Retailers keen to tap into the Chinese demand should adopt a strategic approach on marketing to Chinese consumers travelling outside their home market, Euromonitor International (EI) said in a white paper it released on Friday.
According to EI, China has been the country with the highest outbound expenditure in the world, overtaking the US and Germany since 2012. Unlike other leading countries whose tourists concentrate spending more on lodging, Chinese tourists spend the majority of their budget on shopping and normally consider shopping, especially designer outlets, as an essential element of the trip.
The key targets for Chinese consumers are luxury brands of watches, jewellery, bags and apparel due to the huge price differences and wider product collections available in overseas markets. Some domestic beauty and personal care brands from South Korea and Japan such as Sulwhasoo and Clé de Peau Beauté also rank at the top on their shopping list, according to the white paper How to target Chinese shoppers abroad.
EI expects Chinese residents will take 90 million outbound trips in 2020, representing an average growth rate of 13 percent per annum over the past two decades. By 2030, the number is expected to reach almost 126 million, making China the largest outbound market overtaking the US, Germany, and the UK.
The rise of Chinese shoppers is having a positive impact across a diverse range of international retailers and manufacturers as shopping has become the top priority for Chinese tourists abroad.
"Destinations such as France, the US, Japan, Thailand and Australia have targeted the Chinese traveller as a strategic priority specifically for shopping tourism. Europe plays on its heritage and being home to many designer brands in iconic fashion hubs such as Paris and Milan," says the white paper.
"In neighbouring countries like Japan, Chinese visitors purchase a variety of everyday goods and products across the FMCG spectrum – cosmetics, appliances, food and drink, consumer health – that helps offset weak domestic demand and offers a boon for Japanese manufacturers in a range of categories. In Australia, Chinese demand for infant formula due to concerns about domestically manufactured milk formula products has led to a shortage of certain brands in local supermarkets," it adds.
Riding the outbound tourism boom of China, EI suggests retailers to adopt a number of measures to target Chinese visitor.
"Adding Mandarin-speaking staff and approving the use of China UnionPay credit cards are essential. Targeting marketing campaigns around national holidays such as Chinese New Year, developing specific product ranges for the Chinese market and visibility on Chinese online shopping portals are also effective ways of boosting sales."
As Chinese tourists will increasingly expect mobile connectivity while shopping, EI also suggests retailers to offer online payment options such as Alipay, integration with messaging services like WeChat and personalised push notifications customised to their language requirements and preferences.
To download the full report, click here.