Every brand wants to tap into the Chinese mega rich. This demographic desires and can afford to travel to Paris, Los Angeles and New York for their shopping sprees. As a result, I have noticed a plethora of Chinese companies promising to deliver these people to retailers based in these cities. However many of these companies are scams and unable to deliver. Here are the five things to consider before signing on.
1. Validate their recruiting methodology. If they recruit on Facebook or Twitter, run in the opposite direction. This is because the Chinese government has banned Facebook and Twitter because they are afraid of anything that promotes the formation of groups. As a result, companies that claim to assemble a viable group using Facebook or Twitter are basically capturing Chinese people not living in mainland China.
2.Understand that Chinese people are extremely private. They are used to being persecuted for their religious and political beliefs. As a result, they only trust family members. Family is paramount and sacred. Everyone else is disposable. Therefore, they are not going to sign up on random tours no matter how great and lucrative they appear. Therefore, if these companies brag about their extensive advertising campaigns, you need to be aware that this will not be an effective recruiting tool.
3. Make sure that the company knows everyone on their recruiting list and has a direct relationship with them. The richer the target, the more secretive he or she is. The most effective lists are composed of true family and friends. For example, when I needed to understand the mainland China luxury market, I asked my Dad, who is working in China helping a government-sponsored State Owned Enterprise on wind farm technology, to help me recruit 500 newly minted billionaires to take my 112 question survey on their attitudes and usage of handbags, watches and fine jewelry. He was able to secure over 300 candidates who were willing to take my survey (in Mandarin) but only if I personally interviewed them.
4. Avoid participating in shopping events centered around the Chinese New Year. This is generally the worst time to attract the mega-wealthy Chinese shopper. Why? Because Chinese New Year is the time that Chinese want to stay home and bond with their families. It’s actually more effective to stage events around college/university events as many wealthy Chinese send their children to U.S. schools and are in the U.S. for back-to-school and/or graduation.
5. If your brand is not well known in China, do not participate. Chinese are very status conscious and only want goods that are desired and well known. Unlike the U.S., where discovery of small indie brands is an asset, the Chinese only want brands that their neighbors, friends and family want to possess. Therefore, at this time, brands that are well established in China such as Louis Vuitton or Tiffany will benefit more from these shopping events than beautiful but lesser-known brands such as J.Mendel and Loro Piano.