iPhone officially launched in China – what does it mean to marketing travel to Chinese consumers?
By Jens Thraenhart, Chief Strategist – Dragon Trail (November 2, 2009)
Apple’s iPhone finally arrived at market in China last Friday (October 30, 2009) and is evidently selling fairly well, despite wallet-emptying prices. ChinaNews.com found about 300 people queued up to buy the device at China Unicom’s flagship store in Beijing. That’s far fewer than you’d find at an Apple (AAPL) launch event in the U.S., but the Chinese version of the iPhone is quite high, with prices ranging from 4,999 yuan ($730) and 6,999 yuan (about $1,025).
In any event, those higher prices and the device’s lack of built-in Wi-Fi don’t seem to be as much of a barrier as you might think. And if those issues do end up tempering sales a bit, well, perhaps China Unicom can make them up by poaching iPhone users from rival China Mobile. As iPhonAsia’s Dan Butterfield reported earlier this week, China Unicom is offering an amnesty to users of gray-market iPhones. “This amnesty program is designed to entice some 1.5 million grey-market iPhone owners in China to sign a contract and pop in a Unicom 3G sim card to take advantage of WCDMA 3G speeds and a variety of new ‘Wo’ 3G services,” Butterfield writes. “The ‘upgrade to 3G’ program is no doubt aimed squarely at the approximate 1,000,000+ iPhones now running on China Mobile’s EDGE 2G network.”
What does that mean to travel and tourism, especially to travel brands (hotels, tourist boards, etc.) that are planning to market to Chinese consumers. As I wrote in previous articles, many travel brands are still focused on traditional methods. Chinese consumers already heavily use the Internet to make their purchase decisions, while still using travel agents for final transactions for the most part due to convenience. Travel agents in China, for the most part, recommend travel packages that they have either known for years and offer them the greatest incentive, if the consumer has no specific destination or hotel in mind. This is why it is vitally important for brands to be top of mind with Chinese consumers BEFORE they contact a travel agency. Obviously, and engaging web presence is vital, and lots of travel brands are just starting to move into this direction. But the launch of the iPhone in China, and the already high adoption of mobile phone usage, will make it even more critical for travel brands to develop a digital strategy, that includes mobile and smart phones, such as the iPhone, in order to build and increase brand awareness.
As in the US and in Europe, the iPhone has been a catalyst for consumers to get information on their mobile 9smart) phone, I believe that in China this development will be even more powerful.
But what to do? Develop some quick and dirty iPhone Apps in Chinese? The opportunity in China is more complex and requires a more integrated strategy, starting with relevant content, and engaging web presence, starting with a social-media-ready website hosted in China, presence on Chinese social media sites, and then content and applications for smart phone – and last but not least, the smartest brand look at true convergence and connect offline with online. If it is bringing people together offline at events after they connected online, or driving online campaigns offline to travel agents with innovative incentive programs. Most importantly, the landscape in China is changing rapidly. Market knowledge is vital, and the right relationships are critical for success.
Source: Dragon Trail (November 2, 2009)
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Being iPhone and Apple user myself, Apple has been innovative in its product development and has created products that we never thought we would need. The price of iPhone and Apple products are wallet-emptying but they are luxury products and thus targeting at the luxury market.
Travel industry players who want to be one step ahead of the competitions are already thinking about how to maximize Apple applications and be cutting edge such as Four Seasons in the article of “Four Seasons in the palm of your hands – Free iPhone app” http://ow.ly/z5zo
In the near future, with more and more people using mobile phone to search the web and to do online transactions, the way to go is to develop relevant, eye-catching and useful mobile phone applications and making sure that the websites are already mobile friendly especially when targeting the Chinese market with its exponential growth of online population. (By June 30, 2009, the number of Chinese Internet users had reached 338 million, reported by China Internet Network Information Center (CNNIC) [PDF Report] http://ow.ly/z7hV ). Also there is an interesting comment by Google CEO Eric Schmidt “Five years from now the internet will be dominated by Chinese-language content”. (“Google’s Eric Schmidt on What the Web Will Look Like in 5 Years” http://ow.ly/xv7G )
Whilst talking about innovation and Apple, here is another article that I would like to also share: “Where is the Apple of Online Travel?” http://ow.ly/xxZz
@IrmaTjahjadi (http://twitter.com/irmatjahjadi)
Managing Editor
ChinaTravelTrends.com
First off, China Unicom will need to hit that 100,000 mark of iPhone selling to start as that was the number to compensate for the revenue sharing with Apple (might I add it is not cheap if you are paying for a two years contract, minus the WIFI feature).
Large travel industry will definitely have the advantage over smaller hotel, OTA, etc. I reckon CTRIP, ELONG should have their app for searching rate of airlines, hotels, etc (as well as managing points on the go). Hotels tycoon such as IHG, Starwood, Marriott should also have their iPhone app whether it is for the points or rate search will definitely expand the new frontier for them.
Although testing will need to be done on how Chinese people uses iPhone, but it’s definitely the tool for lifestyle and savy users.
Aside from this iPhone will also be the new marketing vehicle that is more effective than previous mobile marketing in China (such as SMS). It is more refined, more interactive, you feed live content via the 3G service. As well if you hit the high downloads, your app will be promoted to the recommended main page (talk about free advertising) and if it is really unique Apple might just create an Ad. for them, which normally they display on their already high traffic volume website, you never know if Steve Jobs is going to present it at Apple yearly keynot (talk about free publicity and advertising).
Ren Ren launched their iPhone application months ago and it’s work great, you have to give them credit for riding the wave before and getting it prep.
Although I’ve just recently checked China App store, and I do believe it is still in development and a gray area as well. But nevertheless we do not know how technology adaptation to China might swing, it might just work and opens up a new field of jobs for writing code for iPhone app (like it did in the US). One thing to note, to develop a really good App, and not just any app is not cheap, but think of it as an investment down the road, also companies will need to consider on constantly upgrading the version to correct for bugs, new features or fixing things, etc. It’s not a one time thing that’s for sure, not to mention the maintenance of the app.
See the hotels world flocking in to iPhone:
Hilton app – http://ow.ly/B11e
Starwood app – http://ow.ly/B11v
I believe more to come… whose next?
Large hotel groups like IHG, Marriott will have the advantage, as they have relevancy when it comes to search, it will also helps if they have Social Media channel as well like Priority Club or Yatt It or something like Starwood’s.
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