Hello everyone and welcome back to a very special episode of How's the Shared Living podcast. Over the next few months we'll be bringing you the latest news, views and insights from across the rented and shared living sectors. So if you work in around PBSA, BTR, co-living, university accommodation, HMAs, all the rented living sector you are in at the right place. Today's episode is a little bit different and a little bit special. This is all about the Chinese market, bringing you directly insights into how the sector can better understand, engage with and work directly with the China market. China remains one of the most important and complex international markets. The student housing, BTR, universities and the wider rental living sectors. But it's also one of the most missed understood. So we're going to try and bust some of those missed today. I'm here directly from some of the sector experts, more on that in a minute. But in the meantime, I'm Sarah Canning from the Property Marketing Strategist. Hi Dan Smith from Resid Consultancy at the Furberflow AI. And I'm Deenie Lee from the Property Marketing Strategist. So our very special guests today are Sam Raes and CEO of Viva City. They specialize in WeChat Mini Programs and Data Driven Engagement helping operators and institutions connect directly with Chinese audiences. And we also have Gabriel, Nicklin from Tongue Global, a marketing agency specialising in China supporting real estate operators, universities and brands to cut through the noise and build meaningful direct engagement in the Chinese market. But you can probably hear more from them directly. So Sam, do you want to just tell us a little bit about Viva and what you do with the China market yourself? Yeah, well thanks for having us. This is very exciting. So Viva, we've been in the space, well we started life in 2015. It's been a long 10-11 years. But around students at least since 2020, our business was established to help companies better connect with their Chinese audience. Over the last five, six years, we've ended up specialising in WeChat Mini Program Development. I know some of you are very familiar with Mini Programme. Some of you might not be. But essentially inside China consumers don't interact with brands necessarily through websites like we do in the UK. They like to engage brands through platforms that they use every day. And WeChat is one of the most prominent platforms in China. So the Mini Programme essentially gives companies a brand interface in WeChat. So from a student housing perspective, we're able to build an app that functions a bit like a lightweight website and it allows your perspective Chinese audience. So your existing Chinese tenants to engage with your brand, read information, making inquiries, make bookings, talk to sales teams, a very comprehensive tool. We work with probably around 60 operators, predominantly in the UK but also in Australia, the US and some parts of Europe now. So we do have some interesting stories to tell on which hopefully we can get into today. Fantastic. Thanks very much Sam. And Gabe, do you want to fill us in on what Tonga's? And then I think what I'd really like to cover is kind of how you guys work together because we know because we've worked with you guys for many years in various different ways that you're not actually competitors. But I think some of the sector will kind of think, oh my god, they're on a podcast together. How does this work? So Gabe, over to you. Yeah, absolutely. Thanks so much, Sarah. I think a lot of people might hear, you know, to UK, China, businesses. They must be working in competition, but it's definitely not the case. As you say, my name's Gabriel or Gabe, I've been with Tonga for about six or seven years now. We as an agency, been going for almost 12 years now, similar to Sam. The founding of the company was really based around the idea that as digital marketing solutions became more and more complex in the UK and the US, based around predominantly American digital marketing platforms, such as Meta and Alphabet and things like that. The same wasn't really happening for Chinese digital marketing platforms, which are so unique to the Chinese market behind the Chinese firewall. So we built a niche quite early on, an indirented living sector, something that we've only continued to develop over the past decade. I've been there as I say for about six years, mostly in the client services area, but now as managing partner of the business. And in terms of how we work together with the city, the main thing that we do is a sort of full service digital marketing solution. In terms of building brands for clients, working with existing students as well as acquiring new students and inquiries through key social media platforms, because that is how Chinese students engage with brands and do their research in order to make big decisions like moving to the UK to study and deciding where to study. So in that way, we're more of the customer acquisition funnel and then we put those Chinese students onto which at many programs that Sam may produce, so that they can inquire and convert and engage more richly with the brand. Is that kind of a fair summary so? Very good, yeah. I mean, the easiest way I try to frame it is as a funnel, we've got top of funnel activities, which is what Tong does. Driving that traffic to the middle layer, which is the mini program, you know, the mini program itself can be discovered on WeChat and accessible from places. So there's a little bit of top of the funnel stuff, but its main focus is about taking that traffic and creating an outcome. You know, hopefully that outcome is an inquiry or booking or an engagement with the customer service team or sales team to support the student. And then