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With growing ease of travel and pent-up intent and savings, many regions across the world are eagerly awaiting Chinese tourists to boost earnings. This signals the beginning of a much-needed period of growth for the global economy, and in particular key markets in South-East Asia.
The China Tourism Academy forecasts that domestic tourism will recover by summer 2023, and international tourism to recover to 31.5% of pre-pandemic levels, a twofold increase compared to last year. Key cities in South-East Asia have been awaiting the arrival of Chinese tourists and the resultant rise in services and goods consumption.
With data on consumer behavior and human movement, businesses can now visualize where people go, where they shop, and more. We studied Azira’s consumer behavior data to better understand the impact of China’s reopening on key Southeast Asian markets of Singapore, Kuala Lumpur, and Hong Kong and understand:
- How the overall recovery is trending across categories
- What impact of festivals and holidays have on footfall
- What the profile of visitors seen shopping or eating outside looks like
- How recovery has progressed for Chinese tourists at these destinations
Insight #1: Overall recovery and impact of holidays/festivals
Hong Kong Malls, Hong Kong Grocery and Hong Kong Chinese restaurants
Singapore Malls, Singapore Grocery and Singapore Chinese restaurants
Kuala Lumpur Malls, Kuala Lumpur Grocery and Kuala Lumpur Chinese restaurants
Graph: Footfall for week 1 (26th December) was taken as the base, the chart shows the week-over-week rise/fall. Timeline: 26th Dec to 5th Feb
- The overall trend for footfall across the three categories showed a positive increase with dips and lows during the period studied. New Year holidays fall in week 2 and Lunar New Year holidays begin in week 4 and extend to week 5. Both holidays led to a significant rise in footfall to malls and Chinese restaurants. Footfall to grocery stores during the Lunar New Year recorded a decrease in footfall as families chose to celebrate by eating out or celebrating at home with friends and family. Compared to Hong Kong and Kuala Lumpur, recovery is slower for grocery stores in Singapore but picks up during the Lunar New Year.
Singapore ( 2022 – 2023 )
Hong Kong ( 2022 – 2023 )
- Chinese restaurants in Singapore show a 50% increase in visitors a day before the Lunar New Year, but this could also be due to lower-than-average performance during the first two weeks. Comparatively Hong Kong shows a steady increase in visitors to restaurants, also influenced by the arrival of visitors from the Chinese mainland.
Retailers and restaurants can expect the footfall to only increase as the summer holiday season approaches and Chinese tourists resume international travel. With an increase in visitors expected retailers and restaurants will have to ensure they don’t face logistics and supply chain issues.
Insight #2: Profile of visitors
Consumers are eager to return to normal and resume pre-pandemic behaviors when it comes to shopping at malls and eating out. We assessed the customer profile of visitors seen at malls, restaurants, and grocery stores, Here are the key findings:
- Families enjoyed shopping at malls in Kuala Lumpur before the Lunar New Year.
- Consumers from affluent families enjoyed eating out at popular fine-dining Chinese restaurants in Hong Kong, comprising 48% of the visitors.
- Consumers from the older age groups also enjoyed dining out at Chinese restaurants during the holidays in Hong Kong.
- Visitors to shopping malls in Singapore were likely to be from higher-income groups and belong to young professionals or affluent family categories.
Insight #3: Footfall of Chinese Tourists
The timeline of this study covers the reopening of domestic borders in China, so we assessed the recovery of visitors from the Chinese mainland in Hong Kong.
Graph: Percentage is calculated keeping the average footfall for the entire period as the base
As seen from the graph, a steady stream of visitors from the Chinese mainland visited Hong Kong, picking up from week 2 and reaching peak levels during the Lunar New Year. The numbers are expected to increase as the summer holidays approach. While recovery might not reach pre-pandemic levels, Hong Kong can still expect an increase in visitors fuelled by pent-up demand and favorable policies from the Chinese government to aid recovery.
Outlook
Southeast Asian markets can expect China’s reopening to significantly boost recovery. Tourism-related sectors such as hospitality, restaurants, and retail can especially benefit from the return of Chinese tourists. Apart from leisure travel, Singapore, Hong Kong, and Kuala Lumpur will also benefit from increased business travel with the return of events, conferences, and exhibitions.
This growth is likely to accelerate due to recent policy changes. On March 10th, 2023, the Chinese government issued a circular that permits travel agencies and online tourism companies to offer outbound group travels and tours for Chinese citizens to countries in Europe and South-East Asia. The government also relaxed another restriction by resuming accepting visa applications from foreigners, ending cross-border travel limitations from the Zero Covid policy. The U.S. CDC also rescinded the special Covid-19 testing regulations for travelers from China and its administrative regions on March 10, 2023.
Watch this space for more data stories around recovery in key Southeast Asian cities, China’s reopening, and more.
How to rethink your media mix
First off, what is a media mix? Advertisers are constantly trying to optimize their campaign strategies, as well as their budgets. A media mix means harnessing a combination of different advertising channels for an ad campaign. This means prioritizing different media based on the return of investment.
