The Chinese outbound travel market is back in business and on a clear growth path. Developing this source market seems more crucial than ever, but what is the best strategy suitable to your product and resources?
As a long-distance market with many market specific challenges, traditionally the B2B approach is most often applied. This means designing your strategy with intermediaries and distributors in mind, using established B2B tools such as travel trade fairs, workshops, sales calls, roadshows, product trainings, FAM trips etc.
Another approach is B2C, essentially meaning directly engaging end-consumers, for example via promotion events, consumer media visibility, digital campaigns, social media presence, special B2C offers etc. Since this allows direct and unfiltered interaction taking the intermediary out of the equation, it can be a very attractive option but also has its own challenges and limitations.
In practice, very often both approaches are used in parallel with destinations and suppliers engaging in both B2B and B2C activities. Ideally this happens with clearly aligned strategic goals and each approach serving a well defined overall purpose.
Whether B2B and B2C can go together well, very much depends on a smart and comprehensive strategy. This is especially true if B2C direct sales and e-commerce are involved, since there is a risk that your B2B distributors will be unhappy if you approach consumers directly, thereby potentially impacting your partner’s own sales efforts.
To add to the confusion, there are more and more players in the markets that don’t really fit in only one category anymore. Examples are OTAs that offer so called semi-FIT packages, digital influencers who have added e-commerce capabilities to their channels, or new non-traditional operators such as clubs or associations serving special interest groups and communities.
So how to decide your approach and strategy then?
World Hospitality Alliance is a global network of experts, who have worked on the ground in various markets on a daily basis for many years, and who can therefore provide you with insight, advice and practical solutions based on their vast experience working for different clients. For the Chinese source market, here is a checklist with 10 questions designed to help you find your specific approach.
Checklist: Top 10 considerations
1/Audience – Do you have a clear picture of who you want to reach?
Who are the guests you have in mind and what do you know about them? Will they most likely travel in larger groups or as individual FIT? Are they already aware of you and have a certain idea of your offer or are you starting from zero? Where can you find them, how can you interest and convince them? What or who are they influenced by? If they eventually buy your product, will they blend in with existing guests or feel like outsiders potentially facing conflicts of interest? Will you best engage them B2B via intermediaries / distribution partners or directly through B2C activities?
2/Goals – Are you clear on what you wish to achieve in the market?
Why do you wish to attract these guests? Is it to make use of capacity during off season or are you wishing to diversify markets and risks? Is this done to create new revenue or also to evolve your offer and maybe bring it to more international and sustainable level? What return on investment do you expect? How important is short term revenue, how important are long term goals such as branding, image building and positioning? What role can B2B or B2C activities play in achieving these goals?
3/Stakeholders – Are your vision and goals shared and supported by your stakeholders?
Who are the stakeholders on your side who influence how the product looks like? What resources are available to you, how much time will you be given to succeed? How will that be evaluated? Would these stakeholder be willing to listen to you and your learnings in the market? Are there any other potential stakeholders to be considered, whose support you will need eventually? Are all of them aligned in their understanding and expectations, especially in regards to B2B and B2C activities?
4/Product – Is your product already suitable for the market and could it be adapted?
Hopefully your product will be suitable for the chosen audiences right at market launch, but there is a chance that you need to adapt it over time. If that happens, are you able to influence the offer and make changes to the product? What are the technical, legal and logistical challenged you need to overcome then? Which product is designed for which audience and under which terms? How and where do you launch it? Do you maybe need to keep market segment separate for that? Can you differentiate between B2B and B2C offers, so that your distribution partners still have an incentive to sell them?
5/Resources – What will you need, who can help you and what is their role?
Backed by your stakeholders, what resources are at your disposal? How likely is it that you have these resources available next year and the one after? Who can help you with advice, data, research and tools? What resources do you have in the market in terms of partners and representation? How sure are you about your their competence when it comes to B2B or B2C? Can they actually deliver what you need for your strategy to work? How clear and transparent is their role, do you see any potential conflicts of interests?
6/Consistency – Can you allow the market sufficient time to know and trust you?
Introducing a product or brand is a long-term process. Building relationships, mutual understanding and trust requires time – especially in a long-distance market. With a unique, game-changing product this process might go faster. However, it is more likely that you may face strong and well-established competition, and that your B2B partners will need some convincing to try out something new. To what extent can you focus on their individual needs and ultimately earn their trust and loyalty? How can you develop the market in a consistent way?
