel platforms is hidden deep in the search results, and potential customers will—as can be expected—prefer more well-established options. The question, of course, comes down to marketing—and that’s where things get difficult. The power of Chinese key opinion leaders (KOLs) in driving consumers to certain businesses and brands is undisputed, and WeChat has quickly become the marketing tool of choice for China marketers around the world. Yet, while WeChat, described as China’s Facebook or WhatsApp, may seem like an easy inroad to B2C marketing in China, some quick internet searches will lead the humble marketer to realize that setting up a page on China’s Facebook is nowhere near as easy as setting up a Facebook page. Likewise, while reaching out directly to a non-Chinese KOL for some commissioned, sponsored blogging may be straightforward, simply finding a relevant Chinese KOL—not to mention successfully contacting them—poses a serious challenge. Even the most obvious and seemingly easiest option of them all, pay-per-click search engine advertising, reveals a plethora of challenges in China. For WeChat, Tencent provides a relatively straightforward process for setting up an official account, the WeChat equivalent of a Facebook page. However, what isn’t made obvious is that such pages are limited to reaching international WeChat users, i.e., WeChat users outside of mainland China. To set up an Official Chinese Account, a Chinese business license is required, a severely limiting requirement for any business without a corporate presence in China. The only option available to remedy this problem is to hire one of the many digital marketing agencies in China that cater toward foreign businesses, which will use its (or one of its associated businesses’) business license to register a WeChat account in their client's name. Such services naturally come at a cost, part because of the Chinese agency will be legally responsible for content posted to all its associated WeChat accounts, and ties its client's WeChat presence to a Chinese agency. With the agency being the legal owner of the WeChat account, changing marketing agency down the line can be either costly or impossible—not an ideal negotiating position. Even with the account set up, the marketer is posed with the same challenge as with listings on China’s travel platforms: how does one generate excitement and grow followers? For Baidu search advertising, there are similar problems that arise. Setting up a Baidu account requires an initial payment, and unless an operator has a so-called ICP license—which, for a business, requires a Chinese business license—will require working with intermediaries just like in setting up a WeChat account. Lastly, reaching and signing KOLs in China will more than likely require going through one of China’s many KOL agencies, some of which are catering to a foreign clientele. While independently seeking out and contacting KOLs is certainly an option, the language barrier and walls raised by agencies representing KOLs make it a challenging venture. Additionally, identifying relevant KOLs that are well-read among the intended market segment in China may require plenty of local expertise. Looking beyond the digital channels and instead toward more traditional marketing options for travel businesses reveal an industry still very much centered around B2B relationships and a focus on Chinese group travel. China’s leading outbound travel events are all exclusively B2B, providing little opportunity to reach China’s experience-seeking independent travelers. As with any booming industry, “get rich quick” schemes in the form of “get Chinese tourists quick” are many, often promising different types of magic bullets that cut through the complexities of operating in a complicated and highly regulated market. With exaggerated and unverifiable claims, Chinese tourists and customers are often promised after getting some certifications, creating some social media accounts, or perhaps getting featured on the provider’s online platforms on “the Chinese internet.” As can be expected, the first part of the “get rich quick” scheme often involves paying a fee. No refunds. The reality, unfortunately, is that a sophisticated approach is necessary to reach China’s sophisticated independent travelers—and that requires time, money, or both. In the end, the safest and perhaps cheapest way to gain success with Chinese independent travelers is to simply provide a memorable and unique experience because that’s what they’re looking for in the first place. Chinese KOLs are critical to a successful marketing mix in China since word-of-mouth is king in the Chinese market, making delighting Chinese travelers all the more important for future success in the market. Another aspect that is often forgotten is that the perhaps most experienced Chinese travelers live abroad—as international students or expatriate workers—and serve as highly regarded KOLs. Engaging with the local Chinese diaspora is an excellent way to avoid the pitfalls of marketing in China and encouraging organic growth in the Chinese market. However, all is not lost. The number of Chinese independent travelers going abroad is growing each year, and eventually, they’ll discover any great tourism business around the world. Making a well-informed and cost-efficient active push into the market as its growing is the challenging part, but it can also be immensely profitable.

Why Targeting Chinese Independent Travelers Is Difficult for Tourism Businesses

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Published April 07, 2017

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Why Targeting Chinese Independent Travelers Is Difficult for Tourism Businesses