Retail in Asia


EXCLUSIVE INTERVIEW : Tencent on its US expansion

Tencent’s International Business Group (IBG) has recently  presented a new suite of advertising solutions to enable U.S. marketers to directly engage Chinese consumers on Tencent platforms both in China and while they travel abroad.

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Tencent aims to offer international brands a distinctive cross-platform, cross-border brand value proposition, including an easy, all-in-one advertising hub and an unmatched access to Chinese consumers. Its WeChat mobile app alone has 963 million monthly active users, which is almost three times the population of the entire United States, and serves as bridge between brands and consumers to enhance the O2O strategy of retailers.

Chinese individuals spend more than 55 percent of their mobile internet usage on Tencent platforms, which include WeChat, QQ, Qzone, Tencent Video, and Tencent News.

“To engage Chinese consumers, it is important to reach them on their preferred communications platforms,” said Poshu Yeung, General Manager of International Business at Tencent. “For the first time, we are making it possible for U.S. brands to directly reach this audience through sophisticated targeting, not only in China but also when they travel to the U.S.”

Chinese tourists have tremendous spending power in the U.S., spending $35 billion in 2016 alone.

According to the U.S. Travel Association, the average spending per trip of a Chinese traveller in the U.S. is higher than any other international traveller, and shopping is a key activity for Chinese outbound tourists.

“For U.S. advertisers, China presents a dynamic, lucrative and challenging opportunity. Brands have become more sophisticated about the needs and behavior of Chinese tourists. To make a sale outside China, they understand that they need to speak to their customers before they even plan their trips,” continued Yeung.

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Over the past few months, a few select U.S brands were invited to use these new advertising solutions, including the largest mall operator in the United States, Simon Property Group, and popular women’s fashion brand, Rebecca Minkoff.

“Tencent and WeChat’s new travel targeting and advertising solutions provide us with an unprecedented opportunity to directly connect with Chinese travellers, both in China and when they visit the U.S.,” said Kristen Esposito, Simon Property Group Vice President of Tourism and Marketing Alliances. “China is projected to be the largest overseas inbound travel market to the U.S. by 2021, so the potential for growth is truly extraordinary.”

Source : Tencent

Retail in Asia met Poshu Yeung, General Manager of International Business to know more about Tencent’s US expansion plan, the profile of modern Chinese buyers and the digital trends influencing their lives, and how the information collected through Tencents’ platform can support the decision-making process of stakeholders in the retail industry.

RiA : What is the plan for Tencent IBG’s ad business global expansion?

Poshu: What we did was to create a new platform and combine it with the existing China advertising platforms, and we achieved a tremendous success in China. We understood very soon that these business actions are beneficial to merchants and brands targeting China and we thought of expanding globally.

China is a big market and there are always black holes, which are appealing to merchants, even the ones already operating in the market. Now, we are looking at how to enable international merchants to understand the Chinese market and Chinese travellers in particular.

RiA: Who are the modern Chinese consumers, which all the world is trying to profile and how does Tencent help foreign companies to target them?

Poshu: If you look at data, in 2016, there were over one billion Chinese travellers, most of them going to the US. Tourists’spending in the US in 2016 was around 35 billion dollars, that’s why American merchants are eager to target Chinese travellers.

When Chinese tourists go abroad, they spend 50% of the time for sightseeing and the rest shopping. Shopping is an integral part of their traveling experience because Chinese customers are concerned about trust, price, quality, and also the memory related to the purchase, which is related to the travel experience.

In the customer’s journey, Tencent comes in to drive traffic to the offline stores, or even work on the pre-order and pick-up.

We operate both inbound and outbound targeting. Inbound targeting helps US brands to understand Chinese consumers preparing for a trip to the US. We get information from our WeChat users, and they are about 980 million monthly active users, and besides WeChat, people in China spend 55% of time on Internet online platforms, so we can leverage a lot of behavioural data.

Outbound targeting helps merchants to understand Chinese travellers, while they are in the US already, as once they land they will be looking for sightseeing and shopping destinations.

Wechat Pay has been expanding rapidly in the US.,but also in Europe, merchants are adjusting to Chinese travellers by meeting their technological needs. Tencent, being a comprehensive ecosystem, hosts the whole customer journey, from the full cycle of advertising to actually driving the traffic to the store to boost the O2O approach.

RiA: Millennials are disrupting retail. How do you work with retailers to target millennials?

Poshu: Millennials are online and merchants have all gone online to follow them. Now, we are working on the offline experience. Tencent provides merchants with the opportunity to distribute coupons with ads on official accounts to target millennial travellers.

Users can go to the shop, scan and use the coupon to redeem the product.
Millennials know what they want, they want it immediately, and they hate waiting. With Wechat, they can pre-order, pay, and just collect.

RiA: Which digital trends we should keep an eye on?

Poshu: I think that what we are doing now is somehow for the future already. We have an entire ecosystem that defines the future. If you want to define the future of the future, I think we ought to go through the experimentation, such as whether advertisers like the idea, and how long will people take to accept it.
Meanwhile, technology-wise, there are so many things we can do. The coupon system is one. An official account is a marketing tool, but also a great CRM.
In addition, there is so much we can do with AI, big data, and VR, AR, to enhance home shopping.

This is an ecosystem built for China and actually for the world. And this is the first time we try to leverage Chinese travelers to educate the US market.

RiA: What’s your views on the future of the physical store?

Poshu: I am not sure that it is our job to define the existence and the importance of the retail shops. I think what we are trying to do is to provide retailers with a platform to extend their business and drive more traffic to their retail space.


Poshu highlighted how Tencent is aware of the role played by Chinese internet giants in retail, and he focused on the promotion of a collaboration between companies like Tencent and retailers to build the O2O trajectory and leverage on the global outreach of provided by online platforms to drive traffic to the physical store and increase the revenues.

Retail in Asia is looking forward to the next updates on Tencent’s global expansion.


For information regarding this topic contact our InTelligence Team