“In 2018, 90.000 Chinese came to Iceland at an average of 6 overnight stays without any direct flights. From January to October 2019, there was a 12% increase even after WOW Air ceased operations. Chinese tourists are the biggest spenders globally (overtaking US travellers in 2012). This is an excellent niche to cater to in Iceland. But Chinese do not use Visa or MasterCard, Google, Facebook, YouTube, Instagram, or Snapchat.”
How can Icelandic companies best reach out to Chinese consumers – whether as tourists in Iceland or for exports to China?
Nordic Business House and ePassi held an exclusive event in Iceland for top tourism and brand companies at Vinnustofa Kjarvals to provide an overview of Chinese Marketing and E-Commerce with key speakers.
Marketing and E-Commerce in China, Chinese Ambassador to Iceland Zhijian Jin
Today, there are approximately 400 million “middle class” Chinese, which is forecast to grow to 600 million in the near term. Yet only 200 million are passport holders. It is expected that outbound tourists will grow from 149.72 million to 260 million by 2030. And China has the largest e-commerce market to account for 55% of global e-commerce retail sales in 2019.
Iceland has unique opportunity to focus on this segment with the only free trade agreement signed with China in Europe, the growing number of Chinese tourists to Iceland and Letter of Intent on cooperation signed between Promote Iceland and Tmall Global for e-commerce.
Welcoming Chinese at Keflavik Airport, Commercial Manager at Isavia, Gunnhildur Erla Vilbergsdóttir
ACI (Airport Council International) predicts that the biggest growth in air traffic will be the Chinese traveller due to strengthened economy, a more prosperous nation and decreasing airfare. 90.000 Chinese travelled to Iceland in 2018 – 17-fold from 2010.
“But what do we know about Chinese tourists?” was a key question asked by Gunnhildur. What she has learned is:
- Chinese travel to shop where 32% of travel costs are spent on retail goods
- Cultural differences in buying behaviour, where they seek offers, making good purchases and want a good buying experience
- Limited understanding of English
- Increasing trips to Europe
What has Isavia been doing so far to focus on the Chinese traveller to address their requirements?
They started by understanding Chinese buying and servicing needs. Isavia was the first entity in Iceland to work with the merchants to implement Alipay with ePassi just in time for Golden Week 2018. For one of the merchants on the first day of launch, more than 25% of their turnover was with Alipay without any signage at the airport. For popular stores with the Chinese, the Alipay spend is more than double than for those who pay with regular credit cards.
“For one of the merchants on the first day of launch, more than 25% of their turnover was with Alipay without any signage at the airport”
Since then, Isavia has held advertising campaigns at the airport for key Chinese holidays: Chinese New Year and Golden Week. For the Chinese New Year 2019 campaign, they had a 500% return on investment.
Providing better service and understanding culture is also key. All airport and merchant staff have received intercultural and sales training.
Lastly, Isavia wants to improve the Chinese traveller’s overall experience at the airport and recently launched its own WeChat and Dianping pages with Nordic Business House. They provide practical information to help with travel, information on tax- and duty-free shopping, food offers with a wide variety of pictures and the future possibility of direct contact and sales.
The Chinese customer is the best brand ambassador once they travel home. It is key to use their platforms of choice and continue the conversation with their recommendations, sharing of articles and as future online buyers.
More happy, more welcome and more prepared
The feedback from the sales personnel has been positive with the Chinese after the introduction of Alipay and actions taken by Isavia. The Chinese are very happy to see the Alipay signage and feel welcome. The intercultural training has helped staff to understand the various behaviours to better service them. And the Chinese come more prepared – they know where they can find the products to buy and get the best prices at Keflavik airport.