Understanding variances in consumer behaviour and loyalty is the main obstacle to a Western brand’s success in the Asia-Pacific market. Big companies that have been serving the European or US markets for decades frequently discover the hard way that their tried-and-true marketing strategies don’t work in the Land of the Red Dragon. The same is true for loyalty programmes in China: you can only compete with domestic firms’ loyalty programmes by adjusting to local norms. Particularly considering that the country’s market for loyalty programmes would grow from $15.7 billion in 2021 to over $29 billion by 2026.
China is considerably more advanced than Westerners in terms of mobile engagement than marketers may anticipate. They set an example for the rest of the world by living in a genuinely mobile-first environment.
So get ready because this guide will not only highlight the key trends in customer retention but will also examine the characteristics of the top loyalty programmes available in China.
In China, what Does Brand Loyalty Mean?
China in particular has had a dramatic rise in prospects over the past twenty years in terms of both goods and services. Due to improved travel and eCommerce opportunities, Chinese consumers have increasing access to Western brands. Not to mention that established Western brands are making efforts to establish themselves in the nation. As a result, a country with enormous shopping potential finds itself in the unique circumstance of only recently adjusting to having a wide selection of goods from the US and Europe. As a result, the idea of brand loyalty to Western brands is still in its infancy.
The majority of marketing channels that are well-known in the US or Europe also exist in China, which is a key lesson to be learned from this movie. WeChat, for instance, is more widely used than Facebook and has applications besides networking, such as helping people find products and making online transactions. Additionally, the nation has its own specific social media platforms, including as the social eCommerce app XiaoHongShu (Little Red Book), which focuses on product reviews. Marketers who want to increase brand loyalty in China need be proficient on these platforms if they want to reach a large audience.
Understanding these platforms is just the start; the true challenge is mastering communicating on them. Simply translating your Western marketing tactics is insufficient and a trap, Dolce Gabbana already stepped into a few years ago.
Retention of Customers in the Chinese Market
For the majority of Western companies and merchants, the Asian market is still unexplored territory due to the difficulties, but not for much longer. The window of opportunity to seize brand loyalty’s youth and create a footprint in China and Asia is quickly closing. The figurative slice of the pie will get smaller as more people join the game.
Western rivals may not be your biggest concern, though, as China also has its own brands. Homegrown companies have an edge since they are more familiar with the market than everyone else, which makes the rivalry more ferocious.
7 Strategies for a China Loyalty Program’s Success
Now that the overall attitude toward loyalty programmes in China has been established, it’s time to examine the features and tactics you should employ to win over the Chinese audience.
Visibility
The market for loyalty programmes is very competitive for people’s attention. Companies spend a lot of money and time marketing their reward system as a direct result. If you intend to introduce your own programme, be sure to make a big splash and promote it widely, especially on WeChat.
However, marketing is not the end of visibility. Having a distinct value proposition is highly valued by Chinese businesses. They also aim for simple registration, providing users the option to sign up with just a few clicks and finish filling out their profiles afterwards. Later, they remind subscribers of the benefits with routine push notifications.
Tiers
As was already said, tiers are now considered typical in China. There, tiered incentive schemes are handled differently, which is something to be aware of. Most significantly, each tier bracket is made to appeal to a particular customer base.
In the West, higher levels often simply affect the benefit’s dollar value, with a few enticing benefits saved for Platinum members. In order to entice members, the lowest tiers in China frequently offer gamified benefits like lotteries. Due to members’ demonstrated deservingness at this point, mid-tier prizes introduce discounts. High-tier loyalty programme members continue to receive the greatest, most exclusive advantages, such as early access.
Experienced Benefits
Chinese clients have high standards when it comes to rewards. They initially anticipate little rewards from the minute they sign up for the programme. As an aperitif, the majority of retailers in China provide tiny product samples. People can experience the benefits programme in this way. Others offer discounts that are negligible enough not to affect their profit margins while yet being kind to their clients. Others may still demonstrate their thanks by giving you special treatment.
Subscription-based Services
In China, best-in-class reward programmes frequently incorporate subscription-based models into their system, in contrast to the US where very few firms (except from a few noteworthy instances, like Amazon) experiment with loyalty programmes that are subscription-based.
A hybrid-style structure is the outcome. Consider the Chinese childrenswear store Kidswant. The company’s loyalty programme offers an open to all members free portion with eight tiers. However, there are two subscription programmes that provide qualifying members bonus discounts and gift boxes (one for expectant women and another for families).
Personalization
Coupons in Chinese loyalty programmes are highly influenced by consumer behaviour. This is because the business invested in gathering user data. Using the member’s past purchases, user ratings, and product preferences, they can tailor their products and push various offers and content.
WeChat is a case in point in this regard. Based on customer activity, members frequently see a completely different offer feed on their social network profile than their friends. In China, personalisation goes so far that, when you call customer support, you will be connected with store employees depending on your location information.
Gamification
It is crucial to have a presence on WeChat, and this cannot be emphasised enough. WeChat is more than simply the Chinese version of Facebook; users can pay with their account, order a taxi, watch live events, and all of the main Chinese firms sell their goods directly through the app. Members also receive tailored product feeds based on their past purchases.
Of course, there are further strategies for making rewards more engaging. We examined a company that included a digital crane game in its programme, providing players with a distinctly arcade-like experience, as part of our examination of the customer lifecycle.
WeChat loyalty programmes
By developing a mini-app for WeChat, you may expand your loyalty program’s functionality to the largest social network in China. You may go all out because members won’t need any guidance because the Chinese public is very accustomed to using the platform’s features (such as recommending friends, redeeming loyalty programme rewards, and sharing product pages for benefits).
Get going on your trip to the land of the red dragon.
Although it is a difficult undertaking, building brand loyalty in China is definitely doable with the appropriate approach. And if you do it correctly, your bottom line will undoubtedly significantly improve. Feel free to schedule a demo or include Antavo in your loyalty programme RFP if you are up for the challenge and curious to learn more about the capabilities that we have to offer as a pure-play loyalty provider.
In the interim, we encourage you to read our guide to reward systems to find out more about developing a cutting-edge loyalty programme.