you've got the bottom of the funnel, which is the conversion layer, which is a very interesting talking point. And part of our job together is to try and explain where the nuances and where the differences between the Chinese digital environment and the so-called Western digital environment. So there aren't always like for like comparisons. It's not easy for us to say a mini program is the same as an app or, you know, a little red book or red notice the same as Instagram. These aren't easy comparisons. So what we try and do is to teach our clients and other people in the sector about how students and parents use the digital ecosystem in China to make decisions and how we can influence them towards our brands. But that's exactly why we need experts like you because we can't access them, we can't see them. And most of, you know, the Western marketing teams don't understand them. So we're really fortunate to have you both with us today to impart your knowledge. I guess a really good starting point would be why are we talking about the Chinese market on a real estate podcast? Why is the Chinese market so significant and why should our audience care? Yeah, I mean, simply put just to kick off is because of their importance to the sector. We know that there are approximately 150,000 Chinese students studying at the UK at the moment. They tend to prefer higher quality accommodation, usually in the PBSA or the BTR or the co-living sector. We know that because the average rent as shown through students paid by Chinese students is usually about 224 pounds a week as compared to 158 pounds by UK and a lot of international. Other international such as Indian students. So there's a real price premium as well as the quantity of Chinese students that come to the UK for study. And that's why they're so important to the UK and across Europe as well. And I guess there's an element of the managed product that seems to be appealing to Chinese students. And I guess that's just because otherwise renting on the wider market would be incredibly challenging just for somebody. Whereas having that kind of managed proposition is a one-stop shop really. Is that the kind of product that you would say that Chinese residents are looking for? Yeah, so when we look at what Chinese students want, specifically when they come overseas, there's different elements that play into that managed service side. So safety, security, there's always very high on the list. Proximity to universities is very high on the list. So I think there's just a lot of good things that PBSA have been able to offer the Chinese market. There's a built to them that the actual facilities, what they're looking for, things like wanting to have a non-sweet all plays into that safety of being in your own space and having your own comforts. Perhaps Gabriel, you might want to expand on that from what you've seen as well. Yeah, definitely. I think the word security is probably the most important one that you mentioned there. Not just in the traditional sense of being physically secure on site because there are a lot of reports in China in the domestic media about the safety and security of living abroad in Western countries such as the UK and the US. And how unsafe some of our big cities are for both petty and violent crime, some of which may be exaggerated some which may not be. But certainly compared to life in China in major cities, there is a big difference. So having things like 24 hours security in PBSA buildings is really, really important. But it's not just security in the physical sense. I think it's also in the operation and the financial sense, having all the bills included together, knowing what the price is going to be upfront, sometimes having the ability to pay everything upfront as well. Or at least to have a clear idea of what those costs are going to be. And the ease with which you transact with the professional business, I think, can afford a lot of security and a lot of reassurance to families in China who are sending their children abroad for the first time to study for a whole year. And I guess there's been lots of reports recently about that Chinese market diminishing. People aren't interested in studying in the UK anymore. I mean from your point of view, how much is that changing? How much is that scare mongering? Should the UK sector be worried about less Chinese students coming to live in the UK? It's a very good question. I think always everyone needs to be open-minded. I mean these trends shift so quickly. We live in this global political environment where we don't really know what certain leaders in the world are going to say next, which has a heavily, a heavy influence. Should I say on my traffic? So one year perhaps the UK might go for a negative trend, but then something happens in another market and that quickly change. When I was in China last week, there was lots of discussions around parents wanting to send their very young children to the UK for boarding school. And to get into the UK education system earlier. So it really depends who you speak to and then you just got to see what's actually happening on the ground as well. I've ever seen the numbers looking reasonably good for undergraduates. I think the concern overall especially
