Many have anticipated the return of Chinese travellers and their spending, sorely missed throughout the pandemic by tourism and retail operators.
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Already, Chinese travellers are making their presence felt in Asia Pacific after the easing of pandemic restrictions – specifically in Japan, their top destination in Asia according to a report by Gusto Luxe and Global Blue, as well as in Hong Kong, South Korea and Singapore.
In Hong Kong, real estate firm CBRE said that by the end of March 2023 the seven-day moving average of inbound tourists had reached approximately 50 percent of pre-pandemic levels from 2017 to 2019, boosting retail sales by 7 percent to HKD36.2 billion (around USD4.5 billion) in January, the highest number since January 2020.
Said Lawrence Wan, senior director and head of advisory and transaction services for retail at CBRE Hong Kong, “The retail market has been picking up due to the significant increase in tourists, particularly from mainland China. Retailers are now considering brick-and-mortar expansion to tap into tourist-driven opportunities.”
Here’s what you need to know about Chinese travellers and some of their newly cultivated habits.
First things first: Who are they?
A survey by Global Blue found 76 percent of Chinese respondents plan to travel overseas in 2023, with Generation Z and millennials being most willing (87 percent), followed by Gen X (66 percent) and Silver (above 55 years old, 64 percent).
And data suggests revenge spending is real: Over Lunar New Year in 2023, Chinese shoppers upped their average spend to EUR1,300 from EUR900 in 2019 – one of the first indications that a revenge spend pattern might emerge later in the year. Having saved at least USD827 billion during Covid, as estimated by JP Morgan & Chase, it is anticipated that these savings will translate into higher spend per shopper in the coming year.
To win them over, create meaningful experiences.
According to another report conducted by Finn Partners and Consumer Search Group (CSG), eight out of ten Chinese travellers prefer to splurge for experiences over tangible products, particularly those from Tier-3 cities (86%). “We already know that there is a strong eagerness and urge to travel after years of border restrictions in China,” says Jenny Lo, managing partner, China, at Finn Partners.
Completing an evolution from tourists to travellers, affluent Chinese are likely to forego attraction-packed tours in favour of well-considered itineraries. Over 70 percent of respondents now desire slow, recuperative travel, with plans to immerse themselves in cities’ local culture (58 percent), take more road trips (56 percent), take better care of themselves (56 percent), and attend more events (51 percent) in their upcoming holidays.
Elevate the store – and post-store – journey.
Luxury goods remain a priority on their shopping lists, and having a plethora of options at their fingertips means Chinese shoppers are spoilt for choice. The delights of luxury shopping are no longer just about the goods, but also the differentiation and experience. Shoppers nowadays expect to be surprised through a memorable, shareable, and one-of-a-kind experience, according to Gusto Luxe.
It’s why capsule collections and creative collaborations – often featuring local celebrities or personalities with whom Chinese shoppers have an affinity – still resonate on the mainland. Personalisation services such as monogramming and colour customisation continue to be sought after among Chinese, and can be a value-add for brands across the spectrum.
Know your shopper and when they are most likely to engage.
In engaging with Chinese consumers, retailers in Asia need to be mindful of key holidays such as Lunar New Year and Golden Week. Gusto Luxe suggests communication must begin at least four to six weeks ahead of these holidays for maximum effect. International retailers can also benefit from cyber holidays such as Valentine’s Day, ‘I Love You’ Day (May), and Single’s Day (November).
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And once they have chosen to engage, whether through brick-and-mortar or online, having a China-ready team will be essential. From utilising Chinese speakers to translating point-of-sale material and offering Chinese payment systems, enhanced service won’t be forgotten by Chinese shoppers already accustomed to preferential treatment and high standards for customer service on the mainland.