How to Launch a Loyalty Program in China With Solutions Like a WeChat Mini-App

Ready to learn about the best loyalty program practices in China? Discover the trends, strategies and features for success in China.

How to Launch a Loyalty Program in China With Solutions Like WeChat Integration

The biggest challenge of winning over the Asia-Pacific demographic as a Western brand lies in understanding differences in customer behavior and loyalty. Big brands with decades of history serving the European or US market often learn the hard way that their tried-and-tested marketing campaigns fail in the Land of the Red Dragon. The same goes for loyalty programs in China: the only way to compete with the loyalty solutions of home-grown brands is to adapt to local customs. Especially as the loyalty program market in the country will increase from 15.7 billion in 2021 to over 29 billion US dollars by 2026.

China is much more developed in terms of mobile engagement than Western people than marketers can imagine. Their world is truly mobile-first, showing an example to the rest of the world.

So get ready, because this guide not only shows you the most vital customer retention trends, but also analyses the features of best-in-class loyalty programs in China.

What Does Brand Loyalty Mean in China?

Over the past twenty years, Asia-Pacific countries – China in particular – have seen a sudden increase in opportunities, both in terms of products and services. Chinese customers have more and more access to Western brands thanks to the new travel and eCommerce opportunities. Not to mention that Western heritage brands are actively seeking to establish a presence in the country. This creates a peculiar situation where a country with tremendous shopping potential is only now getting used to having a large variety of products from the US and Europe. Therefore, the concept of brand loyalty towards Western brands is still in an early phase.

We got to talk with Joanne Yulan Jong, founder of Yulan Creative, fashion strategy expert, and author of the book “Fashion Switch”, and asked her about building customer loyalty in China and across Asia.

Fashion expert Joanne Yulan Jong explains iconic customer trends and brand loyalty in China, recounting several examples of Western companies who have won over shoppers in this episode of Customer Loyalty Minutes.

One big takeaway from this video is that most marketing channels that are popular in the US or Europe have a Chinese counterpart. For example, Facebook’s equivalent is WeChat, though it’s more universally used, and has uses beyond networking, including product discovery and online purchases. There are also social media platforms unique to the country, such as the XiaoHongShu (Little Red Book) which is a social eCommerce app that specializes in product reviews. Marketers who wish to foster brand loyalty in China should master these platforms, otherwise they won’t be able to reach a wide audience.

Understanding these platforms is only the beginning – mastering communication on them is what’s really important. It’s not enough to simply translate your Western marketing strategies – it’s a trap Dolce Gabbana already stepped into a few years ago.

“Dolce Gabbana’s cultural debacle clearly shows that a “globalized approach” doesn’t equal “simplified communication”. In the next few years, it’ll be crucial for companies to engage in a meaningful discussion with their Asian customers. The ability to culturally connect with customers in their own reality will be the next important challenge for companies – especially for global ones.”

Federica Carlotto

Cultural Strategist and Course Leader at Sotheby’s Institute of Art

Customer Retention in the Chinese Market

Because of the challenges, the Asian market is still uncharted territory for most Western brands and retailers… but not for long. The window of opportunity to capitalize on the freshness of brand loyalty and establish your presence in China and Asia is rapidly closing. The more players that enter the field, the smaller the metaphorical slice of the pie will be.

However, western competitors might be the least of your worries, since China also has its own brands. Homegrown businesses start with an advantage as they understand the market better than anyone else, making the competition even fiercer.

Headshot of Angelo Valentino

“Helping Asian companies is far-far easier in some respects because they are fast-moving and reactive. They listen, make changes, spend money and make smart hires as soon as you make them aware of opportunities, especially with long-term customer retention, as consumers increase their spending potential.”

Angelo Valentino

Global Fashion Business Consultant

But don’t forget that we’re talking about a high-risk, high-reward scenario.  Italian luxury fashion house Ermenegildo Zegna was the first company of its kind to realize the potential of the Chinese audience back in 1991, and now China is the leading market for Zegna in terms of revenue.