from operators that I speak to is the Chinese Postgrads. And that I think is more reflective, not just of China, but of a wider postgraduate trend. And that makes it very difficult for operators who have previously seen Chinese Postgrads in particular as a bit of a cash cow. There are some operators that have built their entire operating model on that. So I think, yes, you're right to talk about those those changing trends. But what are the numbers looking like? What do they look like over the past sort of couple of years or so? Yeah, definitely. I mean, just on that point, Dan, in the past few years, maybe from sort of 2017 to 22, 23, we had an absolute ball run in, you know, 10 percentage point growth each year and the number of Chinese Postgraduates coming to the UK. So, so while we're not seeing as much or as fast a growth from that peak in 2022, 23, which by the way was itself an exceptional year because of late COVID pandemics that happened on the Chinese mainland. We have seen a little bit of a dip in postgraduate acceptances depending on the exact data you use since then. Maybe it's three or four percent down year on year in the last academic cycle. I don't think that's anything to be hugely concerned with over the next five years, especially in combined with the data that you mentioned. I mean, UCAS is seeing many more and more Chinese students applying for undergraduate, perhaps a 15% increase depending on on when in the cycle you look for for the previous cycle, which is obviously brilliant, but because it provides housing providers with three years plus customers to look at rather than just that one year, which was so attractive for Chinese students coming to the UK. Yeah, I'm just going to add to that. I think where we need to look a bit closer, there is like more the local market, so the city markets where the different universities that are operating, when you look closer at the data, you see quite different trends. Some universities doing exceptionally well, some coming off for different reasons. So, whilst the kind of general direction, I don't think it's quite as bad as perhaps what people are thinking. Yeah, I was going to say, so I think in reality in the UK, we're just going to see different markets do very well, and so I'm not so well linked to Russell Groups, linked to QS performance, how they performing internationally, and it's worth mentioning. And I saw it firsthand in China, some of the universities out there doing very good job, better attracting domestic students. So, we just got to appreciate we're in a globally competitive environment now. And if we want to capture students to UK, we have to be aware that they're also applying for universities all around the world, and it's not just their applying for a few different ones in the UK anymore. That's absolutely true, Sam, that we are seeing a steady increase in the number of mainland Chinese students who are going to proximate countries, as in addition to mainland Chinese universities, which are climbing up the ranking. So, we're seeing more and more students study in South Korea, say for example, study in Malaysia, Thailand and other places like that. So, what we have to do as operators and as educational institutions in the UK is to remember why students want to come here, and certainly geopolitically in the past year, students want to come here because it's not the US, because it's not Canada, because it's not Australia. The Chinese government released data last year to show that the UK has overtaken the US finally for overseas studies from China as the largest destination for study. So, that's a promising sign for us, and I think that's only going to continue to benefit us with the chaos being caused by Donald Trump, and also some of the management enrollment limits in other anglophone markets as well. That's great, and that's really, really interesting. Here in you guys speak is, you know, there's so much we don't know about China and operators don't know about China, and what are the things that they should be looking at and thinking of and monitoring kind of over the next few years around? There's all lots of positive things that you're speaking about and what should they be aware of? Yeah, one of the key things I'd like to pick up on is individual city dynamics, which Sam has already touched on already. In the next few years, I think we're going to see an even bigger increase for the Chinese government to push Chinese students at both undergraduate level and postgraduate level to study course topics which are aligned with national development goals in key research areas, such as AI, other forms of technology. So, from our perspective, knowing those courses that are going to be valuable for Chinese students coming to the UK is going to be absolutely crucial and working with institutions to predict where those students are going to come. It's going to be essential for predicting your revenue in the next few years. I think from my side, there's perhaps been like an educational layer missing. I know Gabe and I have spent a lot of time trying to educate the market on how Chinese students behave, what their parents looking for, but I think if there was an ask today, it was the operators to spend a bit more time looking at the digital ecosystem. It was so interesting when I got the on this flight to China last week at the airport, a Heathrow, to get my immigration card. I had to scan a QR code with WeChat, which opened up a mini program and that's just touching the service. I just think if operators can bella understand that end-to-end user journey, it will allow us trying to help operators drive more direct sales, operate more efficiently as well. And there's a lot of similarities. It does feel alien on first impression, but when you understand platforms like WeChat and RedNote and Deweyin, there's a lot of similarities to Western platforms. And once you get the gist and you get the understanding, then that whole end-to-end user journey becomes easier to digest and understand. And maybe that's our job, right? Maybe we need to do a better job at educating the market and bringing a bit more of this conversation to the table. I mean, that's exactly what we're here today to do, I guess, and I think what you've really