Retail in Asia


Opinion: How Chinese retail design codes and ‘digital heritage’ are changing travel retail

Altavia Travel Retail managing director Hugo Vanderschaegh discusses the appetite among Chinese millennials and Gen Z for their rediscovered heritage and how this shapes travel retail’s strategies to win over this generation of traveller.

China’s Millennials and Gen Z consumers reconnected with their unique culture and its many traditions during the Covid pandemic. The new trend towards cultural pride among young Chinese travellers is leading the travel retail market to focus on strategies that are grounded in authenticity.

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The Chinese government has made efforts to embrace and encourage the desires of this generation of travellers for domestic travel, offering new opportunities for travel retail with niche, cultural brands.

As part of its new ‘14th Five-Year Plan’, which started in 2021, China will develop several international ‘consumer cities’ – or shopping destinations – as a way to boost an ‘internal economic circle’ (经济内循环).

The learnings below are a result of these changes.

China’s appetite for domestic travel deepens cultural interest

The 14th Five-Year Plan is centred around a deepening interest in and celebration of China’s culture. This initiative extends to the introduction of incentives for Chinese tourists to shop in their home market and includes the development of Duty Free Malls (in downtown tier 2 cities), cultural institutions sponsored marketing plans, and support for sophisticated but niche beauty and lifestyle brands.

Leveraging a new sense of ‘adventurism’ and ‘cultural discovery’, domestic destinations like Sichuan, Yunnan and Hainan have become Mainland travellers’ top Chinese New Year holiday destinations.

According to a recent KPMG survey of Chinese travellers, 32 percent prefer to spend their holiday within their home country, with significantly fewer preferring to go elsewhere in Asia (26 percent).

This trend will be supported by the rise in numbers of the tier 2 trendsetters, who are proud of their roots and wish to celebrate local culture.

However, it is best exemplified by the influence of tier 3 ‘small-town youth’, young travellers who once didn’t travel at all but now do so in large numbers.

This shift in behaviour will undoubtedly increase Gen Z’s deeper cultural appreciation that has gone viral on social media. The consequences are that travel retail is adapting and embracing these new ‘codes’.

Addressing the design codes of the ‘Chinese cultural consumer’ 

Cultural interests have risen to such a level that new industry-leading brands are now trying to decode unique crafts and codes from ancient traditions. Either through revealing a true craft or modernising an ancient way of life, these brands offer an ‘artisanal niche’.

New luxury consumers are welcoming the rise of artisanal niche. Growing cultural confidence, the shift in what ‘Made in China’ means today, and the government’s promotion of the Chinese craftsmanship spirit, are the main drivers behind the revival of local artistry.

The Documents fragrance scent bookstore carries an ancient take on the meaning of trees in Song Dynasty poetry. Source: Documents

Chinese fragrance label Documents created an immersive experience when it opened its scented bookstore in Shanghai earlier this year. Here, it showcased an ancient take on the meaning of trees in Song dynasty poetry. The plan is to roll-out the concept nationwide.

Another example of striving to find an artisanal niche is how CDFG in Hainan encourages visitors to explore the famed and recently revamped Dunhuang cave through an experiential exhibition.

Last year’s most popular initiative (below) was from brand Loewe’s tribute to the craftsmanship involved in creating Chinese porcelain.

Source: Loewe

The label’s new bag collection features glaze colours such as Pale Aubergine, Tea Dust and Pale Celadon as an ode to the power and beauty of a single hue. Shanghai Zhang Yuan and Chengdu’s Taikooli are renowned for their stunning architecture, and have become sources of inspiration for brands and retail alike.

  • Shanghai Zheng Yuan, dating back to 1885, reopened as a new luxury private destination for boutique brands, hosting a private exhibition and pop-up events.
  • Chengdu’s Taikoo Li is China’s new luxury capital. It is where luxury brands regularly showcase bold, imaginative, localised initiatives. Louis Vuitton’s oversized hide-and-seek tigers and Dior’s futuristic pop-up are just two experiences that can be found in the mall.

The next generation of Chinese travellers are also looking for ‘boundless adventurism’. Merging the outdoors with indoor, not only is the outer world becoming more adventurous, but the inner world as well.

Omega recently inaugurated its newest flagship store in Taikoo Li, Chengdu. Source: Omega

More young Chinese are exploring meditation, mindfulness and yoga. Inner wellness and outdoor activities represent a significant part of Gen Z’s income as they embrace the laidback lifestyle and prefer to experience local life in different places.

As a result, destinations like Yunnan and ski resorts in north China have experienced a boom. Discerning labels such as Dior in northeast China offer a pop experience at ski stations, while in Yunnan World of Fendi opened a pop-up exhibition at Mile craft and boutique hotel.

Digital heritage and story-telling though cultural institutions

Alongside the increasing popularity of domestic travel, cultural institutions are offering new ways to address Gen Z cultural desires through digital experiences.

In the past four years, China’s Wenchuang industry (cultural products with IP), has become more prominent within travel retail. Cultural artifacts have found themselves licensed in digital, tech-enabled iterations.

The past year has logged the launch of virtual blind boxes by Henan Museum, an AR trading-card game by Dunhuang Culture & Tourism Group, digital collectibles released by Alipay in partnership with 24 Chinese museums, as well as the Palace Museum’s December exhibition that featured augmented and virtual reality-enabled renderings of ‘digital cultural relics’.

An immersive exhibition in the Dunhuang cave complex in Hainan

In February, coinciding and in collaboration with the 2022 Winter Olympics in Beijing, the Palace Museum released a series of digital collectibles, entitled Ice Skating in the Forbidden City, featuring animations of the ancient work ‘Ice Play’ (冰嬉 图).

This expansion into the digital realm has demonstrated the possibilities of generating new income through bringing cultural relics into a modern world.

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How to appeal to the Gen Z market

The growing relevance of cultural heritage is defining new tangible and intangible experiences.

Tangible: ‘Digital Heritage’ – China’s Gen Z experiences and enjoys new media to revive their heritage. On a design level, niche brands like Documents offer a new perspective to catch their eye.

Intangible: ‘Utopic Adventurism’ – Gen Z dreams of a nomadic life in Yunnan mountains, Sichuan etc; living within their community for a few months, exploring nearby villages. This needs to be a strong consideration for branding and big idea development.

Think design: To win over this generation of customer, travel retail codes could borrow from niche hyper-sophisticated brands such as Documents to offer heritage-based design thinking.

Think domestic: Established brands’ use of a super-localised and niche craft showcased with digital heritage experience would be a potent recipe to engage Chinese travellers.