Because of the restrictions on the use of printed flyers and the ever-evolving nature of technology, retailers and distributors are gradually being forced to rethink their communication strategies. This is particularly true given that today people are online more than ever and the internet is such a pivotal part of consumers’ daily lives.
Hybrid communication
What is the best strategy? The solution is to customize a media mix, by using a hybrid communication strategy including digital flyers and digital advertising. This provides the best of both worlds.
- Digital flyers are cheaper and reduce waste (the perfect communication advantage for a CSR strategy).
- Digital advertising means you can target specific profiles using analytics tools which track performance, which in turn allows you to optimize costs.
For retailers that still prefer the flyer format, online alternatives are available which allow them to effectively share a digital flyer and replicate the printed flyer experience by featuring a wide range of products. Advertising agencies such as Azira can create a digital version of a paper flyer.
Some retailers already offer fully digital flyers on their websites. Many state in their corporate social responsibility roadmap that they are aiming to reduce the social and environmental impact of their activities. For some, e-commerce developments have meant that they can have a catalog that is 100% online.
Finding your media mix
There is no perfect media mix. As we already mentioned, the choice of media used in a communication strategy depends on several factors, each of which is specific to the brand. A media mix will be different for every brand, depending on consumer habits of the target audience, the advertiser’s budget, return on investment and other factors.
Individual retailers can develop a strategy to suit their specific needs and objectives, whether national or local. Depending on this, some brands will adopt a specific strategy using online and/or offline levers.
What are the advantages of online advertising over paper?
With technological developments and evolving consumer behavior, marketers are including more digital activities in their media strategy. This is particularly true following the “Oui Pub” program, where it makes sense to use digital tactics to respond to environmental and financial challenges.
Optimizing print format for online
Digital flyers have their benefits, both for consumers as well as advertisers. Extra functionalities can improve the catalog experience. For example, interactive features can be added to advertising materials.
Retailers can use video to help get the message across and clarify what they are offering. This will increase conversion rate in the long run. The same applies for using links. An online version of a flyer can also link directly to products and guide the customer towards a potential purchase.
For redirect links, we recommend integrating CTAs (Calls to Action) which send the user to a navigation app that directs them to the nearest point of sale. Buttons with CTAs such as “Let’s go” or “Get offer” can lead them to the store. This type of functionality strengthens consumer engagement and also increases conversion rates.
Finally, digital format allows retailers to include more products without using more paper. You can include a wide range of products, to demonstrate to customers the extent of your range and how you can respond to their potential needs.
Expanding your catchment area
The catchment area represents the perimeter from which the customers of a sales outlet would theoretically come. A catchment area would traditionally look at where consumers live, without taking into account where they, or people close to the area, travel (e.g., professionals commuting to work).
Direct mail, as we know it today, focuses on a fixed catchment area, focusing on where the potential customer lives. This concept is traditionally rooted in the distribution methods of a store manager, but can be complemented by analyzing online and offline behavior.
By combining online and offline data we are able to take into account more information to offer communication that is more personal to the consumer. Therefore, having geographical data (such as place of work or places they usually frequent), allows you to map consumer travel. This will shake up and reinvigorate your catchment area, which was previously focused only on where people lived.
The time and financial resources spent on mass mailing, based on a traditional catchment area, would be better spent on the customized communication processes described above. For example, consumers would receive personalized digital flyers, referring them to the nearest store through CTAs.
Digital flyers allow you to boost and broaden your catchment area. The physical time and cost spent on mail marketing are reduced with digital flyers and targeted to the right people based on their travel habits.
Tracking performance
With mailbox flyers you are unable to accurately measure performance. After sending a flyer, it is generally difficult for an advertiser to calculate their return on investment. How many customers really visited after receiving the flyer? Did they already plan to stop by before seeing the flyer?
You don’t know your real conversion rate. Online campaigns can be measured much more accurately, especially by monitoring the click-through rate. You can also use tracking UTMs in your flyer links, so you know the exact number of people that have clicked on your products.
If you want a more accurate idea of consumer response to your flyers, you can do A/B testing. Send two different versions of your visual to your contact list. See which gets most results and tweak your flyer as appropriate.
Digital flyers allow you to analyze performance, which in turn can help you develop a retargeting strategy. Knowing which profiles have already engaged with you allows you to target them with more personalized communication, optimizing the conversion rate for future campaigns.
Finally, you can track incrementality in your offline strategy. Also known as incremental measurement, this allows you to improve your media planning and optimize where you spend money. This strategy is very similar to offline A/B testing. It involves comparing the visit rate of group A who have seen one message, with group B who have not seen the message.
By having one group see the message and another not, you can calculate the potential increase in visits generated by the message you sent out. By comparing behavior of both groups, you have a better idea of how your campaigns are performing.
Post “Oui Pub” conclusions
The opt-in program is in line with current general attitudes and environmental awareness. It does not mean it is the death knell of printed flyers. As we have seen, hybrid marketing is a potential solution that can benefit retailers in a number of ways.
You can set up more repeat and profitable campaigns, while optimizing your ability to track performance in order to offer flyers that are tailored to your customers’ needs.
Guide : Transitioning to digital circularsA
