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Why Australian businesses can no longer ignore the local Chinese market

It’s no secret that our future is inextricably tied to China, yet the vast majority of Australian businesses are chronically unprepared to capitalise on this incredible opportunity.

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Why Australian businesses can no longer ignore the local Chinese market

It’s no secret that our future is inextricably tied to China, yet the vast majority of Australian businesses are chronically unprepared to capitalise on this incredible opportunity. Even those Australian businesses that are trying to grow through China, often launch headlong into the mainland without considering or at the very least testing their products with the significant local Chinese population.

(This piece was originally written by Jack Watts, CEO – Bastion Collective and published by Marketing Magazine online)

According to the 2016 census there are 1.2 million people with Chinese ancestry living in Australia, a figure that has grown 115% since 2001 and shows no signs of slowing down. Of these 1.2m Chinese-Australians, only 25% were born here.

So who are these 1.2m local Chinese that represent about 5% of our total population?  They are younger and more educated than the average Australian – 60% of local Chinese are under the age of 35, while 42% are tertiary educated (compared to the Australian national average of 14 per cent). This is reflected in 37% of local Chinese being students, while 39% are working professionals. They are 69% female and most likely to live in Melbourne or Sydney.

For Australian businesses, the 1.2m Chinese-Australians that live here are just as important a consideration as the 1.4m Chinese that Tourism Australia says will visit our shores in 2018. In fact the two are linked. The Visiting Friends and Relatives tourist market is often here to visit their daughters, sons, nieces and nephews who study at one of our universities.

So why should Australian businesses care? Well, these communities can be extremely lucrative. They spend approximately $9bn on Education, $9.2bn on travel and ethnic-Australians (of which Chinese are one of the biggest segments) spend $18.7bn in Australian Retail. Not only are Chinese spending their money on Australian shores, but they are buying $100bn of Australian exports every year.

The question for most Australian businesses is how do I speak to these communities? The clear answer is that you don’t do it in English as 82% of Australian-Chinese do not speak English at home. To put that into perspective, most Australian brands spending millions on marketing campaigns automatically rule out 5% of the Australian population and another 1.4m tourists because they only communicate in English.

Chinese migrants aren’t consuming traditional Australian media nor are you likely to reach them on Facebook or Twitter. WeChat is the key channel to reach Chinese with 1 billion monthly active users globally and 3 million active monthly users in Australia. For those not familiar with WeChat, it is a Chinese super app, owned by one of China’s largest companies, Tencent, that essentially combines Facebook, Instagram, eBay, Uber, Amazon and just about every other app currently on your phone.

Most Chinese pay for every-day items using WeChat Pay and 10,000 Australian Stores and Restaurants have already caught on by adopting WeChat Pay as 59% of Australian Chinese are much more likely to buy from a shop that offers this service. Businesses can advertise themselves and deliver online services via WeChat official accounts meaning users rarely leave the app’s ecosystem. There’s not even a lag for getting paid because WeChat Pay allows local merchants to receive payments to their Australian accounts within a shorter time frame and at a lower transaction cost than credit cards. Australian businesses can expect to have more success in marketing their services to Chinese tourists and locals with the display of the familiar WeChat app logo at their physical or online store-front. It’s an easier experience for Chinese to shop and pay, and also provides them with the feeling of familiarity.

What is clear is that if your business is not on WeChat, you are not talking to this incredibly lucrative market. Australian businesses need to wake up to this opportunity fast. WeChat is a good start, yet there are so many cultural nuances to this community meaning that brands need a clear and tailored approach. The local Chinese community is not one united, closed and cohesive community. It is in fact a hugely diversified group for whom a one-size-fits-all approach does not work.

Businesses need to be able to demonstrate cultural knowledge and cater to the different identities within the Chinese community. A recent study conducted by research and insights agency Bastion Latitude found that only 39% of Chinese migrants surveyed agree that Australian companies ‘understand their needs’, yet 66% of Chinese migrants state that they ‘would prefer to buy brands that show they understand the Chinese community’.

Of those surveyed, 51% of Chinese migrants stated that they would ‘like to see more Australian companies communicate in Mandarin’. Beyond creating in-language communications companies can also include references to Chinese culture in communications (e.g. use of Gold) and by recognising cultural events (e.g. Lunar New Year which 49% would like to see Australian companies celebrate). This doesn’t have to be an overt message but can simply act as a nod of understanding to Chinese culture.        

Some of Australia’s biggest companies and events have been getting on board. Bastion China, the marketing and communications arm of Bastion Collective has assisted Australian organisations to build a local Chinese presence, including the Royal Melbourne Show whereby at last year’s event they launched a first-of-its-kind WeChat event app to attract new local Chinese audiences in the lead up to Chinese Golden Week. Success indicators included raising awareness amongst the local Chinese community and driving traffic and ticket sales for the event. The WeChat channel gained over 1,800 followers in less than four weeks. In the first two days of the Show the Mini-Program app had over 634 unique users for an average time on site of 5 minutes and 38 seconds, with the demographic aged between 18-39 years old, reflecting the international student community. Other functions included daily event listings, the ability to create a favourite menu to build a list of attractions and events to see and do prior to arriving at the Show, detailed information on all activities, locations and an interactive map that could filter according to attraction or service (such as toilets or ATMs). The WeChat Mini-Program used a unique QR code scanned into WeChat for easy access to the Royal Melbourne Show WeChat account.

The influence and purchasing power of China within our region and within our country will only continue to grow at a rapid rate. If your business is not prepared for this, you need to be.

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