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How can UK retailers connect with Chinese shoppers despite the knock-on effect of the country’s zero-Covid policy for international tourism?

By: David Armstrong, Managing Director, PayXpert

Before Covid-19 hit, the volume of tourism from China to the European continent, including the UK, was quickly growing due increased personal income, improved experience for Chinese tourists abroad and attractive shopping prices. Since the beginning of the Covid-19 pandemic this has obviously ground to a halt and despite the situation improving in Europe and the US, or at least at a manageable level so that restrictions can be loosened, a zero-Covid approach continues in many parts of China. On top of this flights have had to divert around Russia since the start of the Russian-Ukraine conflict making the journey longer and more complicated. 

However, interest in European shopping, particularly British brands, hasn’t slowed. Interest has turned online. Intelligent retailers are finding ways to create a marketplace where they can sell to Chinese shoppers online. 

To give an example of Chinese interest in British brands, in 2020 it was reported that the value of goods sold by UK brands on Tmall and Tmall Global (Alibaba’s China marketplaces) had grown by 27% year on year. But how can British e-commerce companies reach Chinese customers when so many international sites are blocked? In fact, it is just a matter of adapting to the local shopping culture. 

In order to buy from UK retailers online Chinese consumers cannot simply hop on to the international website. In China, the internet is incredibly restricted. The country took control of internet access early on in the history of the technology. Since the late 1990’s there have been firewalls in place to limit the information that Chinese internet users can see online. Then in 2016, the Chinese government passed the Internet Security Law of the People’s Republic of China. 

In addition, China’s e-commerce model is very advanced and has high requirements for delivering its ultimate user experience. This targeted approach can only work through specialised social networks and customised sales channels such as “mini-programmes”. 

Adapting by riding the wave of China’s advanced e-commerce approach 

E-commerce is a very fast-growing sector in China and consumers are increasingly looking for more and more advanced shopping experiences different to those we are used to in the UK or Europe, with the “mini programme” becoming a normal way of shopping for Chinese consumers. This is a sub-app integrated within a social media application where shoppers can enjoy a personalised shopping experience. 

Foreign retailers wanting to reach Chinese consumers need to keep up with this new retail technology. Many major international social networks are blocked in China, as are e-commerce websites, so companies abroad need to work closely with Chinese social 

media players and payment innovators such as WeChat and AliPay to create shopping experiences that overcome the barriers of language and new cultural shopping habits. 

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Over the last few years use of Chinese payment providers Wechat and Alipay payment solutions made through smartphones using QR codes to connect, have exploded. The two apps together are forecast to reach a combined user base of nearly 2.5 billion users by 2025 and account for over 90 percent of Chinese mobile payments. 

Starting out as social networks, it is this walled garden approach that has made them so successful. To reach online shoppers from China, UK companies need to create their own Wechat or Alipay profiles that are secure within the social network’s ecosystem, in Mandarin and cannot be found through Google etc. 

E-retailers wanting to attract Chinese customers need to create mini programmes, social media zones that provide product information, a sales channel and then a platform where they can arrange delivery of the product to China, taking care of appropriate invoices forms, customs and excise paperwork, making the whole process easy for the customer encouraging repeat purchases all in Mandarin. 

New cultural traditions moving from off-line to online 

Obstacles and challenges always push progress. The Covid-19 pandemic has accelerated innovation in a whole range of technology and adoption. In the fintech sector technological solutions flourished so that international business could continue to function, so that despite borders, trade could continue to flow and be as cost-efficient as possible to keep the world turning. 

2021’s Beijing Winter Games’ push of the e-cn digital currency gave a lot of food for thought about innovative payment methods from China. This move from the state to promote adoption of its currency is a reaction to the huge popularity of Alipay and Wechat Pay. It is clear that this will be the next frontier for payment technology so UK retailers will need to prepare for this next stage if they want to keep the interest of Chinese consumers.

Biography David Armstrong 

David is an experienced payments professional with 25 years of solid experience in both the online and retail industry. His skills include coaching, payment processes, relationship management with card schemes, processors, acquirers, payment gateways for cards and APMs. Bringing top management expertise and a strong payments industry focus, David worked in senior positions for companies like Lloyds Cardnet, RBS, Worldpay, Travelex and in Discover Financial Services. More recently, his talents served Secure Trading, Global Collect, as well as Global Blue, in an executive capacity.  

David has been Managing Director at PayXpert for two years heading up its UK activity at its offices based in Canary Wharf, London. 

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