How retailers should target the growing Chinese market in Manchester
Colin Neil, SVP Business Development at Adyen, explains how retailers should target the growing Chinese market in Manchester...
Businesses throughout the UK often talk about the best tactics to get into the global market and grow their footprint across the world, but what if the global market shows up right on their front doorsteps?
There has been a vast increase in the number of consumers from China – one of the largest retail markets in the world – visiting Manchester. So much so that the city now boasts a resident Chinese population of around 15,000 and a thriving Chinatown, with tourist visitors set to increase by a further 40% in 2020 to reach £1 billion in spending.
Not only has the sheer number of consumers grown in recent years, but the amount of money Chinese visitors are spending while they’re here is rising – the average spend per visit in the North West has leapt by 94% to £2,167.
As a result of the growing spending power of Chinese visitors, the Manchester Chinese Forum has sought to deepen the economic and cultural ties between Manchester and China. Some economists even believe that a strong relationship could offset any potential retail downturn after Brexit.
With the connection deepening, Manchester’s Chinese student population has grown at twice the rate of the national average, and Manchester University has the highest number of Chinese students anywhere in Europe.
Manchester’s Chinese student population has grown at twice the rate of the national average.
One in every eight Manchester University students comes from China – a figure boosted significantly by a 2015 visit to the university’s National Graphene Institute (NGI) by Chinese leader Xi Jinping.
Outbound, we’ve seen a 114% increase in Northern students gaining Chinese internships and emigrating into China.
This strong relationship, the high spending power of Chinese consumers and love of UK brands, represents a huge opportunity for retailers in the North. According to Adyen’s recent report, Retail lessons from China and how to sell effectively to Chinese audiences in the UK, 32% of UK tourists in 2018 were Chinese, with an average individual spending budget of £5,309.
However, many retailers are seeing these shoppers turn away because their payment preferences are not accepted. Mancunian retailers need to stay ahead of the curve and integrate global payment systems that can cater to the way this demographic prefers to pay – typically via a mobile wallet option – either AliPay, UnionPay or WeChat Pay.
While Apple Pay and Google Pay may be favoured in the UK, huge numbers of visitors from the Far East use WeChat Pay or AliPay to make mobile payments – an estimated 92% of city-dwelling Chinese nationals use these platforms.
If Chinese consumers don’t know your story, they aren’t given a reason to buy.
- Jessie Hsu
Even though the demand for alternative payment methods is growing, it wasn’t until 2018 that UK shops started accepting AliPay, UnionPay and WeChat Pay in-store.
In the past, this lack of availability caused some issues for Chinese tourists, students and expats, who were unable to pay for things using the payment methods they use every day at home. Not only that, it meant that retailers were missing out on an estimated £1 billion revenue from tourism alone, according to Adyen’s recent report.
However, as Harper’s Bazaar China editor Jessie Hsu, said: “If Chinese consumers don’t know your story, they aren’t given a reason to buy.” It goes to show, payment methods aren’t the only barrier to enticing Chinese consumers to spend.
As it happens, a significant factor to the increased Chinese tourism is a burgeoning fascination with British history and cultural sites. British period films and TV dramas such as ‘Pride and Prejudice’, ‘Sherlock’ and ‘Downton Abbey’ have an extraordinary following in China.
British period films and TV dramas such as ‘Pride and Prejudice’, ‘Sherlock’ and ‘Downton Abbey’ have an extraordinary following in China.
As well as this, the UK is famous for delivering high-quality products and brands with an authentic story, especially when it comes to items such as clothes, shoes and accessories.
Brands can take advantage of these factors while embracing Chinese selling strategies, to combine the fascination with British heritage and culture with the retail methods that Chinese consumers are familiar with. For example, in China retailers have introduced virtual reality mirrors and gamification into stores to allow consumers to try on clothes and hairstyles, share their appearance and incentives with friends on social media.
By providing functionality for a wider range of mobile payment platforms and embracing Chinese selling strategies to entice, excite and engage consumers, retailers will continue to attract customers from further afield. This means they will reap the benefits of high transactions and repeat purchases from the Chinese consumers residing in Manchester, leading to increased revenue and customer loyalty.
These findings should be seen as a wake-up call for business owners. It’s time to embrace mobile wallet technology and adapt to alternative payment methods. If retailers don’t then they’ll be losing out on increased sales revenue – particularly in Manchester, where the huge opportunity represented by the Chinese market is waiting to be unlocked by retailers.