Loyalty Management in China – Internet & Luxury Industries

In a crowded marketplace where firms compete for the same customers, it’s become hard to stand out. Consumer definitions of value and loyalty are different according to the location and period. Strategists ask marketers to develop loyalty management building profitable relationships with all customers and a higher attention towards best customers.

Loyalty Management in China is not a mature market contrary to the United States and Europe.

China, the country in the middle of the world, is a potentially lucrative and so far largely untapped resource of consumer data, one of the most valuable commodities in the marketing world.

The market is not very developed but it’s evolving rapidly. First, consumers are testing products and services. Next, a firm should be active to retain the new clients. Loyalty is going to be something that will rapidly become very visible.

Loyalty Management in China – Internet Industry

The strategy of the Internet industry is to take advantage of a high-growth area with a potential huge user base.

Once it has access to a base of consumer data, a company like Tencent, Baidu, Amazon China can use it anonymously to sell analytics about purchasing behaviour to other businesses.

Loyalty Management in China – Luxury Industry

The strategy of the Luxury industry is to establish a footprint before competitors. After developing very quickly in Tiers 1, and Tier 2 cities, luxury brands are running to smaller cities.

In the luxury industry, brand customers who use social networks like WeChat can be targeted for private sales – events that are made for them based on purchasing behaviour. If a customer receives an offer from Hermès for example, and then uses the invitation, that Hermès store pays a commission on sales to Tencent (WeChat owner)  and also covers the special arrangements on the offer, for the privilege of getting that consumer into its store. For this kind of customer, offer another luxury experience like a free glass of Champagne or testing other luxury products are a must.

Conclusion

Data is the new oil. As the Chinese market develops, the data accumulation and analytical insights that you collect can be very useful for your strategy of loyalty management and value creation in the long term.

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