Ermenegildo Zegna’s strong focus on China shows on their website, which is customized for local customer
Ermenegildo Zegna’s strong focus on China shows on their website as well, which is customized for local customers. This kind of personalization can go a long way.

“Asians, whilst they are always on the lookout for a good deal, will spend if the brand has authority. They are happy to use labels to impress peers and they really love the status and security of being part of the trend and ‘tribe’. Their retention would be less on price or value but, instead newness, the ability to access VIP or limited editions and of course impeccable customer service.”

Joanne Yulan Jong

Fashion Strategist, Founder of Yulan Creative, Author of ‘Fashion Switch’

Top 5 Trends to Keep in Mind When Entering the Chinese Market

In order to engage the modern Chinese customer, you should pay attention to the following trends:

  1. Still on a journey of discovery: Since the audience hasn’t been exposed to western heritage brands for long, companies aren’t able to take brand recognition for granted, and they need to build brand awareness from the ground up. Also, considering China’s development on mobile engagement, it’s highly recommended to partner with a local partner.
  2. Strong digital mindset: Chinese customers discover brands via social media interactions or by browsing for deals on the internet. In this sense, having a mobile presence – or even better, omnichannel – is an absolute necessity.
  3. Hunger for novelty: They have an insatiable appetite for freshness and modernity. If you can offer something new and exciting to your customers each week, they’ll no doubt keep showing up and eventually become loyal buyers.
  4. Authenticity is everything: Customers are very discerning when it comes to entering the purchase cycle. They are cautious, and companies must earn their trust. To do so, you must show that your products have real value.
  5. You need a loyalty program: Reward systems and gamified incentives are a staple in China and customers expect them. Making an entrance without a loyalty program of your own puts you at a disadvantage.

“Asian consumers prefer to avoid human contact while buying. They are very sensitive to alternative pricing. And how will the market look like in 5 years? More specialty stores, less monobrand stores in key cities, min 50% of business through eCommerce, and multi-brand stores playing like showrooms.”

Andrea Doroldi

Senior Executive in Marketing, Brand Management, Business Development, Sales, Retail

The Difference Between Loyalty Programs in the West and Asia

In China, the foundation for modern loyalty programs was laid by Tencent and Alibaba. Therefore culture and customer expectations regarding loyalty programs in China are vastly different compared to loyalty solutions in Europe or the US.

  • Loyalty programs in China are spread across the whole customer journey, including acquisition, purchase, and advocacy (while in the West, loyalty programs are seen as retention tools). As a result, reward systems are far more sophisticated, with plenty of touchpoints to engage customers.
  • Gamification is very prevalent. Chinese customers want to be rewarded frequently, even if the incentive is just a small discount. Most of these systems are tied to WeChat, further strengthening the social aspect.
  • Community building is very important. Most loyalty features involve social media in one way or another. To give you an example, some loyalty programs offer group incentives through WeChat, where the points of all members of the group are added together, making it easier for them to reach a grand prize that everyone can enjoy.
  • Chinese customers are much more willing to share personal information, making loyalty programs an ideal tool for collecting data. In exchange, progress has to be synced across all digital platforms. Whether it’s an offline, online or WeChat purchase, you must have the capability to sync data into a holistic customer profile.
Starbucks revamped its existing loyalty structure and added tiers to cater to the local audience in China.
The large majority of loyalty programs in China are tier-based to a degree that upon entering the market, Starbucks completely revamped its existing loyalty structure and added tiers to cater to the local audience. As a result, the company saw a rise in revenue despite the COVID outbreak.

7 Ways to Make a Loyalty Program in China Successful

With the general sentiment towards loyalty programs in China explained, it’s time to take a look at what features and strategies you should use to win hearts among the Chinese audience.

1. Visibility

There’s a lot of competition for people’s attention in the loyalty program market. As a direct result, companies invest a lot of money and effort marketing their reward system. If you plan to launch your own program, make sure to enter the market with a bang, and advertise it on every possible channel, especially WeChat.

