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In 2013, Chinese outbound travellers reached 97.3 million, with 14 million more travellers than 2012. It is estimated to break the 100 million mark in 2014. Chinese outbound tourism is growing at an alarming rate, with a corresponding spend figure of $120 million USD in 2013, ranking number one in the world for spend by market. With this in mind, it is now vital that UK travel brands have an up to date marketing strategy for the inbound Chinese tourist. This presentation outlines how Chinese consumers plan their trips overseas and explores how Baidu's Travel product provides a powerful platform for Chinese travel enthusiasts to search, obtain and share travel related content pre, during and post-travel.
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Baidu Travel & The Chinese Outbound Tourist
Content
China’s Economic Growth
China Online
Chinese Traveller
Baidu & Baidu Travel
CHINA’S ECONOMIC GROWTH
Growing Wealth
China’s Economic Status
• China’s total population of 1.35 billion is more than – US, UK, Japan, Germany, Canada, Australia, Brazil, Russia and Indonesia combined
• By 2020, China’s urban population will be 842M vs. just over 1B for all the above countries combined
• China’s urban population will grow from 42% of total population in 2005 to 61% in 2020, with more growth expected as developed nations average 83%
• China overtook Japan to become the 2nd largest economy in the world in 2010.
• In November 2012, the Chinese government set the goal of doubling China’s GDP and per capita income of both urban and rural residents by 2020
Source: World Bank; retrieved April 2013CCCP 2012; Economic Observer 2013
China’s Economic RiseChina’s economic growth over the past decade and a half has been remarkable. Today, it is the world’s second largest economy and continues to enjoy a relatively high GDP growth rate.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
$1.20 $1.32 $1.45 $1.64 $1.93
$2.26 $2.71
$3.49
$4.52 $4.99
$5.93
$7.32
$8.23
8.40% 8.30%9.10%
10.00% 10.10%
11.30%
12.70%
14.20%
9.60%
9.20%10.40%
9.30%
7.80%
China’s GDP Growth, 2000 - 2012 (Trillions; %)
GDP (current US$) GDP Growth (Annual %)
Source: World Bank
Growing Wealth in ChinaThe middle classes are expanding beyond the larger cities more rapidly & in greater numbers than any market has ever witnessed. The number of Middle and Affluent Consumer HOUSEHOLDS in China will be the same as the US by 2020.
1
13
34
61
57
36
12
53
69
66
39
23
Household annual disposable income(USD) thousands
Upper affluent >$31.5Lower affluent $16 - $31.5Middle Class $9.5 - $16Emerging Middle $6 - $9.5Aspirant $4 - $6Poor <$4
Households MillionsHouseholds Millions
Source BGS Consultants
Urban household disposable income 2020Urban household disposable income 2010
China’s Affluent Class
Source: BCG, The Age of the Affluent, November 2012Note: Affluent is defined as having annual household disposable income between $20,000 and $1,000,000.
China’s Affluent Class in 2012: 120 million with purchasing power of $590 billion
China’s Affluent Class in 2020: 280 million with purchasing power of $3,100 billion (equivalent to 35% of China’s total consumption)
China’s Affluent Class will more than double in the next decade with purchasing power increasing five-fold
CHINA ONLINE
Channels
The world’s largest online economy
China already has the largest online population in the world at 618 million users. Astonishingly that’s only 45% of their population, so their capacity for growth is enormous
China USA India Japan Brazil UK Australia0
100
200
300
400
500
600618
245
121101
7953
2045
79
10.2
80
39
84 89
Online Population MMs
% of Population online
Or to put it another way…
China
USAUKAustralia
= 50 million online users
China’s Digital Credentials
• As of end 2013, there were 618 million internet users in China – the world’s biggest internet user population. The internet penetration rate has now reached 45.7%.
• There are more male internet users in China (55.9%) than female (44.1%).
• While nearly three quarters (73.4%) of China’s internet users are going online via their PCs, more than two thirds (69.3%) also do so from their mobile devices.
• China’s students represent 30.2% of China’s online population.
• The rural areas of China account for 26.5% of the total internet population, or 156 million internet users.