sort of touched on there is maybe one of these myths. You know, you guys are very much talking about direct marketing, that that's top of the funnel stuff. I can imagine that there's a lot of our audience that are thinking, yeah, but Chinese students find accommodation via marketplaces or an international education agent. Are you guys saying that's not the case? It's a good question. So a lot of Chinese students do find universities for an educational agent and some educational agents have good relationship with marketplaces. That's known. In terms of, is that only where they're looking, that's not the case. So I was looking at the data before this call. There are so many Chinese students that do look beyond just marketplaces, particularly at the research layer. They're on Chinese social media trying to understand about their living options in a city. They're then trying to understand what brands and what buildings are possible places that they could live. They then go looking on WeChat where they find many programs. They go to, well, they try to go to brand websites. There's lots of different ways that they find where they actually convert is a different story. And there are reasons why students might convert more through a marketplace and through direct at this moment in time, which I think we'll probably touch on at some point today. But to be direct, Chinese students are looking through multiple different channels to find their living arrangement and then they're converting through the one that perhaps offers the best price to give a bit of an indicator or the best service. And I guess that also speaks to Gabe, obviously, Ton. You don't just deal with brands in the real estate. Well, you know, you deal with lots of brands, you know, from fashion and food and, you know, all sorts of different things. So I guess that just replicates that behavior, you know, that young people, anybody like to do research before they buy something, you know, and I think quite often the sector just thinks that a potential buyer will go to a marketplace, put all their trust in that marketplace, do whatever the marketplace tells them and magically convert. And that doesn't sound like that's the case, you know, at all with their kind of buying behavior. I wonder where they might get that idea. Chinese students and their parents spend a huge amount of time researching across a whole lot of different areas, not just for study, as you say. As you say, we represent a number of different brands, you know, from skincare to luxury fashion to Heathrow Airport as Sam mentioned before. So making a decision to make a purchase is part of a multi-layered strategy of digital engagement with the brand itself and also with third parties such as aggregators. And because the marketplace aggregate pricing and availability and all this sorts of things, it's a very useful place for them to do that research. And if they are heavily incentivised to make the purchase within that, then they are likely to do so. However, it's evident growth of our Sam and my businesses over the past few years, but that's certainly not the case for the whole for the whole market. Those incentives do worry me. I have my gripes with marketplaces. In general, I've worked with them. I have seen the good, the bad and the very ugly. And, you know, I've always said that should be written into a contract that no marketplace does that because if you went to a hotel 20 years ago and said, by the way, in 20 years time, you're going to give away 20% of your booking revenue for every single room to a website effectively that is selling your rooms on your behalf. I think that they've said, you know, get lost. There's absolutely no way we're going to tolerate that. Now, it feels like PBSA is in a bit of a pivotal moment with marketplaces at the moment. But I want to, I want you guys to be able to showcase and talk about how you can also help to curate that brand directly. This is one of the first years that I've really seen clients of mine having commission levels pushed and driven. How can you persuade operators not to just lump in with marketplaces and to go that sort of direct route and carefully curate their brand? And is that something you feel you really need to do? I think just to kind of, I guess, pick up on one of the many points there, which is, you know, all really important. But I guess the one thing that's been like baffling and puzzling me is that point about direct bookings and that comparison to the hospitality market really. Gabe, Sam, can you see a time where the sector acts like the hospitality sector and offers a breath best price guarantee for booking directly? And who would this benefit most and is it possible and who would police it? But that's the only real way of kind of building in that direct brand equity, really. Yeah, I mean, some fantastic conversation down and Sarah's some really good points. I mean fundamentally if we're just looking at from the
