A BC Business 30 Under 30 winner, Alex is Co-Founder and CEO at Periphery Digital, a rapidly growing Vancouver Chinese marketing agency.
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In the year before the pandemic, Canada saw a record-breaking number of tourists for the third year in a row with over 22 million visitors. China was the third largest source of tourism in Canada just behind the U.S. and U.K. In 2018, the U.S. and China occupied the top spots for tourism spending in Canada. Chinese spenders reached levels similar to that of the U.K. and France combined, the third and fourth spots on the list, respectively.
And it makes sense: Wealth is an indicator of social status, a significant element of Chinese culture. And how does one go about displaying their wealth or evaluating the wealth of others? By purchasing luxury goods, of course. In 2021, spending on luxury goods in China rose by 36% in just one year, with some saying it will be the world’s biggest luxury market by 2025.
In 2020, the Covid-19 pandemic devastated the global economy. As many of us were directed to stay indoors by healthcare professionals, tourism was especially hit hard. In the first half of 2020, tourist arrivals fell globally by more than 65%, taking many jobs along with it. Canadian data says international tourism spend fell by a whopping 83%. Once the third-largest group, Chinese tourist numbers plummeted to eighth place in 2021.
But why?
Covid Zero
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As the rest of the world has learned to live with Covid-19 over the last few months, loosening gathering and travel restrictions, mask mandates and proof-of-vaccine requirements, China took a different approach. Hoping to completely eradicate the virus from existence, a zero-tolerance policy was put into place in 2022, effectively closing the country’s borders. This not only prevents tourists from entering but also inhabitants from leaving. Shanghai, China’s largest city, endured a two-month lockdown with repeated daily testing and people unable to leave their homes.
With outbreaks bound to happen wherever there are people, China’s response is an immediate lockdown. A recent outbreak in China’s southern city of Beihai resulted in mass testing of all residents and more than 2,000 tourists stranded.
With testing at this scale costing tens of billions of dollars, the effect on China’s economy is monumental, not to mention the fear of mass lockdowns disrupting daily life for the foreseeable future. It’s also noted that a “zero-Covid” policy makes China more vulnerable to severe outbreaks, with many elderly people still unvaccinated and others lacking boosters.
Impacts Beyond China
As some of the world’s biggest spenders—accounting for almost 20% of international spending and with the second-largest purchasing power in the world—“zero-Covid” in China has led to a large problem for other countries like Canada in losing a large portion of their annual tourism revenue. It’s been identified as one of the primary drivers of soaring inflation across the globe.
So what are countries to do?
Attracting Chinese Visitors
Despite the Chinese government’s decisions around Covid-19 and the perceived fear of international travel as a result, there is still a strong desire for it among Chinese citizens.
This presents an opportunity for tourism and retail marketers. If you strategically position your destination and products as worth the risk, you might just see some reward. But to attract the Chinese market, you must meet them where they’re at, on the networks they use.
This also goes for local Chinese populations. Chinese social media platforms like WeChat and RED are often still used by this group to communicate with their loved ones back home in mainland China as the only means to do so. Your local Chinese digital and OOH (out of home) ads can create buzz around your brand, which may then make it onto Chinese platforms, effectively reaching audiences back in mainland China.
WeChat, China’s “everything app,” is a great place to start. From online shopping to booking a taxi, sharing updates or paying for your dinner, WeChat has it all. It’s also the world’s fifth most popular social network just behind Instagram and comes in ahead of even the likes of TikTok. With 1.2 billion monthly active users, that’s nearly 15% of the world’s population.
On WeChat, you can buy media placements like banner ads that appear at the top and bottom of articles, Moment ads in the main feed, or write and design engaging sponsored articles called advertorials on publications in your niche. You can get creative with your strategy, too—host a giveaway livestream with influencers, leverage QR codes or create an interactive game.
RED (Xiaohongshu)
If you’re in retail, RED is a fantastic option—especially if your target audience is females under 30 with disposable income. RED is an up-and-coming social commerce site where users go to discover and share new products. You can partner with a KOL or KOC (key opinion leader or key opinion consumer) for sponsored product review posts that are indistinguishable from organic content to their communities of followers. Influencers with smaller followings are often overlooked but can be extremely effective. RED has cultivated an environment where young people turn to their peers for trusted product reviews rather than celebrities.
Facebook, Google & OOH
While you won’t be able to reach residents in China, you can reach Chinese locals in your area through Chinese-language digital ads on Facebook and Google. Just be sure to hire an experienced bilingual agency that considers cultural fluency. A simple direct translation via Google Translate rarely catches subtle language nuances, which can, at best, make you look ignorant and, at worst, offensive.
Reach Chinese audiences where they spend their time beyond computer or phone screens by running OOH ads in Chinese grocery stores, malls and magazines. This will build brand recognition and trust with the Chinese community through strategic media placements designed for a specific audience.
Final Words
If you’re strategic, deliberate and do your due diligence to familiarize yourself with Chinese culture, you could see fantastic results by integrating Chinese marketing into your repertoire. You may just play a small role in helping to reignite the Chinese international tourism spark!
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Author: Alex Wan, Forbes Councils Member
