Chinese tourists take a ferry circling around Statue of Liberty in New York in September. The number of Chinese tourists in the United States has more than doubled in the last year. [Photo By DAVID PAN / NYU Journalism School]
Marketing

Tencent Sees Opportunity As Chinese Tourism in US Grows

In the last five years, the number of Chinese tourists coming to the United States more than doubled. Tencent Holdings Ltd (market cap: more than $400 billion), the parent of WeChat, the most popular social media platform in China, wants to take advantage of that growing market.

In September, the company demonstrated the advertisement model in its marketing debut in the United States during New York Advertising Week, an annually held event for marketing and technology professionals.

The U.S. social media applications such as Facebook and Twitter do not have access to people in China because of its censorship over the Internet. It grants WeChat, the Chinese equivalent of Facebook, the advantage to advertise US brands among Chinese consumers.

While in the U.S., we can place offers on display for the Chinese consumers, said Benny Ho, senior director of Tencent International Business during in a presentation at Advertising Week. “This is a particularly interesting thing that, quite frankly, no other platforms can do.”

With our users’ data, we can identify those who have shown interest to travel in the U.S. and cultivate brand awareness and loyalty of these potential costumers to the U.S. companies, according to Benny Ho.

The company launched a new advertising platform on September 21 to make use of data collected by WeChat from its users in the United States. Tencent has established partnerships with Rebecca Minkoff, a luxury brand for handbags and clothing, and Simon Property, parent company to multiple shopping malls in the United States.

According to the US National Travel and Tourism Office, China will reach 3.4 million arrivals by the end of 2017, and become the largest overseas market in the country with 6.3 million arrivals in 2021. The number of Chinese tourists would be greater than Germany, France and Australia combined.

Joe Lin, a tour guide for New York-based L&L Travel Enterprise Inc, said he has seen a recent shift in tourist demographics.  “Ever since I became a tour guide three years ago, I have seen a lot more tourists from China every year,” he said.

Despite having more than 938 million active monthly users — 98 percent of Internet users in China —  WeChat faces increased competition from Sina Weibo, the Chinese equivalent of Twitter, which launched in 2009, two years earlier than WeChat.  While WeChat only allows users to see their friends’ posts, Sina Weibo drew marketers’ attention with ad campaigns targeting a mass audience and by leveraging the power of celebrities.

In 2011, Chinese actress Chen Yao, who has more than 40 million followers on Sina Weibo, promoted New Zealand for the company by posting pictures and experiences of her trip in New Zealand on her Sina Weibo profile. During that time, the little-known New Zealand tourism website boasted more than half a million traffic of online visitors mainly from China.

More than 13,000 international brands have official accounts on Sina Weibo. Sina’s net advertising revenues were up by 72% year on year to $218 million for the second quarter this year, according to its annual report.

Meanwhile, Tencent’s advertising revenues grew by 61% to $906 million in the second quarter of 2017, according to its latest quarterly report. The increase primarily reflected growth in advertising revenues derived from WeChat and other mobile apps.