However, visibility doesn’t end with marketing. Chinese companies put a lot of emphasis on having a clear value proposition. They also strive for easy enrollment, allowing people to join with a few clicks and giving them the option to complete their profile later on. Later on they send regular push notifications, reminding members of the benefits.

Our ebook demonstrates a prudent approach to budget planning, which will come in handy when planning the debut of your loyalty program in China.

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2. Tiers

As mentioned earlier, tiers are standard at this point in China. One thing to be aware of is that tiered reward structures are treated differently there. Most notably, each tier bracket is designed to cater to a specific customer demographic.

In the West higher levels usually only change the amount of the benefit, with a few juicy rewards reserved for Platinum members. In China, the lowest tiers usually feature gamified rewards, such as lotteries, to hook members. Mid-tier rewards introduce discounts, because at this point members have proven themselves to be worthy of them. While the best, most exclusive benefits, like early access, are kept for high-tier loyalty program members.

Special treatment is a relevant trend all across Asia: Singapore-based fashion brand Love, Bonito gives their Gold-tier members free stylist advice from popular influencers.

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3. Experiential Rewards

When it comes to rewards, Chinese customers have high expectations. To begin with, they expect small incentives from the very first moment they enroll in the program. Most retailers in China, therefore, offer small product samples as an appetizer. This way people get a taste of the benefits program. Others hand out discounts that are small enough to not put a dent in the profit margin, but still show goodwill towards customers. Yet others may offer special treatment to show their appreciation.

Sephora’s loyalty program in China.
In Sephora’s loyalty program, members receive endless beauty tips as well as rewards for inviting their friends to sign up and try more products. The company also organizes live broadcasts where top beauty opinion leaders interact with the audience.

4. Subscription Programs

While in the US very few brands experiment with subscription-based loyalty programs (except for a few notable examples, like Amazon), in China best-in-class reward programs tend to incorporate subscription-based models into their system.

The result is a hybrid-style structure. Take Chinese kidswear retailer Kidswant for example. The company’s loyalty program has a free section with eight tiers, accessible to everyone. But there are two subscription plans (one for mothers-to-be and another for families) which give eligible members bonus discounts and gift boxes.

Kidswant’s loyalty program in China.
There are more than 2 million black gold members in the Kidswant membership system, and the annual output value of a single customer of black gold members is more than 10 times that of ordinary members.

5. Personalization

In Chinese loyalty programs, coupons are based heavily on the customer’s behavior. This is due to company investment in collecting user data. This allows them to personalize their offerings, and push different offers and content based on the member’s purchase history, user reviews and product preferences.

This is especially true for WeChat. Members often receive an entirely different offer feed on their social media page than their friends, based on customer activity. In China, personalization goes to such an extent that by contacting customer service, you’ll be put in touch with store associates based on your location data.

Pandora's WeChat mini program, “E jian lian ai”.
Through Pandora’s WeChat mini program, “E jian lian ai”, users can purchase customized gifts and add personalized messages for their WeChat friends. Recipients redeem the gift and receive personalized messages through the link to the mini program.

6. Gamification

It cannot be stressed enough how important it is to have a presence on WeChat. The platform is more than just the Chinese equivalent of Facebook; you can pay, order a taxi, watch live streamings, all major Chinese brands sell their products directly through WeChat, and members receive personalized product feed based on their purchase history.

Of course, there are other ways to gamify the reward experience. In our look at the customer lifecycle, we analyzed a company that integrated a digital crane game into its program, giving players a definitive arcade-like experience.

Three quiz-like gamified survey questions asking people to share their preferences.
The easiest way to collect data with a loyalty program is through gamified profiling.

7. Loyalty Programs on WeChat

To take the most advantage of China’s largest social platform, you should extend your loyalty program capabilities to WeChat by creating a mini-app. The Chinese audience is highly familiar with using the platform’s capabilities (such as referring friends, redeeming loyalty program rewards and sharing product pages for benefits), so you can go all out, as members won’t require any hand-holding.

