I saw the new movie Crazy Rich Asians last night. It was fun, escapist entertainment. However, the scenes in the shopping malls had me wonder, is this how the Crazy Rich Asians shop?

Singapore, Hong Kong, and Mainland China are well known for luxurious high-end malls filled with designer shops – which seem never to have anyone in them. Walk past these stores. You will see young, impeccably dressed, saleswomen milling around the store, straightening some item on display, or just looking through the front window. Where are the customers?

I have heard many reasons for this phenomenon. Some say that the malls themselves discount the rents to the name brands to make the mall more luxurious and attractive to potential stores. Others say that the stores are marketing activities to promote the store’s brand names to Chinese luxury consumers. A third theory is that the real shopping takes place by appointment in a private room behind the store or at the client’s hotel room. (The movie illustrated the third theory in a scene where Astrid was shopping for jewelry.)

40% of luxury purchases made by Chinese are made outside of China

The reality is that Crazy Rich Asians shop overseas and on the Internet. This is known as cross-border retail shopping.  A recent study shows that 40% of luxury purchases made by Chinese are made outside of China. Wealthy Mainland Chinese make an average of 5.9 international shopping trips per year. Hong Kong, South Korea, and Japan are the top destinations. Instead of selling to local customers, a recent survey by ContactLabs showed that 90% of all luxury goods sales in Hong Kong and Macau come from foreigners who engage in “touristic” shopping.

Internet shopping is also on the rise for the Chinese. Haito (海淘), buying imported products directly from cross-border vendors over the web, has grown at the breakneck rate of 74.8 percent annually since 2011 and exceeded $657 billion in 2014.

Why don’t Chinese purchase luxury products at home? Chinese consumers engage in cross-border shopping to get higher quality products (67%), to avoid counterfeits (45%), and to take advantage of lower prices (35%), according to Frost and Sullivan.

Fakes are so prevalent in southeast Asia that cross-border products have a higher chance of being the real thing.

Those of us who live in the West may worry that when we engage in cross-border shopping that we will get knock-offs. But, fakes are so prevalent in southeast Asia that imported products have a higher chance of being the real thing.

Hefty import tariffs and consumption taxes also raise prices for luxury goods in Mainland China. In 2016, the price for the Longchamps “Pliage” bag was France €76. In Beijing, it was 1100RMB (€150), double the price. (China is in the process of lowering tariffs for many products in 2018.)

Luxury brands are struggling to cater to the cross-border luxury customer. Her customer experience expectations are very high. McKinsey & Company states that the Chinese luxury customer expects:

  • “Being individually recognized by the store staff in every store of their favorite brands they walk in(to).”
  • “Experiencing a similar level of familiarity with sales staff as if they were in their preferred stores, like color preferences…”

Luxury brands focus on customer experience cross-border shopping

In response, luxury brands focus on customer experience cross-border shopping. For example, Burberry, which is well-known as an early adopter in customer experience, has reportedly hired 150 Mandarin speaking sales associates across popular travel destinations in Southeast Asia just for the Chinese traveler. (Chinese customers account for a third of the worldwide cross-border spending on luxury goods, and that percentage is growing rapidly. By 2025, McKinsey & Company forecasts that Chinese luxury consumers will account for 44% of the global market.)

However, placing Mandarin speakers in a store that does not solve the problem of recognizing your best customers in every store around the world. To do that, the sales associate needs to be able to retrieve all the relevant information about the shopper.

Data silos” are significant problems that impede the sharing of customer information between countries. They are databases that occurred naturally when a geographic division automated their operations before a global plan was created. These well-established and independently designed databases are difficult to link together.

The key for luxury retailers is to create a “system of reference”

The key for luxury retailers is to create a “system of reference” that enables all of the data silos to submit (and synchronize) information that can be used to get a complete 360 customer view from any store.

The problem of creating a system of reference is not just a technical or connectivity one. The issue is that customer data cannot be matched easily. For example, every customer record should contain the name of the customer. But, what happens if she has different names in different databases?

For example, in her home country, the name of a Chinese person is likely recorded in Chinese characters. However, outside of these markets, Chinese characters may not be supported at all. In those cases, a Romanized name is often used. However, Chinese names entered into Western systems are not always entered in the same way by data entry personnel.

Chinese surnames Wang, Huang, and Wong all refer to the same surname

For example, the Chinese surnames Wang, Huang, and Wong all refer to the same surname. In Singapore and Hong Kong, the Romanized name might be the surnames given in their dialects, as recorded by British officials at the time. Some Chinese even change their names to a Westernized name or initials to make it easy to transact business overseas. This means that a name in the database might not be at all related to the Chinese name at all.

