How to adapt your global Loyalty program infrastructure to China?

When global brands enter or accelerate in China, one of the first strategies that marketers put in place to drive retention from the elusive Chinese consumers is to import their successful Loyalty schemes from Europe or elsewhere outside of China. You have decided to adapt your Loyalty to China, and localize it to the reward strategies that work here? You know then that adapting your infrastructure to the Chinese market is a challenging task. You cannot expect your Chinese customers to download your global Loyalty app from Apple and Google’s app stores because it simply will not work. So, what are the key points you should consider maximizing the success of transposing your Loyalty program infrastructure to China?

Last year, Shangri-La were still offering their global app to their Chinese customers as their main Loyalty program interface. But Google Play store is unavailable in China. Source: flyer in their Hangzhou venue.

Reusing your global Loyalty management architecture in China is Challenging. 

Mirroring your current global Loyalty solution in China is the first thing that comes to most marketers’ mind. Having a unified system across countries or regions has the enormous advantage that it keeps your Loyalty scheme in sync everywhere, or at least makes updates worldwide relatively painless. From a technical point of view, whether current backend can be directly used for China is the main point to consider. It’s good to check with your global IT team:

1. If you are using an on-premise software solution, can the backend be installed on Chinese servers? And can it be connected to Chinese channels easily (WeChat, e-commerce, stores etc.)?
2. If you are using a SaaS platform, do they have hosting in China? Can it be proxied to China and made compliant with local personal data protection laws (China’s Cyber Security Law in particular)?

Once your backend is up and running, you can start to implement supporting Chinese into the program, and map additional customer information that is China specific (e.g. the WeChat ID), with keeping the global Loyalty mechanism. Most of the global Loyalty program platforms run in webpages or native apps as front end: this can be used in China, but you will need to add significant localization work. 

And to meet your Chinese customers where they are, you will need to consider offering WeChat as an interface at the minimum, which very few global solutions offer out of the box.

96% of consumers in China want companies to communicate with them through WeChat or other app platforms. Source: Loyalty Program in China Whitepaper, iResearch.

Using a fully local solution?

In case your IT management allows it, choosing a fully local solution vendor to manage your China customer base is another option. The advantage is you can design a fully local Loyalty strategy to better match Chinese customers’ expectation, and most local solutions offer Chinese channel frontends out of the box: WeChat, Tmall etc. You can then synchronize your China customer data with global databases to facilitate global management such as Business Intelligence.

The inconvenient is the overhead of adding a separate solution to your global stack, and the pain to maintain it in sync with your global Loyalty mechanism schemes.

A solution like Splio brings the best of the two worlds, as we are a global Loyalty marketing platform with full local hosting in China, in compliance with local regulations, and out of the box interfacing with Chinese channels.

Adapt your Loyalty program management to China’s specificities. 

Comply with local data protection rules.

Firstly, your Loyalty program must be CSL compliant. For marketing, operations, recruitment or any business activity that requires the collection and the processing of personal information in mainland China, here are the most impactful principles to understand and comply with:

• Data transfer abroad must obey strict rules.
• Personal data should be stored in mainland China.
• User consent must be explicitly collected on scope and usage of data.
• Data collection must be strictly limited to the scope of your business offering.
• Data protection measures must be put into place.

Regarding backend, if the Loyalty engine is hosted outside of China, you need to follow CSL to output and process data, technical performance maybe become a concern. In order to integrate data from different channels, you will need to define data format before and tokenize it or anonymize it before centralizing. Then you can synchronize data in real time with API or regularly update with global database and schemes according to your IT policy and Loyalty campaigns.

Consider omnichannel from the start.

Secondly, choose the most suitable frontend channels. If your products are sold only on TMALL or JD, consider integrating with their native Loyalty programs. If your business runs mostly offline, WeChat is the easy choice. Some brands use their own website as a loyalty interface, however, driving traffic to it is the main problem to be solved in China. If you want to cover more channels that can be scalable in the future, it’s best to choose an omnichannel Loyalty management system to integrate online and offline, and also manage data in one place.

Sephora’s Omnichannel Loyalty program in China: points, status and features are seamlessly available regardless of the channel you are using.

And your frontend(s) must not be fixed in stone: you need also to be ready to adapt to China’s super-fast moving digital environment. New channels where you can offer your Loyalty program appear regularly. For example, Dazhong Dianping 大众点评 recently added a Loyalty program feature in their app, further fragmenting the loyalty engagement channels available for brands in China: TMALL, JD, WeChat, your website etc.

Some channels, such as WeChat, may offer you their native loyalty program management. For example, WeChat has an official native Loyalty engine they offer to all brands. You may want to choose instead an agnostic solution to avoid being locked in a specific Chinese ecosystem.

Left: KFC’s in-store order allows members to identify themselves by scanning their WeChat page. Right: Burger King’s Loyalty program is offered directly on any of their store pages on Dazhong Dianping (China’s Yelp equivalent).
 

Conclusion.

Regardless of your business situation, chances are that the most adequate adaptation of your infrastructure to China will be by building a China proxy. Whether building your own or taking a solution off the shelf is a question of ROI and agility. A solution like Splio can save enormous time and resources by connecting your global solution to Chinese channels and enable your brand to be future proof.

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