Carrefour’s loyalty program in China.
Carrefour China – a leading multinational corporation specialized in retail – launched a WeChat-only program, allowing customers to collect stamps for rewards from Jamie Oliver’s line of kitchen essentials.
Headshot of Monica Le, CLMP, Co-founder of AMM Limited

My best advice for companies planning to launch a loyalty program involving WeChat is to understand the WeChat Ecosystem and to plan the loyalty program on Wechat with specific functionalities included for the company’s CRM development. It’s not enough to just set up the program on WeChat: they need to have a clear objective on how to leverage the WeChat channel to recruit new customers and engage old ones. Last but not least, companies need to have a deeper understanding of data privacy rules in China and see how to plan for data storage & exchange

Monica Le

Headshot of Monica Le, CLMP, Co-founder of AMM Limited

10 Inspiring Loyalty Programs That Are Beloved in China

1. Cathay Pacific: Marco Polo Club

The flag carrier of Hong Kong, Cathay Pacific is the world’s tenth largest airline measured by sales, and fourteenth largest measured by market capitalization. The company’s four-tiered loyalty program, Marco Polo Club, is shared by Cathay Pacific and Cathay Dragon. Membership in the club makes traveling smoother and more enjoyable.

Marco Polo Club, is shared by Cathay Pacific and Cathay Dragon
Besides the standard membership benefits associated with each level, tiers also unlock optional benefits that can be redeemed with points.
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Why it works:

  • Members earn club points whenever they fly in eligible fare classes with Cathay Pacific or Cathay Dragon.
  • Although customers have to pay a one-time fee of $100 to become a member. Afterwards they can renew their membership on an annual basis using loyalty points.
  • Benefits like extra-legroom seats, priority waitlisting, lounge access for friends and family members, and other VIP treatments truly make traveling a more pleasant experience.
  • Marco Polo Club members automatically become Asia Miles members as well, this provides members a variety of benefits that complement the privileges offered by Marco Polo Club.

2. Hainan Airlines: Fortune Wings Club

Airlines and loyalty programs have gone hand-in-hand since almost the very beginning, so it comes as no surprise that the 4th largest airline in mainland China offers an elite rewards system with tiers and exclusive membership perks. The Fortune Wings Club, a global frequent flyer program, has five tiers that are based on total customer spend.

The Fortune Wings Club, a global frequent flyer program, includes five tiers that are based on total customer spend.
Interestingly, freshly enrolled members don’t automatically start out as tiered members. Instead, they have to spend a fixed amount of money to enter into the first tier.
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Why it works:

  • Members earn points by flying with any of the FWC member and partner airlines, so it’s easier to earn free rewards.
  • They also receive additional points with non-flight actions, such as making a purchase from partners or participating in promotional events.
  • Travelers earn extra award points when they stay at hotels, shop with credit cards, and rent a car.
  • Benefits include a priority waiting list, free upgrades, free refunds and VIP lounges.

3. Alibaba: ‘88 Membership Club’

Chinese multinational technology company Alibaba specializes in e-commerce, retail, internet, and technology. With 500 million users, Alibaba has played a fundamental role in revolutionizing loyalty programs in China. Alibaba rewards its most active members with exclusive services. Their loyalty program has three tiers based on collected points: Standard, Super, and APASS.

Alibaba’s loyalty program in China.
Over 50 brands have signed on as partners in the Alibaba ecosystem, including Hugo Boss, Clarks and L’Oreal. Members can engage with the program on any of these sites.
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Why it works:

  • Members are encouraged to earn points and privileges by sharing product pages on social media, posting questions in community forums, and writing product reviews that are useful to other customers.
  • Dedicated members are eligible for benefits like tickets to private concerts, discounts and additional services at partner companies.
  • Alibaba also added a special 88 VIP tier. It’s only available for users with at least 1,000 points, although they still need to pay an annual fee. In exchange, members are eligible for a permanent 5% discount on all services across affiliated brands.
  • Alibaba creates a seamless customer experience across its ecosystem for its most active shoppers. This not only deepens engagement with the platform, but also offers more incentives for members to shop and have fun.

