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Hidden in Plain Sight: Deals Designed to Attract Middle-Income Chinese

June 2012

By Mike Finstad, Beijing,Shanghai

Shanghai is not the type of market where advertisers aggressively seek low-income, or frugal customers. Grandiose ads offering savings are not common, coupons are relatively meaningless and people don’t really talk about how much money they saved on their last trip to the mall. To be clear: the Chinese are savers. They are in fact some of the best savers in the world. But prominent advertisements appeal more to the desires of money, power and respect than they do to savings, discounts and low prices.

Nevertheless, as average incomes rise in China, so too does the desire to spend. Bargains, cost-effective alternatives and deals that attract middle-income Chinese are out there – hidden in plain sight.

Though online shopping has only just begun to get popular in China, traditional retail outlets are giving more and more of their business to their online counterparts. Tmall gives customers the chance to see items before they purchase, negotiate a price, or return products when they are dissatisfied. Tmall, Vancl and Suning are relatively low-cost value brands that have large shares of their revenue coming from their online sales. While Tmall and Suning have physical locations that customers can use for questions, or partial returns, Vancl is mostly virtual brand and one of China’s largest internet apparel companies. Even as people clamor over high-end apparel brands, Vancl offers attractive designs that feel young and cool. And their model taps into the average incomes of a younger generation.

The hotel and travel industries also offer attractive package deals for families. Since typical vacations are out of financial reach for most Chinese families, the Kerry Hotel in Pudong offers Family Staycations through the end of 2012. A fantastic property with almost endless family-orientated activities and options, the hotel too is looking to utilize its space at a lower price as the 2010 World Expo fades into memory.

China Airlines’ Dynasty Package, also targets families looking to save money. For under 3000RMB, guests receive airfare, three-day, two-night accommodation at a hotel, with a local tour. Much like the Kerry Hotel, the Dynasty Package isn’t readily advertised on television or radio ads, especially given the on-going political tension between Beijing and Taipei. But the deal is available and customers are finding it, hidden in plain sight.

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