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Global Chinese travel retail vs. online shopping

Chinese consumer global travel retail online shopping - Retail in Asia

It’s a well-established fact that online shopping is disrupting the global retail sector, both in developed markets as well as in developing markets such as China and India. While online shopping is a rapidly growing aspect of Chinese consumption, unreliable supply chains, and uncompetitive pricing compared to purchasing goods overseas has proven a significant relief for physical retailers in destinations frequented by Chinese travelers. However, Chinese tourists’ retail spending is not immune to the threat of online shopping in more developed markets, especially not as travel patterns are changing.

Some people may find it surprising that malls and department stores across Europe, America, and East Asia spend so much of their marketing dollars on events, promotions, and campaigns that cater to Chinese tourists—which, after all, represent a minority of shoppers in perhaps all destinations except Hong Kong. However, years of strong growth of Chinese shoppers and increased competition from online retailers across products of all price ranges for local customers has made it a customer segment worthy of big bets. The effect of the latter has perhaps been felt the hardest in China, where 65 percent of Chinese shoppers buy goods online at least once a month on their mobile, compared to 22 percent in the United States.

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Despite being highly affluent in online shopping compared to overseas markets, travel shopping remains a largely offline activity for Chinese consumers—and the reasons are many. Often equipped with only Chinese UnionPay cards, cash, and Chinese mobile payment solutions such as AliPay and WeChat Pay/TenPay, ordering products is often impossible. Buying products online and then having them shipped to a hotel can also be an off-putting prospect, which even if it shouldn’t pose any problems, is not common practice. Perhaps the biggest problem for many travelers, however, is the way that many Chinese people travel: short stints in each destination before heading on to the next, leaving little to no time to wait for ordered packaged to arrive. Unsurprisingly, offline shopping remains king for Chinese travelers when overseas, and retailers around the world are benefiting immensely from the rise of global Chinese travel.

Nevertheless, Chinese travel patterns are changing, and repeat visits and a growing emphasis on authentic experiences are making many Chinese travelers opt for independent travel and longer visits to each destination. With more time to seek out the best prices, which remains the most important reason for shopping abroad, Chinese travelers may just find themselves trying to figure out how to use overseas online marketplaces during their travels.

Just like how JD.com and Taobao changed Chinese shopping behavior in China, overseas online retailers—or perhaps the global expansion of their Chinese counterparts—could revolutionize Chinese tourists’ shopping behavior. A little-known fact is that Amazon already accepts UnionPay payments, and more are likely to follow.

Jing Daily logoThis article was written by Daniel Meesak for Jing DailyJing Daily is the leading digital publication on luxury consumer trends in China. Professionals seeking to understand China’s complex and rapidly evolving luxury industry look to Jing Daily for fresh and accurate insights. We publish up-to-the-minute news updates, reports on key trends, insights from leading industry figures, and in-depth analysis on this vitally important market.

(Source: Jing Daily)

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