student perspective that are wanting to study overseas, that themselves and their parents have got a budget. If given the opportunity, if they could go to one place and get that same room for 5% cheaper, where are they gonna go? And this is the position we find ourselves in, talking with operators about their direct marketing strategy. This is the environment we live in right now, right? So I mean, all we can say is based on the data the Chinese students are looking directly, they're spending time to engage with the brand. Many students inquire. I think there's a conversation on how can operators deploy more resource or give more time to convert Chinese students. And I think certain business models aren't quite set up effectively. If that inquiry is triaged out and it takes a few days to reply, we can't expect that Chinese students to stay around. But I think the two fundamentals behind it is price and service. I think the service is solvable, but the questions that I like to put back to the room as well is about the price. You know, I do believe that operators need to offer a competitive price if they want to actively persuade more Chinese students to live with them. And we can do the best job in the world at the marketing level. We can create the beautiful brand, but the student may end up converting with the marketplace if that room is 5, 6, 7% cheaper. So it's something that needs to be addressed really soon. And it's something I'm quite passionate about. And I think people need to have quite honest conversations. If they want direct sales to be effective, the platforms and the environment is there, but the thought and the process is therefore need to be deployed in that way. I mean, I know Sam that we've talked about it over the years. And I guess that's one of your concerns is the ability to actually transact a booking and deal with it. So like you said, you know, Tom will do a fantastic job at generating awareness. They'll come down to the WeChat mini program. What happens then? Because if you can't pay in an effective way that Chinese people want to pay with, then you're not going to go any further. If you can't access a website or booking platform, and it'd be in your language, or you can't speak to a booking consultant in your language, then how on earth would you complete that transaction? Guess, you know, quite frankly, has the sector got lazy? Is that in a too hard to deal with box, which is why they've ended up in this marketplace situation? Is it worth pursuing? Is it soldable? Well, it's 100% worth pursuing. I mean, talking about some operators, the money that they're spending with agencies, the direct marketing sort of investment is a fraction, right? So there's huge opportunity in cost savings and looking at that cost per acquisition. The reality is the technology is there. We can take payments through a mini program. It's as the operator got the right payment back in to support that. Maybe not. Could they accept the payment and reconcile it? differently? Yes, they can. So, and even booking integrations, we made a lot of progress in directly integrating with systems. But the whole end to end process is a bit dysfunctional. And at some point, the Chinese student probably will want to confirm their choice. They want some reassurance. They want to speak with the brand and the brand need to make their team available to comfort the student and steer them in the right direction. So none of this is a problem that can't be solved. It just requires a little bit more thought, a little bit more commitment. And we see how invested brands are in the marketplace. I do believe they could potentially give up some more time and spend more time looking at this direct strategy. And Gabe, maybe you could expand on that as well from your lens. Yeah, definitely. I agree with a lot of what has been said already. I think that there's no question that your agent relationships as an operator are very, very important. And they should remain so for certainly for most operators. But the real danger is giving away the sales funnel, which you already may have a little bit already, or you perhaps you haven't attempted already, to somebody else. Whereas in reality, it's not alchemy. It's something that you can replicate yourself to a smaller extent, built around your specific brand. You can tailor it specifically to your business as well. That's really the message I want to get out there. Because as you say, Dan, the danger is in the next few years that we see commissioned level rising, get operators who lose the ability to understand where their Chinese students are coming from. And there's such an important part of so many people's revenue and not understanding the sales funnel. You would never let that happen in the UK with your marketing team and with your sales team. So having a site team member or someone specifically there to nurture leads as they come in from marketing is absolutely essential to deliver that quality service. Because that's what Chinese students and parents really, really expect. It's a good level of service to build that trust in the brand quickly. So if you can do that in combination with a good quality digital marketing program and the right kind of techs, that's just a mini program, then there's no reason why you shouldn't be able to diversify away from specifically one agent in general. It's partly a terminology issue here that everything that you are by saying makes total sense to me as a marketer. You want to take control of your destiny. You want to make sure that you're marketing director of customers and ultimately you want the book direct with you. That's the Holy Grail. But is it far too often that the process of going through that is seen as in cost, not an investment, but it does take time. It takes an investment, but that investment will pay off. And how do you view that? Is that part of the challenge that you're finding? Yeah, I think the operators who have done the best job are exactly as you say, Dini, are the ones who see it as an investment, not an auto cost. It's an investment in the medium-term commercial success of your business and also the security of the revenue a few years down the line. Rather than this is an upfront cost that I have to deal with now, what I'm squeezed towards the end of this cycle. I think that's one of the key things to focus on. The fact that you're building brand equity. This isn't just purely an ROI play. And I think that's where marketplaces, obviously, they're just filling rooms, filling rooms constantly, whereas you're able to help to