Brands looking to break into China should consider tapping into what a new report calls “the hidden consumption force” – the huge number of overseas Chinese residents who continue to have a strong influence on their home country.

According to innovation agency Fabernovel, these currently number some 70 million and are projected to reach 80 million by 2025 – bigger than the outbound travel market – with around 80% being permanent residents, the remainder temporary for six months or more.

“This segment has evolved as a key demographic for brands in diverse markets that are usually under-represented in local brand strategies,” says Patrice Nordey, Fabernovel APAC CEO, as many live in two spheres of influence. (For more details, read the full study on WARC: Overseas Chinese residents: The hidden consumption force.)

The fact that they typically have strong purchasing power is but one aspect of the sway they exert. Chinese students overseas, for example, spend $10.6bn annually on leisure and recreation; and around 250,000 Chinese high net worth individuals live abroad.

Daigou and key opinion leaders residing overseas can be powerful influencers, the report notes. With hundreds of thousands of followers they can be better marketers’ than many brands’ own in-house team, it says.

Overseas Chinese have also been the source of some the social media storms that have affected western brands – as in early 2018, for example, when Weibo and Zhihu users were outraged at the treatment by security staff of Chinese customers queuing outside a Balenciaga boutique in Printemps Paris.

Most overseas Chinese, however, are resident not in Europe but in Singapore, North America and Australia – and in the major cities of the last two.

Fabernovel advises brands to leverage the power of local Chinese communities by, for example, advertising on overseas Chinese platforms like Duonao, which provides online videos with Chinese scripts or eCentime, a European shopping guide serving local Chinese consumers.

It is also possible to market a brand via diagou, factoring them in as a distribution channel and holding shopping events exclusively for them.

And no brand that is serious about China can afford to ignore WeChat – the core social platform for Chinese everywhere, at home and overseas.

Recently, Fabernovel observes, WeChat has been developing more overseas functions for global markets as well as working on functions that can segment more precisely to target overseas users.

Sourced from Fabernovel, WARC