Myles Dawson is the UK country manager at global payments platform Adyen.
China’s Lunar New Year means many things to the global Chinese population, including participating in traditions to maximise their chances for a prosperous year ahead. So,in this new year of the Dog, retailers around the world should ensure they are preparing their businesses to be capable of capitalising on the spending power of the Chinese shopper. This market should not be underestimated by any organisation, even if they don’t have a huge global operation.
Chinese consumers are truly global shoppers, leading the world on cross-border purchases, and a recent report by international management consulting firm McKinsey found that Chinese consumers are responsible for up to half of all luxury brand sales worldwide. China’s other national holidays, including Golden Week in October, mark a time where millions of Chinese residents travel abroad to make the most of the global retail opportunities available.In 2017 alone, Chinese consumers shopping for products overseas spent an estimated average of $473.26 each, representing 4.2% of total retail e-commerce market last year. Analysts estimate that UK retailers stand to make upwards of $337 million from Chinese consumers in the UK.By 2022, leading research company Forrester predicts that cross-border e-commerce could increase by 20%, reaching $630 billion, with China leading the boom.
Specifically for British and American companies, research found that two-thirds of Chinese millennials preferred Western to local Asian brands. In addition, the Royal Mail recently released research finding 55% of China’s online shoppers buy UK goods and spend on average £104 a month on British products.
It is clear that retailers need to capitalise on the opportunity Chinese consumers present and take time to understand preferred local payment methods and adapt their approach accordingly. Delivering a seamless and familiar payments experience is a crucial first step for those businesses wanting to avoid being overlooked. With many Chinese consumers taking the holiday season as an opportunity to purchase gifts for loved ones both back home and abroad, being able to offer a diverse range of payment options that Chinese shoppers are used to is vital to being able to accommodate this important customer.
Smartphones are crucial to Chinese shoppers, research shows 79% of China’s shoppers make purchases via their smartphone, compared to 28% of UK shoppers. This means that enabling mobile shoppers to pay using familiar regional methods will provide an experience that will not only build on retailer’s profits, but keep these shoppers spending in-store or online.
Payment habits differ significantly across the globe. Whether cash is still king, or local payment methods are more popular, credit card penetration is generally much lower in most markets when compared to the UK and the US. So, China-specific payment method need special attention.WeChatPay, AliPay and China Union Pay are the three largest methods used by Chinese consumers. Just because a business doesn’t have a presence in China, it is important not to overlook the large market that the region offers. Offering different payment methods isn’t just something for the online shopper. By offering these local payment methods in-store, this ensures no customer is unable to pay through their preferred method. Allowing Chinese shoppers to access their preferred local payment methods helps to deliver the payment experiences Chinese customers are used to and increases the opportunity of closing a sale.
Another method to consider is Alibaba’s Alipay, which is the world’s largest third-party mobile and online payment platform, used by more than 520 million people and supporting 27 currencies.SimilarlyWeChat Pay is one of the most popular mobile payment apps in China. WeChat has 1.3 billion users, 400 million of whom use the app for either paying friends (through peer-to-peer payments) or purchasing a product.
Following November’s record-breaking Singles Day sales, and with Chinese New Year, it’s more important than ever for retailers to find ways to allow Chinese consumers to make purchases with their payment method of choice. Chinese tourists are clearly an important audience for retailers to consider. To provide Chinese customers travelling abroad with the payment experience they are used to at home will provide a significant benefit for businesses – it is a sure-fire way to secure repeat business and boost your customer experience.We know Europe and America are popular destinations for Chinese tourists, so it’s vital that retailers cater to the needs of this incredibly important and large customer base as they travel abroad to make this newYear of the Dog the most prosperous it can be.
Global Banking & Finance Review
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