curate that brand. Now, Sam obviously leads a coming through the WeChat mini-programs that you're creating, which is great. That brings me back to my, literally, my first event in student housing was class conference. I think it was Lisbon back in the day, in 2015. And it was Luke Nolan from student.com, the guys from Uni places, someone else on stage. And I was from the hospitality and travel industry, knowing what I'd seen as how booking.com had approached hotels and just started saying, oh, yeah, we'll start at 5%, and then that's just been pushed and pushed and pushed to the point where booking.com or Airbnb, et cetera, 18 to 20%, that's what you're paying out. They did a Q&A session at the end, and I said, listen, how can we control what you're trying to do? You have big capital behind you. I think student.com had just raised something like $70 million at the time. You've got big capital behind you. You're going to get really increasingly aggressive. How can this be controlled? And their answer was, you still have to curate your own brand. This was the very nascent days of the student housing marketplace, and there was a free, there was a real understanding there. From those CEOs that marketplaces should be a bit of an extension of your marketing and leasing arms, but should not be the entire sales funnel or marketing budget. And I do see that that is where some operators are going. But I think they are, there were some of those operators that started off as owner operators and now find themselves doing a bit more third party. And I think there is a bit more understanding from investors that marketplaces cost a lot of money without shadow of a doubt. And unfortunately, you typically need marketplaces when the prices are highest. August, you might be looking at 20% if you've got, you know, if you've got rooms in Nottingham or Sheffield or even the likes of Bristol. And that's not me doing a disservice to marketplaces. They do certainly offer an opportunity to fill beds at certain times in certain locations. But you really do have to pay quite a lot for it. And it's a short term investment. Like you sign year after year after year and it resets every single year. Of course, there's a little bit of a relationship built up there with marketplaces. But that is where again, building your brand locally in-source makes a massive difference. And I think that is the opportunity that you've got to sort of say, listen, this shouldn't be seen as just an alternative to marketplaces. This should be one of the core parts of the marketing strategy. And Sarah, Dini, you must deal with this constantly with people saying, how do I fill beds? Okay, go to marketplaces. Well, that's a short term bandaid. You know, you can work long term and start to curate your brand. That's where I was going with the next question really, is why should an operator want their own, want to direct market in China? What's the benefit? How would a resident, I guess, behave differently if you had acquired them directly versus if you had acquired them via a marketplace? You know, what is the long term benefit? I just wanted to touch on the brand point, but there's no coincidence when you go into marketplaces a lot of time, the brand of the operator is removed. You see it in the listings. And that's strategic is because the marketplace doesn't necessarily want the student to go looking for the brand. So the brand's very important. And I think that must be sort of addressed and understood. So brand building needs to stay. Yeah, so the point of why a company or why an operator might want to have a brand and directly market it, the end of the day when, as soon as that student lands and is living, they're living with you, right? And if you have a diluted presence, maybe the Chinese student doesn't even know. So there's no engagement really between the brand and the student unless that's built. And we've had a really successful period recently helping operators with rebookers. And it's real evidence that Chinese students do want to engage with the brand directly. They do want to understand. They do want to feel part of something. And just the borough sort of thoughts. I know there's been a lot of discussion about the model with, there's been a lot of discussion about the model with hospitality and booking.com and stuff. But I do believe operators need to think a little bit through the lens of hospitality. could they give their Chinese students?
a better experience themselves across as a brand but also on the ground and that's all going to benefit and I think the end goal here is ensuring that Chinese student acquisition is diverse, it's not funneled through one player. Sam I think that's such a good point I think especially your point about experience is really really important you know Chinese customers across sectors are looking for experiential consumption and it goes and it goes without saying I think to everyone listening to this that you are selling an experience when you're coming to the UK to study and to stay at a premium accommodation building and brand is therefore essential for you for your identity you know for customer loyalty, for retention of you said Sam as well as to attract you customers and then also crucially to differentiate yourself from competitors. We've got absolutely great housing stock for students here in the UK but we completely blunt for a lot of Chinese students who are looking where to study in the UK it's quite hard for them to see big differences and a big way for you to differentiate yourself is through that brand and to sell that sense of experience that may come from you know how you utilize your onsite events what kind of brand you have what kind of online engagement activities you have to really bring the