A common stop for any traveler to China is the Great Wall of China. Finished around 200 BCE, one of its purposes was to keep the Chinese from heading off into the outside world. That’s no longer the case — in 2013, 1.8 million Chinese tourists traveled to the US alone, and spent over $21 billion while doing so. According to the US Commerce Department International Trade Administration, this supported over 109,000 US jobs, or about 2.8% of US GDP. The Chinese tourist spends about $7,000 per trip, as compared to the average of around $4,000 from a European visitor.
This is only expected to increase, thanks to a recent agreement between the United States and China. President Obama made an announcement at the Asia-Pacific Economic Cooperation summit in November 2014 where the US and China agreed to a reciprocal ten-year visa policy. This would allow citizens of each country up to ten years on a single visa.
Tom Doctoroff, writing in Atlantic magazine in May 2012, noted that the Chinese “are fascinated by America, although often perplexed by its inherent contradictions. The United States is both free and unfair, creative and fashion challenged (some Chinese describe blue button-down shirts and khaki pants as our uniform), sporty and grossly overweight, institutionally robust and politically dysfunctional, individualistic and self-deluded (they love to laugh at narcissistic, talent-free American Idol contestants). They are amazed that a nation of 300 million self-starters does not come apart at the seams.”
International travel is now seen as a strategic imperative. Haybina Hao of the National Tourism Association of China says, “Chinese leaders recognize that travel expands the horizons of its citizens, and when people see more of the world, they can return to China inspired and better prepared to be creative entrepreneurs.” Whereas group tours were once the norm, 70% of Chinese are now designated as independent travelers.
A mere 40 years ago I helped arrange a trip to China for my boss, who was going on a business mission with Minnesota’s governor. One of the things he remembers about that trip is that when he was leaving his Chinese hotel, a chambermaid ran after him holding a squeezed-out tube of toothpaste. She had never seen such a thing and felt it still had some value and that he had forgotten it by mistake.
How things have changed. Now China is very globally savvy, with the biggest number of internet users and most active social bloggers. There are more than 300 million Chinese who use blogs, social networking sites and other online communities — and their numbers add up to the combined population of the United Kingdom, France, Spain, Germany and Italy. According to McKinsey & Company, more than 80% of Chinese internet users pay attention to information on commercial networking sites.
By 2018 Chinese tourists and shoppers are expected to be the top overseas travelers to the United States, according to Evan Saunders, CEO of Attract China, a Boston and Beijing consulting firm that helps US businesses attract Chinese tourists and shoppers.
Attract China always points out to its clients the dates of Chinese holidays and to be prepared for the on-rush of customers on holidays, particularly in the winter.
Many firms think that having Mandarin-speaking staff and brochures handy for the Chinese shopper is enough, but the Chinese are big ecommerce and internet users and make their purchase decisions based on what they find on the internet. According to Pierre Gervois, publisher of Luxury Hotels of America magazine, which caters to Chinese travelers, “U.S. luxury brands must understand that, in order to sell to Chinese tourists in the United States, they must start to promote and do branding in China, with specialized digital media targeting Chinese travelers planning their trip to the United States.” It’s probably too late to promote your attractions or goods in printed magazines or tourist guides distributed in airports or hotel lobbies, because the purchase decisions have already been made several weeks ago, in China.
Luxury firms are also going online to entice Chinese shoppers. Tiffany has a Chinese engagement ring app, while Chanel offers online Chinese makeup tutorials. The Shanghai Travelers’ Club has its own app in Mandarin, and features articles about $50 million private jets, gold-plated handmade laptops and private islands available for rent. It seems obvious: if you want Chinese customers, you need to advertise in Chinese. Yet many US companies operating in China do so without a Chinese website.
Minnesota and the Mall of America
Minnesota has many students from China and has been working hard to attract tourists, some of whom may come to visit children temporarily staying in the United States. The Attract China brochures list the US markets it is currently in and the markets it will be in later this year. In the middle of the US map there are just big blanks. Attract China’s efforts are located on the coasts and, oh yeah, Las Vegas. Minnesota doesn’t normally spring to mind as a hotbed of Chinese tourism.
However, to capture Chinese dollars, shopping malls around the world are gearing up to get part of that action, and that includes Minnesota. The biggest mall in the world is the Mall of America, located outside of Minneapolis, with 520 stores and the largest indoor amusement park in the United States. Dubai claims it will have the biggest mall by 2025. But wherever the now-affluent Chinese travelers go, marketers are gearing up their localization, translation and cultural efforts to reach into Chinese pocketbooks.
Okay for you truth-in-advertising purists, the New South China Mall in Dongguan is the largest mall in the world based on gross leasable space. However, it has been 99% vacant since it was built in 2005. In an understatement, Wikipedia notes that it “has suffered from a severe lack of occupants,” thanks in part to its relatively inaccessible location in the suburbs of Dongguan.
Biggest in the world or not, the Mall of America has invested in Chinese tourism marketing. I met with Doug Killian recently, the mall’s senior director of international tourism, and he gave me this rundown:
An estimated 50,000 Chinese visitors currently visit the Mall of America annually. High-end designer stores, no sales tax on clothing or shoes, the expanding acceptance of Chinese UnionPay credit cards, convenient air service to Minneapolis/St. Paul International Airport and focused marketing to Chinese travel trade and media are some of the reasons more Chinese are adding the mall to their travel itineraries. The Mall of America is the most visited mall in the United States, with 40 million total visitors per year.
Killian added “Today, our biggest challenge is raising awareness among Chinese travelers. When Chinese think about travel to the US, they typically consider New York, California, Florida and Las Vegas. We recognize that they will visit these destinations on their first US trip, but we want them to consider us for their second or third trip to America. They are doing so.”
Kay Jewelers offers a loyalty program for Chinese tour operators who bring Chinese groups into their stores. The Mall of America Kay Jewelers has Chinese-speaking staff and is held up to other Kay Jewelers stores as the standard on how to attract Chinese customers.
But it’s rather amazing — the United States went to war in Vietnam in part to counter the “red menace” from China, and now American retail sees China as its savior.