The New Zealand China Council has a podcast series featuring New Zealanders and their businesses in China. It is here with permission.
Magic Memories began life as a photo service for tourists visiting the Queenstown gondola more than 20 years ago. It is now a global attraction photography business offering experiences at more than 200 attractions worldwide, including big names like SeaWorld, Movie World and Legoland.
Entering China in Uncertain Times
The company is currently expanding into the China market at what is widely considered to be a challenging time for foreign businesses. Wikstrom says the company’s approach had previously been to focus on markets with familiar legal systems and fewer language barriers, but it always knew China would be a huge opportunity.
Wikstrom says the solution was to bring ‘winners’ onto the team who had a presence on the ground and who understood the unique characteristics of the Chinese tourism market.
“We always had a strategy that when we go to China, the best way to do that is with partners in the attractions industry that we already trust and have a relationship with when it comes to the guest experience, the products and the systems we provide.”
Magic Memories worked closely with Merlin Entertainments and Village Roadshow, both of which operate successful attractions in China, to identify how the company’s products would be not only accepted in the market but how Magic Memories could lead the Chinese market alongside them as partners.
Wikstrom says the company had a constrained time frame in which to set up its services in China, which meant leaning on key relationships with existing providers, installers, and suppliers until it had its own legal entity registered in the country.
“In our business, reputation is everything so we couldn’t afford to risk falling foul of local regulators or putting relationships with in-market partners at risk. We’re bringing people to the table to help us achieve a foothold for China that we've all worked on for many years, and we don't want to put that trust at risk either.”
Wikstrom says NZTE also provided invaluable advice and support for the company to find and navigate its way into the China market, as well as lending credibility when working with Chinese partners.
“With NZTE we were able to provide government support, which is very powerful and seen as a very strong string to our bow.”
Social Media, China Style
Adapting the company’s services to Chinese consumers also meant understanding how they differ in their use of digital technology and the unique demographic makeup of visitors to Chinese attractions.
Wikstrom says that in China, social media is an extension of everyday life in real-time, with everything happening faster and more instantaneously than in other countries.
“While people in Australia, for example, typically upload and share memories at the end of the day, for Chinese consumers this is done in real-time. So our product and platform have to respond to that behaviour.”
He says another key difference of the China market is the multigenerational makeup of visitors to attractions. While in Western countries it is unusual to see groups made up of three different generations, in China, this is much more common.
And because some platforms which are ubiquitous in Western countries such as Facebook and Instagram are not commonly used in China, the company had to ensure it was integrating with the platforms used most commonly by visitors to attractions on the ground.
“I think around 95% of people use WeChat. Many people use other platforms as well. But that was the one that we leant towards most quickly to ensure that we've got the adoption in mainland China.”
Direct to Mobile and Adding Value
Unlike the traditional experience of printing photos for people to purchase as they leave an attraction, Magic Memories now focuses on offering direct to digital and direct to mobile experiences, as well as building value into admission tickets for attraction partners.
This means having the option to get digital photography experiences as part of the ticket price, rather than a separate purchase. Wikstrom says this approach has helped partners keep ticket prices stable when capacity has been limited due to pandemic restrictions.
A direct to mobile experience involves guests getting a QR code with their ticket, which they can use to access large digital displays which they use to self-compose photography, before choosing to share, distribute or upsell the content as they prefer.
“That's the ecosystem of value that's almost like a direct to consumer relationship added as part of the value of the ticket price, meaning it's now a storytelling and a digital storytelling mechanism that's become part of the attractions offer.”
The Impact of Covid
While many people would question the company’s timing to enter the Chinese tourism market, Wikstrom says that in fact, the timing was perfect.
“Being locked in our home countries and not being able to travel meant we needed to think of a different way to roll the business out in these different markets. It actually enabled us to be faster.
“And luckily, because we were proving this direct to mobile engagement model that we could value and monetise in a different way in the industry, our shareholders and investors backed us.”
While Covid has obviously impacted revenues at attractions in China, Todd says domestic tourism in China is coming back very quickly - a phenomenon known as ‘revenge travel’.
“Chinese consumers have this mentality that when they are denied something for a certain amount of time, they come back for that thing even harder after the reopening.”
Wikstrom also says that since the outbreak of the pandemic, the company has had to take some of the physical interactions that used to be part of the offer and replace them with a contactless and seamless environment that is direct to digital. He says more than half of the company’s attractions in Mainland China are now fully automated.
Future Opportunities
Wikstrom says the opportunity for companies like Magic Memories in China’s tourism industry is huge, and throughout the wider region. While he can’t put a dollar figure on the scale of the opportunity, he says the company has also set up a presence in Hong Kong, Singapore, South Korea, Japan and Thailand.
“The pipeline is already starting to fill. Once we get to the stage where we’ve locked in the correct recipe with the correct product sets and the right model, this opportunity is going to be huge.
“No region is investing more into the industry of fun, so it’s exciting to have dipped our toes in and made good progress.”
*Rachel Maidment is executive director of the NZ China Council, and a former diplomat and entrepreneur who served as New Zealand Consul General in Guangzhou from 2016 to 2019. She is a host of the NZ China Council Podcast which can be accessed here.
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