whole experience to life that is something that people do absolutely across sectors in order to win preference and to win customers in China and in the PBSA and the BTR and that in the housing sector is absolutely crucial. So I think that's been part of our frustration being in the PBSA sector for sale on Sarah and I brand has always been ignored and it's been really starved brand market has been starved that is changing in the sector and I think brands are beginning to believe in the power of brand and make that investment. I guess really Sam I just wanted to go back to what you said right the start of this and there's actually the second person that said this to me in the space of a week that actually more and more Chinese students are being sent over here from a boarding school age a much earlier age and for me that plays into the brand question that actually if they've got a brand and they're in the UK and then they go back to China when they're making a decision on university and speak to their parents you need to be out access that brand that they've talking about and that awareness much much up to earlier kind of what's your views on that. I think when we look at the fundamentals of Chinese marketing one of the things I learned very quickly from 2015 was just the power of word of mouth right and and what does that really mean what we want Chinese students consumers parents to talk positively about their experience the brand that they're living with so if that's not present if there's no brand there's no experience you're not going to win that so you know it's so so important you know I know we're banging the same drum now but yeah like I don't know what else I can say on that matter. I think one thing that I'd like to touch on before we kind of wrap up the state is another elephant in the room is you know we've talked a lot over the past year really about the popularity of build to rent with young people particularly with students and I think we've we've seen it we've heard it we know it's going on so why might Chinese students be choosing to live in a build to rent building over a PBSA building is there something about the product that PBSA is missing? I think part of it is flexibility of contract length I think part of it is amenities I see increasingly students asking if they can bring their pets for example they might want to adopt a pet when they come here they might already be here and have a pet I think some of those are are quite attractive to BTR yes so so that's definitely something we're monitoring very closely in the last couple of years how about you Sam what do you think? But just quickly what about laundry as well because I doing the many reports that I've had to do in leads in particular where there's a strong BTR market and a strong PBSA market a lot of the PBSA general managers in particular were getting direct feedback from students saying that they liked the fact that BTR had washing machines in each apartment or potentially even in each studio in some cases in leads in BTR compared to the usual communal places that won't be you know that won't be used to anyone I don't think but have you had much feedback on that? 100% I mean in some of the listings about these buildings on the mini apps we literally say laundry or washing machine in room so there's some very important amenities that the Chinese students are after I mean what I can share is it was probably 2023 that I was on a different pop cast webinar I was talking about the trend of Chinese students looking at built-to-rent options typically their students that have been in the UK for more than a year that's one area that's quite interesting from a marketplace perspective built to rent isn't as established so students quite often come through PBSA University accommodation they then walk around the city they see this beautiful buildings they go inside they see all these great amenities facilities and they say see a price that if they're living with their their partner it's all quite competitive so it's no surprise to me that it's attractive and and the data supports that and there's been a few times that over the year where operators have reached out from PBSA and said what's going on in the city and I can see in the data that a lot of that traffic is going to build to rent so I think it's here to stay and I think we just have to accept that the built-to-rent sector is going to carve away at the Chinese market or is certainly going to appeal to them okay I was just going to go back to Gabe's previous point and it is this one of the myths that you were talking about flexibility with contract and I think one of the massive assumptions is Chinese students want 51 week contracts and you know are you saying that's not the case why would they want a shorter contract? For quite a few different reasons I've worked on some BTR projects in the last few years and there was a you know a diverse range of of contract links that people were asking for either because they're coming for pre-sessional English courses say for example over the summer or they're coming for for a semester project during the cycle so there's there's lots of different reasons that certainly I've encountered why people are going for a flexible length and even if the majority do go for those whole years you said there and a lot of Chinese students during the summers so looking for jobs you know in different potential markets they travel Europe so there's lots of you know real reasons why they would be looking for that flexibility. That's a fantastic point Sam because of the the graduate route which the government has just committed to keeping so for 18 months after they graduate say they've been the PBSA or BTR they'll then be looking for somewhere to live