This article was first published on Azoya's WeChat channel. Check out our new site to learn how to sell to China through WeChat.
Shinsegae Group is one of Korea's largest retail, leisure, and real estate conglomerates. It owns department stores, travel retail stores, convenience stores, hotels, and even fashion & cosmetics brands across South Korea.
In recent years it has stepped up its travel retail presence to target Chinese tourists. Shinsegae Travel Retail generated a whopping US$1.8 billion in revenues in 2018, more than double that of the previous year. Travel retail is one channel through which foreign beauty & cosmetics brands can reach Chinese consumers - specifically tourists that cannot find certain products back home.
Many of these brands are cruelty-free and cannot sell in China due to its animal testing requirements. For example, in September Rihanna's Fenty Beauty held launch events in Hong Kong and Myeongdong with DFS Group and Shinsegae Duty Free, respectively, as part of its Asia market entry strategy.
We take a look at how Shinsegae's WeChat mini-program leverages its omni-channel loyalty program and retail ecosystem to provide Chinese tourists with the ultimate travel retail shopping experience.
Shinsegae's mini-program is complex as it tries to stuff multiple different functions into one mini-app: duty-free shopping, membership coupons, customer service, location guides and more.
But if you take a closer look, it becomes clear that the mini-program is more of a loyalty membership mini-program than anything else. The three main buttons on the front page focus on the membership program details, certain deals for free individual travelers (FIT), and benefits for VIP members.
Shinsegae WeChat Mini-Program
While customers can shop for duty-free items, the button takes customers to Shinsegae Duty-Free's official website, which has a large number of SKUs that customers can browse, prepay for, and reserve at a location convenient to them. This is different from DFS Group's WeChat mini-program, which lets you pre-pay for and reserve duty-free items at the store within WeChat.
Let's take a deeper look at the benefits that the loyalty mini-program offers.
Shinsegae's loyalty program is relatively simple. Members are ranked from silver to gold, platinum, and black. Silver members get 10% off both online and offline purchases, and status is given to those who spend at least US$500 in one day or US$3,000 within three years.
Black card status gives 20% off purchases, as well as occasional benefits for Black card holders only. Black card status is extended to those who spend at least US$20,000 within two years.
Shinsegae also offers a loyalty program for those who use its online duty-free purchasing system. Level one members just have to register as members and get 10% off purchases. At the other end of the spectrum, those that spend over US$5,000 within two years become level 5 members and get 20% off purchases.
The mini-program also notifies members of rotating promotions in certain locations. For example, the Myeongdong store is holding a promotion during the months of Oct-Nov, where there are discounts off luxury watches and jewelry brands such as Louis Vuitton, Chanel, Hermes, Cartier, and more. Those that spend US$3,000 are entitled to 150,000 KRW off, while those that spend US$30,000 are entitled to 1.5 million KRW off their orders.
Shinsegae Watch & Luxury Promotion
Shinsegae's Travel Retail Ecosystem
Shinsegae's retail & real estate ecosystem includes department stores, malls, hotels, brands, retailers, and convenience stores.
We take a look at how the mini-program leverages all of its assets, as well as external partnerships, to give its customers a wholesome shopping experience.
Shinsegae Group consists of: Starfield (shopping malls), Premium Outlets (outlet malls), Shinsegae International (fashion, beauty, and lifestyle brands), L'Escape (hotel), and emart (convenience stores)
For example, members shopping at Premium Outlets have access to a "Savings Passport" of VIP coupons, as well as one free coffee coupon and other benefits that can be used at the Premium Outlets' service center.
Members that stay at Shinsegae's L'Escape hotel get to receive 10% off food & drink items at its restaurant, cafe, and bar. Members also get 10% off of Shinsegae's in-house fashion brands: Brunello Cucinelli, Sacai, and Fontana Milano.
In addition to these offline services, Shinsegae also partners with other travel mini-program partners such as WeChat Pay, Industrial Bank, Ctrip, Dianping, 一齐旅游, and 玩转购物.
WeChat Pay offers coupons and Industrial Bank offers travel credit cards. Customers also can book air tickets under Ctrip and browse restaurants/points of interest through Dianping. 一齐旅游 lets tourists buy beauty, fashion, and food items such as Dunkin Donuts' donuts and coffee, while 玩转购物 acts as a guide for all duty-free locations in Asia, such as China Duty Free stores, King Power duty-free stores in Thailand, etc.
Such an extensive array of functions make it easier for Chinese tourists to access everything within one mini-program. This is useful when targeting older users who may not be as tech-savvy could have difficulties downloading or accessing separate apps.
Other Mini-Program Functions
The rest of the mini-program functions are designed to make the duty-free shopping experience simpler, efficient, and easier for the customer by providing valuable information.
For example, there is a customer service chatbot that is available from 8am to 10pm every day, 365 days a year.
There are also guides that show all of Shinsegae's travel retail locations and information, and shopping guides that detail how exactly the shopping process works. This includes what documents you need to bring (airplane ticket, passport), how to buy an item and pick it up, etc.
Lastly, there is also a currency conversion calculator handy for tourists to convert currencies into Chinese yuan.
Such functions make it easier for Chinese tourists to navigate travel retail locations and get around, so they can focus on enjoying their time abroad.
1.Travel retail in Asia is important for brands & retailers targeting Chinese consumers. Many Chinese consumers cannot find certain cruelty-free cosmetics in China because of animal testing requirements, or simply find the import taxes to be too high. Rihanna's Fenty Beauty has focused heavily on selling through travel retail locations as part of its China market entry strategy.
2.Shinsegae's mini-program focuses on loyalty member benefits by offering discounts across its travel retail ecosystem of malls, brands, hotels, and more, as well as partner discounts through WeChat Pay and other travel retail players.
3.Other mini-program functions include travel retail guide location & shopping guides, as well as a currency conversion calculator. Such functions are designed to make the travel retail shopping process easier and less stressful.