4. Starbucks: Starbucks Rewards

Not only did Starbucks completely overhaul its loyalty program structure to meet the expectations of the Chinese audience, it has since become the leading coffee chain in the country.

There are multiple ways to join the Starbucks Rewards program, including the Starbucks China App and WeChat
There are multiple ways to join the Starbucks Rewards program, including the Starbucks China App, WeChat, or even through third-party partners designated by Starbucks.
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Why it works:

  • Starbucks uses digital platforms to build a community around its brand that is available even when customers aren’t in their shop locations.
  • The loyalty program has three tiers: Welcome, Green and Gold. The program is quite straightforward: members collect Stars with each purchase and receive member benefits
  • The company added fun to its loyalty program through a gamified lottery system, in which members have the chance to win a beverage or food item every day for a month.
  • Starbucks knows their customers, meaning what they’re buying, which stores they’re going to, and their journey over time with the brand. This helps them create more relevant, customized offers for them.

5. Luckin Coffee’s Loyalty Program

Luckin Coffee is a Chinese coffeehouse chain and the biggest competitor of Starbucks. The company takes a different approach to rewarding loyalty, leaning more heavily towards providing free coffee instead of focusing on point collection and milestones. Customers need to download their app to order and pay for drinks online.

Luckin Coffee loyalty program in China.
Luckin Coffee is one of the first retail brands to become cashless: every coffee you receive or purchase requires you to use the company’s app or WeChat to pay and earn rewards.
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Why it works:

  • The company has responded to the greatest pain point for customers in the coffee market: expensive prices. To address it, they continuously provide customers with coupons and chances to get a free coffee.
  • Members are also rewarded outside of the buying cycle, receiving free coffee when they refer a friend.
  • Retention and motivation are consistent goals for Luckin, so the company gives its members regular benefits, making customers consistently pay attention. In turn, customers continue to consume, thus forming new habits.
  • In the Luckin app, people can see the cooperation between Luckin coffee and several banks, as well as their partnership with online shopping app Jingdong, which allows Luckin to highlight certain benefits and rewards , such as using bank credits toward drink coupons and 10 Yuan off the first order.

In the Luckin app, people can see the cooperation between Luckin coffee and several banks, as well as their partnership with online shopping app Jingdong, which allows Luckin to highlight certain benefits and rewards , such as using bank credits toward drink coupons and 10 Yuan off the first order.

6. Chow Tai Fook: CTF Club

Hong Kong-based jewelry company Chow Tai Fook has 2,200 stores across 500 cities worldwide, including Hong Kong, mainland China, the US, Singapore, Malaysia and South Korea. The Chow Tai Fook Membership Programme is designed to enhance customers’ shopping experience and suit their elegant and refined style.

CTF Club, a loyalty program in China.
At CTF Club, membership benefits include access to the loyalty app, as well as special members-only events, personalized VIP treatment, a free jewelry cleaning service and permanent discounts.
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Why it works:

  • The four-tiered loyalty program culminates in the prestigious Diamond membership, making customers feel very special.
  • When members enter a tier, their status is effective for 2 years.
  • Once members have spent enough to qualify for a higher tier, they are automatically upgraded and presented with a brand new personalized membership card.
  • Members receive a valuable birthday gift, depending on the tier they’re in, which they can select from the Birthday Gift Gallery. This way customers are even more excited when their special day arrives.

7. Pinduoduo Card Program

Pinduoduo is a Chinese e-commerce platform that closely follows Alibaba. The store’s interface looks more like a Facebook newsfeed than an Amazon-like digital storefront, which goes to show the impact of social media sites on Chinese retail.