At Global-Z International, my employer, we use a technique known as “cascading” to identify customers. Cascading uses information across multiple records to identify customers, even when data conflicts or is missing. (How to match records in data silos.)

Cascading helps us to identify those Crazy Rich Asians and assemble the information needed for a complete 360 view of each customer.

NOTE: My employer, Global-Z International has been a significant part of building the customer to brand relationship strategy for global luxury brands for over 25 years and in the People’s Republic of China since 2003.

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In this article the history of Asian writing systems and some of its challenges are discussed.
by Brian Reese

—Rudyard Kipling.

Times and cultural attitudes have irrevocably changed since Kipling penned his famous line. In today’s global marketplace, one cannot afford to ignore—or be ignorant of—the East. At Global-Z International, Asian markets have become a mainstay of our business. It has, therefore, been imperative for our Research & Development team to gain a high level of proficiency in dealing with Asian writing systems.

To a Western reader, Asian writing may, at first, appear beautiful but incomprehensible. Upon closer examination, however, one finds that it is not indecipherable.

The basis for the major written languages of East Asia is Chinese. Traditional Chinese characters are known as hanzi. Hanzi originated approximately 4,000 years ago as ideographic pictograms. That is to say that nearly every character corresponds to a word and often bears a visual similarity to the word it represents. As in the hanzi character lin that means forest. Over 50,000 hanzi have been catalogued; modern Chinese writing uses approximately 6,000 hanzi for daily use.

There are three distinct styles of hanzi: traditional, simplified, and handwriting style. Taiwan and Hong Kong maintain the use of traditional hanzi. The People’s Republic of China adopted the simplified style of hanzi following the revolution in an effort to make reading and writing more accessible to the masses. The handwriting style is a variation on traditional or simplified hanzi with connecting strokes made by the pen or brush.

Several systems exist for the transliteration of Chinese. Transliteration is the approximation of the sound of a Chinese character on a Western alphabet (as opposed to translation, which conveys the meaning of a character). The most widely used are pinyin and Wade-Giles. Pinyin was created in 1958 and formally adopted by the P.R.C. in 1979. Pinyin replaced the older Wade-Giles system—which is still in use in Taiwan. This explains the shift in words like Beijing from the older Peking.

Hanzi were imported into Japan in the fifth century. They were adapted and renamed kanji. The Japanese either maintained the meaning and pronunciation of an hanzi or gave it the pronunciation and meaning of one of their native words. The kanji for forest illustrates the similarities and differences between hanzi and kanji. The multiple interpretations of a given kanji make Japanese extremely difficult to master.

In the ninth century, the Japanese created their own supplement to kanji known as kana. Of kana, there are two kinds: hiragana and katakana. Kana are simplified characters used to represent specific syllables. Each set consists of forty-six phonetic symbols. Either set may be used to spell out Japanese words, however, hiragana is most frequently used to modify kanji; katakana to write foreign words assimilated into Japanese. It is easy to recognize the difference between kanji and kana in a written text, as in the kana spelling of forest.

In Japan, as in China with pinyin or Wade-Giles, the sound of words may be transliterated using romaji. Romaji is the phonetic spelling of Japanese words using Roman characters. Several methods of transliteration exist. The most widely used are the Hepburn, Kunrei, and Word Processor systems.

The examination or study of hanzi or kanji begins with radicals and strokes. Due to the overwhelming number of characters (approximately 50,000 each) a system of classification has been developed over the years. Strokes are used to group characters by the amount of brush strokes it takes to create a given character. An hanzi or kanji may contain from one to more than thirty strokes that are learned and executed in a precise order. Radicals are dominant strokes that are repeated in a variety of characters. The identification of radicals provides information about which group of hanzi or kanji a given character belongs to.

Koreans also adopted Chinese hanzi as their writing system. Hanzi are still used in South Korea (though not North) in conjunction with Hangul.

Hangul is the syllabic alphabet of Korea that was developed in the fifteenth century. Each letter represents a specific sound (the symbols mimic the shape of the speech organs in making sound). The twenty-four letters in Hangul may be combined to create phenomes, thereby extending the actual number of letters to forty. Combining the letters h—a—and—n, for example, create the “han” in Hangul. This simple, straightforward structure makes Hangul one of the more easily decipherable East Asian writing systems. As with Chinese and Japanese, Korean also has a variety of transliteration structures. The Ministry of Education, and Korean Language Society systems are most prevalent.

The major writing systems of East Asia do hold complexities not encountered in the languages of the West. However, it is the beauty and challenge of these writing systems that makes them so fascinating. By accepting this challenge of comprehension, we take the first step—not only economically—but also culturally, toward greater understanding. Language is the most tangible bridge between the divide of East and West.