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CHINESE tourists are spending more than ever on holidays with a projected growth of US$315 billion in 2017 to US$457 billion in 2020.
And while many retail markets have pigeonholed the Chinese and their traveling habits, studies have shown that there’s no “one size fits all” approach when catering to them.
A joint study by retail think tank Fung Global Retail & Technology and consulting firm China Luxury Advisors revealed that Chinese tourists have increasingly diversified in terms of demographics and travel experience needs.
Renee Hartmann, co-founder at China Luxury Advisors told Travel Wire Asia, “There is no one type of Chinese traveler, and it’s important to target products, services and marketing efforts accordingly: Tier 1 vs Tier 2, groups vs individual travelers, millennials vs baby boomers, multi-generational families vs couples.”
When it comes to shopping, it’ll come to no surprise that they’ve remained the world’s biggest force in terms of spending power. A growing middle class and the accessibility of products and payment services have largely contributed to this, something that Asian and European markets are trying to capitalize on.
Cultural curiosity
More Chinese tourists are inclined to try local delicacies when overseas. Source: Phuong D. Nguyen/Shutterstock
With higher spending power comes increased sophistication. Forget imitation goods; the “new wave” of Chinese tourists are found to be more and more discerning in their taste, and are spending more on luxury goods and experiences than ever before.
Deborah Weinswig, managing director of Fung Global Retail & Technology, told Travel Wire Asia that this sophistication stems from experience in travel. As Chinese travelers become more comfortable with overseas travel, their expectations begin to shift.
The study showed that 67 percent of those surveyed have traveled more than once in the past 12 months, and have visited an average of 2.3 destinations. And interestingly, those from lower-tier cities spend an average of US$2,449, 10 percent higher than tourists from tier-one cities; they also travel more frequently than their wealthier counterparts.
This increased sophistication also means that the newer wave of Chinese tourists don’t simply want to ride on standard tour buses and consult generic guide books as they once used to.
Chinese travelers are spending on luxury goods and experiences more than ever. Source: HUANG Zheng/Shutterstock
“Visitors from China are creating their own itineraries and are demanding experiences that are more local, native, cultural and art-focused,” Weinswig said.
“These more experienced travelers are increasingly interested in a more thorough and rounded experience, focused on a particular destination, rather than participate in a typical whirlwind bus tour which leaves little time for in-depth exploration.”
This shift towards more meaningful experiences such as immersing in local cultures and visiting parks are also leading to shorter lines outside the likes of Fendi warehouse stores in Italy.
Food and dining are important to the Chinese; while global markets are more used to them opting for Chinese food options when overseas, the newer wave are more interested in “local seafood and delicacies, or fun dining experiences such as having tea and macarons at the renowned LaDurée in Paris”, according to Weinswig.
Hence, retail marketers and brands need to take into consideration the various age and class groups when tailoring strategies to and gaining the trust of different customer groups. On top of that, Weinswig suggested that retailers should consider partnering with leading tourist attractions and restaurants.
More mobile-savvy
Similar to global trends, younger Chinese travelers are turning to travel websites, blogs, and social media including Weibo and WeChat for travel information, and are influenced by those platforms when making travel decisions.
Predictably, they’re also turning turning to mobile apps and payment services to shop, reportedly causing gloom to high-end brick-and-mortar retailers in luxury shopping destinations such as Paris, London, and Hong Kong.
With the rise of China-based payment services such as UnionPay, Alipay, and WeChat Pay, online resources too such as travel websites, blogs and social media are used by 72 percent of surveyed respondents to plan their trips.
Younger Chinese travelers are turning to websites, blogs, and social media for travel information. Source: Shutterstock
Also, a majority of travelers surveyed expect services that enhance their shopping experience, such as Chinese-speaking staff, payment by UnionPay, and on-site tax refund services.
“Online resources allow luxury brands an opportunity to directly connect with Chinese consumers via social media, travel forums and key opinion leaders,” Hartmann said.
“Mobile technology such as WeChat also allows for rich CRM functionality, cross-border payments, and in-store support that can alleviate language barriers and provide real-time information tailored to the needs of Chinese tourists.”
Recently, the world’s largest hotel group, Marriott International, joined forces with Chinese e-commerce giant Alibaba to tap into its Chinese consumer base. The partnership will gift them with deep insights gleaned from Alibaba’s 500 million-strong base who use their many e-commerce platforms and the payments platform, Alipay.
Love for Japan
Illustration: Travel Wire Asia
China’s rise of outbound travel in every part of the world, from the Wild West regions of the US to the Antarctica, is unparalleled. But there’s one destination, arguably closer to home, that continuously steals the hearts of the Chinese – Japan.
A significant 55 percent of respondents surveyed said that they had visited Japan in the last 12 months prior to May 2017, the highest of any other country.
Several factors have led up to this including the geographical convenience of the two countries, an increase in direct airlines routes, and visa relaxations.
Most importantly, Japan is a favored shopping destination for the Chinese. “This may be attributed to their higher affluence, they start looking for high-quality everyday necessities that are difficult to find in China, such as premium rice from Japan,” Weinswig said.
Japanese e-retailers have also quickly adopted Chinese mobile payment services such as WeChat Pay, and are consequently reaping the benefits.
Japan is a favored shopping destination for the Chinese. Source: Shutterstock/gnoparus
Additionally, the geopolitical rift between China and South Korea is also diverting more Chinese to Japan. South Korea, once an immensely popular destination among the Chinese, has recorded a dip in tourist numbers due to a controversial US-backed missile defense system in South Korea.
The strain has caused travel restrictions including in Jeju Island where Chinese numbers have dramatically plummeted.
Al Jazeera reported the drop in arrivals follows retaliatory economic measures taken by China, including banning tour packages to certain areas of South Korea.
Despite the slowdown in South Korea, it’s the third most popular destination for Chinese tourists after Japan and Hong Kong, with 27 percent of respondents having visited the nation in the last 12 months.
That being said, younger Chinese travelers are more curious about “offbeat” destinations after already having visited Europe and the US. The African region and Egypt are just a couple of areas earmarked by travel agents.
Weinswig said, “We more tourists to stray off the well-worn path of the first wave of Chinese tourists and for more adventurous travelers to blaze a new path to new tourist destinations and attractions.”
The post Chinese tourists are becoming more sophisticated shoppers appeared first on Travel Wire Asia.
Source: travelwireasia.com