Pinduoduo’s loyalty program in China.
Members of the Pinduoduo loyalty program can log in at any time to see products that the AI engine has recommended specifically for them, and quickly get a group together to score great deals.
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Why it works:

  • Pinduoduo is one of the first companies to successfully create a social shopping experience online, and has accelerated the transition of commerce from offline to online in China.
  • The company has program with tiers: Free Pass Card, Black Brand Card, and the Brand Card. Upper-tier members can share their brand cards with friends via WeChat, to encourage their friends to browse and buy branded products from Pinduoduo.
  • The program is designed to encourage users to write reviews and to save money using vouchers and special discounts. Also, their daily check-in is a simple yet brilliant feature that encourages users to engage with Pinduoduo on a daily basis.
  • Members of the Pinduoduo loyalty program can log in at any time to see products that the AI engine has recommended specifically for them, and quickly get a group together to score great deals.

8. Joy City: Joy Pay App and WeChat Mini Program

Joy City is a large department store chain in China with over 3 million loyalty program members. One of the most notable features is the added coalition loyalty capabilities that ensure that members can continue reaping the program’s benefits at affiliate brands.

Joy City’s loyalty program in China.
Joy City also implemented reward sharing with O2O platforms such as DiDi Chuxing (China’s Uber) and Alibaba Koubei.
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Why it works:

  • The main structure revolves around collecting points, which can be done at any of the brands under the Joy City umbrella.
  • The program awards points for any purchase regardless of the store or brand, and points can be used toward a variety of services, such as parking fees.
  • Joy City has also implemented sharing of benefit rewards with O2O platforms such as DiDi Chuxing (China’s Uber) and Alibaba Koubei (a group buying app).
  • The app tracks the point balance in real time, and members of certain venues receive incentives like free doctors’ appointments, medical examinations, and other family health benefits.

9. Coach: WeChat loyalty program

Coach is an American company specializing in luxury accessories such as handbags, with 300 stores in mainland China. Demonstrating a perfect understanding of its audience, the brand launched a WeChat-based loyalty program.

Coach’s loyalty program in China.
Coach also runs thematic reward campaigns, such as a Mother’s Day initiative asking customers to upload photos of their family.
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Why it works:

  • By following Coach’s WeChat official account, customers can manage their personal information — including membership cards and coupons — unlock exclusive offers, and get personalized services in the VIP Center.
  • Coach’s official account also provides information about promotions, new collections, and product recommendations.
  • Both the VIP center and the official account provide links to Coach’s mini-program. The mini-program mainly works as a WeChat store. In addition to product sales, it also provides a store locator and online customer services.
  • The brand’s WeChat account provides customer services, extensive introductions of products and campaigns, and access to the Wechat store.

10. McDonald’s Loyalty Program Integration With Ele.me

Despite having 3,100 McDonald’s locations in mainland China, the company has augmented its presence by partnering with the on-demand delivery platform Ele.me, which is a subsidiary of Alibaba.

McDonald’s loyalty program in China.
Ele.me users can activate a McDonald’s membership card with just one click on the app to earn loyalty points for purchases.
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Why it works:

  • The Ele.me service helps McDonald’s China seamlessly connect its online and offline operations.
  • The program rewards members with points for purchases made in-store or via its app and mini-program.
  • Integrating their loyalty program with Ele.me supports the company in providing more customers with a complete set of membership services and benefits, which ultimately enhances the delivery experience.
  • Activating the membership card is easy, it requires only one click on the app. Then, customers can start earning points for purchases and receiving vouchers.

Start Your Journey to the Land of the Red Dragon

Achieving brand loyalty in China is a daunting task, but with the right strategy, it’s entirely possible. And if you get it right, you’ll no doubt see a drastic increase in your bottom line. If you are up for the challenge and interested in seeing the capabilities that Antavo offers as a pure-play loyalty provider, feel free to book a demo or include us in your loyalty program RFP.

In the meantime, we invite you to learn more about creating a next-gen loyalty program with our guide to reward systems.

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Headshot of Zsuzsa Kecsmar, Co-founder, CMO and Head of Partnerships at Antavo

Zsuzsa Kecsmar

Zsuzsa is the Chief Strategy Officer & Co-founder of Antavo. She has experienced Antavo grow from a startup into a scaleup. Listed by Forbes as one of Europe’s top 100 female founders in tech, Zsuzsa is a former journalist recognized by the European Commission.

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