• As a guide, in recent years, China’s internet population has grown by approximately 30 million people quarterly (half the population of UK)
1,351,000,000
51% Urban
Total Population
Urban vs. Rural
618,000,000
45.7%
Internet Users
Internet Penetration
1,198,500
88.7%
Mobile Subscribers
Mobile Penetration
556,000,000
90%
Baidu Users
Internet Penetration
Source: US Census, CNNIC, Mobithinking, Baidu Metrics
CHINESE TRAVELLER
Growing Wealth
China’s International Travel Expenditure 2012
Increasing number of Chinese tourists traveling further
Chinese were the world’s biggest spending travellers in 2012 (over-taking the Germans)
Est. expenditure to reach $117.6 bn in 2013 with a year on year growth rate of 20%
2005 2006 2007 2008 2009 2010 2011 20120.0
2.0
4.0
6.0
8.0
10.0
12.0
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
Ch
ines
e O
utb
ou
nd
Exp
end
itu
re (
in U
SD
bil
-li
on
s)
Y.O
.Y G
row
th
Source: United Nations World Tourism Organisation, Baidu
Volume of Outbound Travellers
Source: United Nations World Tourism Organisation, Baidu
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Jan-March2014
10.5 12.116.6
20.228.9 31.0
34.541.5
45.847.5
57.4
70.3
83.2
97.3
112.0
26.4
2014COTRI est.
In 2013, Chinese outbound travellers reached 97.3 Million, with 14 million more travellers than 2012. It was estimated to break 100 million in 2014.
China Outbound Tourism 2000-2014 in million border-crossings plus COTRI Forecasts 2014.
Sources: COTRI, CTA
Market Value Today
Chinese travel market is currently worth $232 billion
China’s travelers estimated to take 200 million trips annually by 2020
Chinese tourists spent an estimated $100 billion in 2012, up $27.6 Billion from 2011
– Industry’s 17% annual growth over the next decade translates to… 10 million ‘first-time’ Chinese travellers every year for the next 10 years
– Or… 70,000 new Chinese travellers every day for the next 10 years
Source: HSBC 2013; UNWTO 2013
Why Target China?
800 Million Middle Class Chinese by 2030
• Rising incomes means more Chinese are looking to travel
• Greater number of Chinese traveling, taking more trips overall and traveling further
• Increased spending power means higher travel expenditures
• Growth of online in China as a resource and tool for travel seekers
Chinese Travelers to the UK
Source: VisitBritain.org
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130
50
100
150
200
250
$0
$100
$200
$300
$400
$500
$600
64
105 100 105
130
98 83
111
145
170
202
$125 $134 $127 $101
$149 $130 $109
$186
$245 $291
$493
Chinese Inbound Visitors to the UK and Expenditure, 2003 – 2013(000’s & GBP millions)
Chinese Visitors to UK Chinese Visitor Expenditure
The typical visit from China generated £1,680, almost 3x from the average market. London alone accounts for 44% of all Chinese visits and 47% of spend, making it the most important UK city for the Chinese tourism market.
Defining Trends
Source: HSBC 2013; UNWTO 2013
Source: China Digital Review, Aug 2014
Independent: 63% of China’s outbound now plan travel independently (up 10% from a year ago)
Sophisticated: no longer after the cheapest rooms, to reserve cash for handbag shopping, the discerning inbound now seeks out quality accommodation, and loyalty programs offering discounts
Experiential: Gen 1 shopping and Stonehenge, Gen 2 want meaningful experience and are receptive to being marketed to in Mandarin, with authenticity and passion
Online: All the time! Savvy marketers will provide content and next step options at various stages of the travel cycle: from wish list to post-trip.
80% research online to make travel plans, 53% (and climbing rapidly) book flights and hotels online, 91% use Social media during and post trip
Influencing Channels
Sharing experiences through social media is popular, especially among the younger Chinese. More Chinese are writing about their travel experiences through personal blogs as well as social media, either during the trip or after the trip.
Online sources are rated as the most useful source as travellers can obtain very detailed and comprehensive review and guidance from other experienced travellers.
