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China’s Mass on the rise

Newsdesk by Newsdesk
Tue 27 Jun 2017 at 10:39
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Among the most intriguing panels at July’s World Executive Summit in Barcelona will be a presentation by Galaxy Entertainment Group Chief Marketing Officer Kevin Clayton titled “China’s Mass on the rise.” IAG spoke to Mr Clayton in advance about this vital segment of the global gaming and tourism market.

Inside Asian Gaming: Can you discuss the rise of the mass market in China? What’s driving it and how significant is it?

Kevin Clayton: We must all be aware by now that China is the largest outbound tourism market and continues to grow. With over 122 million outbound travelers spending a reported US$261 billion, it’s astounding to think of the impact these changes in China have had on Macau. With the expansion of international quality destination resorts, it’s also worth considering the role the concessionaires in Macau may have played in expanding the horizons for many of these tourists.

I’ve been in Macau now for the past decade and witnessed such a material change in how the Chinese consumer selects their destination, what they seek from a resort destination and the products and services they consume during their visit. Like many other markets and product categories, the consumer matures, becomes more discerning and appreciates the finer points in product quality and service. Therefore, standards have risen throughout together with consumer expectations.

“I’ve been in Macau now for the past decade and witnessed such a material change in how the Chinese consumer selects their destination, what they seek from a resort destination and the products and services they consume during their visit.”

IAG: How is this impacting tourism in Asia and further abroad? More importantly, how has the evolution of the Chinese tourist and their increasing willingness to explore further afield impacted Macau?

KC: Regional competition in both resorts and gaming categories has increased over the past few years and this is likely to intensify. Macau must remain fresh and attractive but forecasts suggest regional tourism growth will more than compensate for any additional offerings. As the Chinese consumer looks further afield to international destinations, it’s important to remember there’s a quantum of frequent travelers in Asia Pacific that prefer the convenience, attractiveness and comfort associated with the many Asia destinations within four to five hours’ flight time.

IAG: What does this growth mean in terms of resorts and gaming?

KC: It’s very exciting that Macau is geographically so close to a number of burgeoning middle class markets that will most likely fuel outbound tourism growth over the next few years. Macau and each of the concessionaires must therefore continue to communicate their attractions and attractiveness, resulting in Macau being a preferred destination in Asia.

IAG: How has the Chinese shopper changed?

KC: There are now many more shopping destinations in Macau battling for their shopper share of time and wallet. The recent downturn in Macau resulted in not only gamers but shoppers also tightening their wallets and some exiting the market altogether.

In my opinion, retail malls in Macau were forced to work much harder at marketing their retail destinations and promoting tenant brands. The retail consumer is made up of very different value segments, each segment wanting something quite different, but the emergence of the VIP shopper has certainly raised the bar with each brand realizing there can be no substitute for quality service.

The opening of new properties has also resulted in a more diverse selection of retail brands on offer in Macau, expanding the offering to both the middle and luxury customer segments. To differentiate, increasing competition for share of wallet generally leads to malls either promoting more frequently or stepping back to better understand the customer journey and how this could be enhanced – the latter generally being more profitable and sustaining.

IAG: What is the mass market tourist looking for that VIP and Premium Mass may not be? How does this impact upon operators?

KC: Mass market tourists are drawn to unique photo opportunities that may not attract the premium customer. Resort brands seek to differentiate in a number of ways, whether that be food, shopping, entertainment or promotions. What the customer sees through bought, earned or owned media, they then decide whether you are worth a visit.

Having an attractive property of unique design, for example, certainly attracts attention in China and in other markets. Iconic architectural or product features get shared through social media which can become a hugely effective and cost effective way of marketing the brand. The market is very dynamic, so listening to the customer, understanding their needs and making changes to maintain your attractiveness is a critical part for any resort team.

“Iconic architectural or product features get shared through social media which can become a hugely effective and cost effective way of marketing the brand.”

IAG: What role do millennials play now and in the future?

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KC: Everyone is talking about millennials and their importance in a growth agenda. Not unlike any generation before them, these consumers have different characteristics from the age that went before them and magnified by early adoption of technologies. In my opinion, we should all adopt those technologies that enhance the customer experience and in return we will also make our resorts more attractive to millennials.

IAG: Galaxy has arguably been the most successful of Macau’s operators in recent years when it comes to adjusting its offerings to appeal to the mass customer. What changes has Galaxy made to its offerings and marketing to achieve this?

KC: Through the leadership of Mr Francis Lui, the Galaxy Macau and StarWorld Macau leadership teams have embraced the principle of listening carefully to the customer and making continuous improvements. Mr Lui and the GEG team live and breathe “World Class Asian Heart” defining who we are and how we serve our customers, as demonstrated through the significant investment GEG has made in the customer in bringing to market additional restaurants, cafés, gaming products, customer services and in the training of our team members.

IAG: How does the mass market consumer outside of mainland China compare to China’s mass market and are different considerations required to attract this broader audience?

KC: Naturally, there are regional cultural differences and preferences that must be accommodated in a resort to attract these customers. Food and languages are the obvious considerations and as such a team must bring these into the mix. Reaching these consumers also requires a presence in market and as such an investment must be made in both sales and marketing.

IAG: How will this gradual shift to mass impact the offerings we might see in Japan’s IRs in the future?

KC: I’m not presently involved in our Japan related IR activity but it certainly looks a very exciting opportunity. Having been involved in a pitch for a Singapore IR license, it was vitally important to think and act local by immersing yourself in the local culture, have an acute appreciation of consumer preferences, be innovative in delivering something truly unique and partnering with the Singapore government in realizing their objectives.

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