Analysis | Mainlanders in quest for unique experience from overseas travel, as shopping loses appeal
Travel preferences are shifting as mainland tourism enters a new phase
The rise of the Chinese consumer has been both fast and of immense scale. In recent years, we have observed, sometimes in awe, this powerful group of spenders enter into overseas markets and swallow up huge amounts of merchandise.
All of this activity has driven their spending – relative to global retail sales growth – to grow quickly. Chinese tourist spending hit a significant US$229 billion in 2015, according to global consultancy GfK. Forecast by Fung Business Intelligence Centre to soar to US$422 billion by 2020, the figure was much higher than the US$165 billion registered by China’s State Administration of Foreign Exchange in 2014 and the US$29 billion recorded in 2013.
While such huge numbers should come as little surprise, what we may not realise is that the way Chinese consumers are spending is changing: they are increasingly preferring cultural and historical experiences over shopping.
The way Chinese consumers are spending is changing: they are increasingly preferring cultural and historical experiences over shopping
A study from market research company GFK revealed that long-time favourite shopping destinations like Hong Kong and Macau are losing appeal. As more Chinese come to value the experience of the trip itself, it is the experience of being abroad that has become the ultimate luxury good rather than a new handbag or pair of shoes.
Another study from Oliver Wyman works to dispel the myth that Chinese consumers only go abroad to shop. Sightseeing actually ranked as the prime motivation for many trips, with shopping taking on secondary importance. This will be true for a greater number of people as more Chinese consumers find themselves in excess of material merchandise.
While the share that Chinese tourists spend on actual merchandise varies by destination, Thailand and Indonesia are among the lowest, as visitors tend to go to these places for relaxation and cultural experiences – not shopping. Thus, the motivation for travel to these countries differs greatly from city trips to Hong Kong, Macau, and Tokyo, which Chinese travellers target as destinations for splurging.
At the same time, we cannot ignore the fact that once abroad in well-developed markets, Chinese consumers are often impressed by the competitive prices and wide product selection, not to mention the quality level of service. This excites them and encourages them to make the most of their opportunity overseas to buy as they please.