Chinese predominantly turn to maps that they picked up at the destination for information. Other popular sources of information consulted are tour guides and online sources via either their mobile phones or other electronic devices
BEFORE TRAVELLING DURING TRAVELLING AFTER TRAVELLING
Chinese Traveller Pre-arrival Research
65%
Internet
51%
Word of Mouth
41%
Magazines
38%
Newspapers
37%
TV
For Chinese High Net Worth Individuals (HNWIs) in Tier 1, Tier 2 and Tier 3 cities, the internet is the most popular source of information. Women prefer the internet (71%) and magazines (45%)
Source: Huron Report Chinese Luxury Consumer Survey 2013
SILK CRM consumer insights interviewing luxury Chinese women shoppers
Women travelling abroad for the first time have between 2 to 30 items carefully researched and prepared on their list
Influencers on Chinese Travellers
Individual Chinese
travellers are most
influenced by Chinese
Internet/Social Media and
friends/family
Chinese are traveling more independently rather than on tour groups, giving them the flexibility to plan their own trip itinerary
• 60% of Chinese outbound tourists now prefer to travel individually• 74% of individual travelers are between the age of 25-44
Source: Hotels.com, 2014
Usage of Different Travel Booking Channels
EDM
Credit Card Club
BBS
Travel Reviews Website (daodao / tripadvisor)
Travel Channel or Portal
OTA (e.g. elong / agoda)
Vertical Search Engine (e.g. Qunar / Kayak)
General Search Engine (e.g. Baidu / Google)
0% 10% 20% 30% 40% 50%
11.00%
15.70%
27.00%
27.70%
35.50%
39.60%
41.70%
46.50%
Source: Baidu, World Travel Mart
Online Travel Booking Market Scale
2009 2010 2011 20120
20
40
60
80
100
120
3036
42
112
Online travel booking usersMillions
Country Penetration Rate
United States 40%
United Kingdom 47%
India 20%
Brazil 25%
China 7.9%
• 2012 was the tipping point when online travel booking spiked in China
• By 2012, China had more online travel booking users than the United States (112 million).
• The current penetration rate is only 7.9%, which indicates growth opportunity ahead
Source: Baidu, World Travel Mart
UK Visa Status
Source: HSBC 2013; UNWTO 2013Source: Evening Standard, Sep 2014
Some 90% of Chinese tour groups omit UK from European tours, resulting in £1.2bn lost revenue each year
UK losing out to France and Germany because we are not currently part of the Schengen agreement
BAIDU
China’s largest digital publisher
China Travel Search Users’ Intentions
9.4 Billionmonthly travel-related keyword searches on
Baidu
Baidu is China’s equivalent of Google…Baidu is the major search engine, and largest digital publisher, in China with over 556 million regular users. That’s the equivalent of all the Google users in Europe and Asia combined.
Population of China: 1.35 billion
Online Population: 618 million
Baidu’s Reach: 556 million
What can Baidu offer?
Loyalty 忠诚 Purchase 购买Consideration 考虑Familiarity 熟知Awareness 知晓
• Content Network
• Hong Media
• Targetisement
• Brand Zone• Keyword Search (SEM)
• Baidu Wireless (mobile)
Brand Landmark
Search Network
Baidu’s search results look very similar to Google’s.
The results at the top / centre of the page are “exact matches” to the keyword that the Baidu user has typed in.
Results below the red box are organic search results.
The red box on the right shows “broad matches” to the keywords that the Baidu users typed in.
A brand’s position on the page is influenced by their CPC (the highest bidder for the keyword appears at the top of the page) and the website quality score.
The quality score refers to how relevant Baidu feels each keyword is for your client’s website. If a keyword appears many times in a website and meta data, it will have a higher quality score.
If you’re the highest bidder but have a low quality score for a given keyword, you won’t be given the top paid search slot.
Just like on other search platforms, Baidu don’t publish the exact algorithm that gets a site the top advertising slot. We do know however that it’s a combination of quality score and maximum keyword bid.
Brand LandmarkUsing the keyword – Luxury Watches
Brand Landmark average CTR 2-3%
Brand LandmarkCalifornian Tourist Board
Brand ZoneThis successful campaign from Burberry includes logos, videos, animated gifs, multiple product photos, latest news, deep links and social media. (Translated from Chinese using Google Translate)
Brand Zone – Desktop
Sands Cotai Central – Hotel Group, Macau
Brand Zone – Video & Knowlege
Sands Cotai Central – Hotel Group, Macau
BAIDU TRAVEL
Targeting Chinese Travellers
Baidu Travel
Baidu Travel
• 212 Million travel related search queries exceeding 9 Million every month.
