Thank heavens for China… At least that is probably what Boeing and Airbus are thinking as aircraft orders continue to come from the fastest growing market in the world. Boeing’s latest excellent market forecast through to 2034 notes that China will require some 4,630 single aisle aircraft valued at about US$490 billion. They go on to note that a further 1,500 new wide-bodied aircraft will be required valued at around US$450 billion; in total some 6,100 aircraft (25 aircraft per month) delivered to a Chinese airline through to 2034. Such rich guarantees of demand are few and explains precisely why the world’s largest aircraft manufacturers are clambering all over the market.
With such ambition and manufacturer projections it is likely that nearly every major city in the world will soon have either direct services or one-stop connectivity to major Chinese markets. So should air development professionals simply wait or is a more pro-active approach to developing business with China and its growing airlines necessary?
The China-Europe Air Transport Symposium being held on the 6th September at the University of Surrey will highlight why a more proactive attitude is necessary. Over the last five years many airports in Europe and North America have seen modest growth from mature markets, so many are now giving attention is being given to the new markets of China and Asia. First-mover advantage can be overstated, but in the case of China such an advantage is very real.
Eight tips
For those seeking to do business in China the traditional ways of securing new air services and business development do not quite fit. Here are eight tips for adapting your approach to a very different corporate culture:
1. Research is crucial. The market in China is huge, potential enormous and opportunities vast, which frequently leads to the “dive in” approach. Initial time invested in researching the market, the airlines and particularly their ownership structures, their recent expansion, forthcoming aircraft orders, regulatory framework and management structures represents a great place from which to start. It is almost impossible to over stress the value of time and indeed patience when developing your knowledge of China and how the market functions; never assume that what works in Europe or North America works in China… it might, but frequently it does not!
2. Local insight is well worth the investment and will pay real dividends quickly. A number of airports have recruited Chinese speaking executives to join their air service development teams. It would seem a logical step. However, those people need to be in the market rather than “outside, looking in”. A senior person located in China with the appropriate market knowledge, connections in various circles and an understanding of the bigger strategic picture from a Chinese perspective is worth their weight in gold. Experience suggests that someone who merely visits the market, however frequently, has to re-establish relationships on a regular basis; but if located in market that challenge disappears.
3. Relationships are so very important when developing business in China. We are all time precious but when working in China investment in those relationships means being flexible and realising that social invites are an important part of that relationship building process. Invitations to dinner should be accepted, offers of being shown the city sights accepted as should invitations to a game of golf – however badly you play! All of these are signs of wanting to get to know you as a person and your company; they are early signs of interest and may also have to be reciprocated at some point. All of this means being flexible; the classic five day Asian Airline network planner meeting/trip itinerary doesn’t quite work in China.
Developing those relationships builds trust on both sides and with that, increased confidence occurs. That ultimately means that when you actually start discussing your market opportunity that the person concerned will trust what you say and believe the data that you are presenting. Remember that on many occasions whoever you are working with will have to explain everything to their management at some point, so the more confidence they have in you then the more confident they will be in “presenting up” your opportunity.
4. Be very clear in what you say and making sure that the person receiving the message equally understands the point. As in any part of the world, sometimes saying “yes’ doesn’t mean “yes”. It is therefore always worthwhile making sure that the message is understood, even if it requires repeating or putting in a slightly different way. Once those relationships have been built and trust exists it is likely that your counterpart will be more open to saying that they don’t quite understand as well.
5. It is important to share knowledge when developing business in China. From experience, the appetite for learning is immense and can be shown in so many different ways. It is not unusual for people to request fact finding trips to your airport or indeed ask you to arrange other meetings for them when they are travelling in Europe. Such requests are all part of that relationship building and whilst they may require you to do some digging around it should pay off in the long-term.
6. Raising awareness of your destination needs to be included in your plans. Not every city in the world has a Manchester United or Barcelona that new Chinese travellers relate to and therefore have some knowledge of the destination city. Even today China has one of the lowest propensities to fly of any country. While statistics suggest that less than 5% of all Chinese hold a passport, in the cities that proportion is a very large 50%. However, Chinese travellers have a great deal of choice in regional markets which perhaps offer a greater degree of familiarity and reassurance than the long haul destinations.
7. Factor in local marketing. Alongside the “normal” air service development stuff that goes on every day there is a need to think about how to raise awareness of the destination in the travellers’ mind. Local marketing is important, with direct translations of material frequently falling short in their understanding. Images and copy need to reflect a local flavour and local social media is an important method of building that awareness. One major European airline has a dedicated marketing team based in Shanghai working through all the nuances of the market so that they can build local traffic; it is that important.
8. Help to sell the service locally. Once you get very close to that new service that you have been craving for years, one very important area remains where your support, guidance and interest will be crucial remains……selling the service locally. For Chinese airlines starting overseas services can be daunting; local awareness of the new service may be almost zero, understanding of the key distribution outlets minimal and access to key corporate accounts non-existent. We know that some Chinese airlines have not spent their planned marketing budgets for new launches because they literally do not understand where to spend the money or from where to get the maximum return. By all means get the Lion on the tarmac, cut the cake, roll out the local dignitaries host the launch reception BUT more than anything provide the local knowledge on the market and how to get a fair share.
After all that’s why they trust you and you built the relationship in the first place!
For more insights, opportunities to network and discuss how to maximise the World’s largest aviation market opportunity with the single largest delegation of Chinese airline executives then register for the China – Europe Air Transport Symposium on the 6th September.
http://www.surrey.ac.uk/features/china-europe-air-transport-symposium
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