while they look for a job or they start their job in the UK and then ideally go on to sponsorship from there so that's an opportunity for BTR as well. And I guess it goes into what we're saying at the beginning that you know post-graduates may have traditionally wanted that 51-week contract but actually if we're looking at more under-graduates you know we know all under-graduates what the shortest possible contract generally that fits in with their their course you know and then in the summer you know if Chinese students are guests are staying here they you know they have other things to do in the summer or if they know that they're going to be graduating maybe they don't want to move again you know if they're going to be here for a year or here for three years and then work then why wouldn't they go to BTR where they can stay as long as they want without you know without the hassle of moving again which again I guess feeds back to what we're talking about brand you know if they found that brand if they're loyal to that brand if they have an amazing experience then they don't want to move so it is incredibly important. We we do need to wrap up soon but I think we need to look ahead now I think we've you know done a really you know thank you so much Sam and Gabe for kind of giving us a really great picture of the market right now but you know where where are we going with this if if nothing changes and everybody ignores your advice what's going to happen in the next five years if people don't make a change what what's your predictions I'll go to you first Gabe. I think there's a danger that we as an industry see this market to several key players who are then able to obliterate all of the data as well as the market itself which is only a danger for individual operators but also for the health of the industry overall. And so I guess bury that in mind what would a healthy diversified China strategy look like in 12 months time what what would you like to see if people heed your advice. Good question again I think first of all like people are looking at it as marketplace or direct I think we need to take a step back and just look at what is our Chinese recruitment strategy as a whole we're going to need to invest in the brand so that Chinese students and parents understand who it is they're going to be living with we need to keep our source of acquisition I don't diversified we need to be able to convert Chinese students effectively in house not just rely on outsiders to support that journey I think if if we can take that holistic approach it will be a very successful period ahead and I don't think any of that is unachievable I think all of the frameworks there I think the tools the platforms the partners are there to do so it's just about execution now and that that's my message really let's just get this funnel working effectively and looking at this elistically rather than one or the other yeah definitely it's it's about nourishing and curating as you know a range of relationships with key agent partners who are absolutely crucial and due to a really good job as as as we've talked about earlier but also taking a step back and saying what are the hygiene factors that I can address for me personally as a brand to encourage people to discover me not just so they book directly I mean it also helps with your with your agent sales as well and so that your brand is well represented in China and those who want to come to you to book ideally to get the best deal are able to do so fantastic and I guess if anybody only listens to like two minutes of this whole amazing podcast what would one message to to operators developers investors be it's worth your time and effort to take ownership over your how your company is perceived in China and over two or three years you will be able to reap those dividends well put Gabriel I think for me like you have to have a direct sale strategy if you want to maintain your brand equity you have to have a direct strategy and if you give that up now it will be very difficult to unpick that in the future and I think
I think that's a fair point just to leave that on. - Perfect, well put, perfect. Thank you both so much. That was fascinating. I learnt so much, and I'm sure the audience will have as well. And I think I guess the clear themes that have come out of that conversation is really about control. It's about operators, developers, investors, thinking about how they control their narratives and making sure they're in control of their destiny and their brand effectively. I guess it's a big strategic play. It comes from the topic, comes from, what does your investment look like, how long are you holding the properties for? What's your goal? Are you talking about occupancy? Are you talking about revenue? What budgets have you got in place? We know as marketers that making sure the right budget in the right place, but longevity for brand building is not always there. So I think our message probably to the audiences to be looking at how they operate on a whole from a strategic point of view and how market is directly to the Chinese audience would fit in with that as well. So you've given us so much to think about. I know that I'll be thinking about this conversation for a long time. And we probably only touch the surface, to be honest. So if you do want to know more and we still strongly urge that you do, please get in contact with Sal and Gabriel. And thank you all for listening everyone as well. If you've got any other top topics or ideas of what you want us to cover for the rest of the season, then please get in touch at
[email protected] and see you next week for more views, news and insights from the world of shared living.
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