• travel.baidu.com was launched in 2011, taking advantage of Baidu’s big data resource
• Powerful platform for Chinese Travel Enthusiasts
• From June 2014, Baidu Travel is available to non Chinese brands to advertise on
• China Search International have rights to sell Baidu Travel in the UK
Channels for Obtaining Information
If your customer is online in China, they’re on Baidu!
Source: CNNIC: Chinese traveler’s behavior 2012
Enormous Reach
Chinese Outbound Travellers
97.2 Million
42.4 Million
66.0 Million68% use Online Sources
20,000,000
Page views/day
Baidu
Source: China Outbound Tourism Research Institution, 2014; UNWTC
Baidu Travel Channels
Baidu Travel has 7 Channels to influence audiences making travel decisions:
Homepage, Destination, Travel Note, Picture Album, Travel Plan, Shopping Mall, Promotion
Recommendation from past visitorDownload Travel Guidebook, Specialist travel magazine or newspaper
See downloaded PDFOnline guidesTour GuideDigital Maps
BEFORE TRAVELLING DURING TRAVELLING
AFTER TRAVELLING
Write review on Baidu TravelBlog about itPost on social networking siteShare photo
Baidu Travel - Positioning
“Unbiased destination reviews, photos and travel advices for
trips and vacations” “High quality content generated by travel professionals. Venturing
Somewhere New? Be Inspired By Baidu Travel!”
“See suggestions & recommended sights with
pictures posted by past travellers. And share your own
travel experience!”
Professional Generated
Content
Best Trip Advisor Active TravelSocial Media
Baidu Travel - PositioningSuggested Schedule
Place of interest
Food & Hotel
Transportation
Activity & Festival
Q&A + Tips
Baidu Travel - Mobile
Unique Visitors
6,000,000+
• As of May 2014, the number of downloads via mobile devices exceeded 40 Million.
• Time spent on Baidu Travel app made up 30% of total time spent on Baidu Travel services (PC+App)
• The monthly unique visitors of Baidu Travel app reached approximately 6 Million in Apr.
Active Visitors
1,100,000+
User Demographics
Domestic travel users on avg. have travelled 4.7 times in the last 12 months
Outbound travel users on avg. have travelled 5.4 times in the last 12 months
9,447 RMB average expenditure in each trip
Affluent
60% plan to make at least 1 intl. trip in the next 12 months
58% claim to be fluent or proficient in English
62.5% owns a bachelor degree and above
YoungElite
WellTraveled
Monthly Personal Income 8,114 RMB
Monthly credit card consumption is almost twice as much as the general online users’
The average car ownership for existing users is 1.4, the average price is 230 thousand RMB
Baidu Travel
Banner Standarddisplay
Impactfuldisplay
Interactive Campaign
ThemePackage
Q&AActivity
Destination Package
Destination OfficialExperience Pavilion
Mobile
APP Developmentand Maintenance
BRAND
DIRECTRESPONSE
Banner Options
Homepage Travel Plan
Shopping Mall
Picture Album
Promotion
Travel Note Detail Page
Destination Details Page
Baidu Travel offers a variety of banner placements including Standard Display and Impactful Display:
Destination Package
Banner Promotion For Q&A Activity
Special designed pagefor introduction ofdestination
Baidu Travel
In the UK access to advertising opportunities is only available from me!
Baidu Travel advertising is not available in China
Popular with travel and tourism brands for planning and sharing activity pre-, during and post-trip
Also popular with retail brands (at destination) e.g. products-in-store brands, retail outlets, and shopping destinations.
China Search International
Overview
We are Baidu’s International Partner, not an agency. That means our business model does not rely on charging management fees.
In fact – the only charge you or your clients will ever see from us is a 2.5% processing fee to cover our banking and foreign exchange fees. In essence we are paid by Baidu to sell Baidu.
With offices in Singapore, San Francisco, Sydney and London we’ve guided hundred of clients through the complex Baidu processes.
We’ve all worked previously at major brands / agencies in the UK, USA and Australia so we understand your requirements and the importance of managing your client’s expectations.
The result is that we’re well placed to help your clients launch on Baidu in the most cost effective and hassle free way.
Some of our clients
Thank you
Direct: 020 7193 8753
Mobile: 07900 692149
Email: [email protected]
Web: www.ChinaSearchInt.com
Matt Brown
UK Sales & Marketing Director