7/Learnings – Will you be able to develop insights, make mistakes and evolve?
Even with the best strategy some activities may not work as well as expected – or even turn out to be outright wrong. In a market as diverse and dynamic as the Chinese, it is important to try out things and accept a certain risk every now and then. If you haven chosen good partners in the market this risk can be reduced, but still – you need to allow yourself some learnings over time. Will this be accepted and supported by your stakeholders? How can the pressure to achieve quick wins be balanced with a strategic development? What insights can you gain through your B2B or B2C activities?
8/Evaluation – Are you clear on how to measure progress and success?
Setting the right goals from the start is crucial, since it is difficult to change course afterwards. What are the quantitative and qualitative goals you wish to reach? Are they understood and supported by your stakeholders? How do you measure them, what do you need to prove their effectiveness? How can you evaluate B2B activities, how B2C activities? Is it only the achieved sales and revenue, or also the expansion of contacts in your database or the increase in public visibility that matter? What about media remarks and ad value, what about digital views and interaction? And if you cannot measure directly, are there maybe other indicators that show and demonstrate the development?
9/Strategy – What is your specific approach and could you adapt it, if needed?
Based on all these considerations, which very likely still do not cover all aspects you need to be aware of, can you formulate a credible and promising strategy and a market approach? Is there data, research or experience that back it up? If it does not work out as expected, will you know why and will you be able to make changes? How will this be seen among the stakeholders and how can you convince them? Resulting from this, how is your individual mix of B2B and B2C activities and what role do each of them play?
10/Sustainability – Once you have found the right mix, can you maintain it?
It takes quite some effort to find a successful strategy. Once you have found your own winning formula – is the return on investment good enough to continue your efforts over longer period? Will you be able to maintain your business or even expand it? Are your B2B and B2C activities aligned and sustainable? The competition does not sleep, so will your existing resources be sufficient or will you need more? Experience shows that long-term, sustainable success in China is usually not achieved overnight and requires a continuous effort. Once you know how – will you be able to keep at it?
To illustrate above points, here is an example from real life:
For several years, we represented a client that is best described as an mountain resort and outdoor destination. The original task given lead to a B2B sales approach, supported by B2C activities that had a focus on branding and image building.
While the B2C activities were successful from the start, the B2B approach did not work very well. Although extensive and thought out efforts were made in line with the chosen B2B strategy, and even though many attractive packages were launched in the market, the selected distribution partners could not sell them successfully.
Why is that, you ask? Because it turned out that the audiences most interested in such an outdoor resort destination knew much more about that specific topic than the selected B2B distributors. The distributors simply did not have the level of know-how, understanding and attention to detail expected by the consumers – so why then go through them at all?
This lead to an adaption of the B2B strategy allowing to develop completely new distribution relationships – in this case with very specific special-interest groups, such as local communities, digital platforms and trusted influencers. It was a tough lesson and required substantial efforts beyond the traditional distribution ways. It also needed a lot of research, creativity and persistence, but in the end it worked – and also in a way where B2B and B2C were fully aligned and in synch again.
Thanks to the long-term view of our client, as well as the mutual understanding, support and trust between us, this adapted strategy worked out well, and today that outdoor resort is very well positioned and established in the market – it can certainly be called a success story.
Having said that, if the strategy had been clearer and more informed from the start, including the role of B2B and B2C activities and partners, the whole process could have been much shorter and efficient – hence the proposed check list shared with you here.
Summary
When developing your individual strategy for the Chinese market, it is important to be clear about your audience, your goals, your stakeholders and your product. It is also crucial to know what role B2B and/or B2C activities should play. This allows you to define your approach and the resources needed, so that you can engage the market with consistency, allowing for a steep learning-curve and meaningful evaluation, ultimately leading to a sustainable business development.
Talk to a local expert
While this checklist is designed for the Chinese market, it may also work well for other source markets. Why not get in touch with one of our regional experts who know the market and know who to talk to? They can tell you how to position your product, what the challenges might be, where and how to get active – or in other words: they can advise you on designing a strategy that suits you and offers realistic potential for success.
Oliver Sedlinger