China’s Shopping Tourism, Marketing Tips for Retail Travel — Update 2020

The Chinese represent the 1st tourist market in the world.

  • In 2018, approximately 162 million outbound journeys of Chinese citizens were registered.
  • In 2019, Chinese tourists spent about 254.6 billion U.S. dollars while traveling abroad.

By 2021, Fung Global Retail & Technology estimates that 192 million Chinese will travel abroad and their total expenditures will reach $458 billion.

However, only 10% of the Chinese population has a passport and there are already 129 million Chinese tourists abroad. With a middle-class booming, this represents a huge room for improvement. In the coming years, the number of Chinese tourists will increase significantly, consolidating China’s position as the leading emitter market.

Brands want to Target Chinese Oversea Shoppers

A great opportunity for brands that want to reach this clientele with strong purchasing power provided that their marketing strategy is adapted to the specificities of the Chinese market and the expectations of Chinese consumers.

The number of Chinese travelers will always increase, and among them, tourists who want to make their first trip abroad.

To better accommodate these tourists with high purchasing power, international destinations and brands are starting to equip themselves with tools adapted to this market.

In addition to a strong presence on Chinese social networks such as WeChat and Weibo, some companies now offer payment options via Chinese tools (WeChat Pay and Alipay).

Typologies of Chinese tourists

To better understand the purchasing and consumption patterns of Chinese tourists, it is important to define their typology. We can categorize Chinese tourists into four main categories.

  • Large groups
  • Small groups
  • Millennials FITs (Fully Independent Travelers)
  • Very rich FITs

Small and large groups travel with tour operators and guides whereas FITs prefer to travel alone, with family, as a couple or with friends. The evolution of the market, the multiplication of the sources of information, the evolution of the income of the population, and the learning of English make that the category of FIT develops more and more.

The Chinese Tourism Market

 The Chinese represent the 1st tourist market in the world. In 2016, Chinese travelers grew by 7% to 130.5 million tourists in 2017, and the number of Chinese outbound journeys was up to 162 million. They have spent about 254.6 billion U.S. dollars while traveling abroad in 2019.

By 2021, Fung Global Retail & Technology estimates that 192 million Chinese will travel abroad and their total expenditures will reach $458 billion.

The origin of Chinese tourists

In China, cities are classified. It is a global ranking that combines the power, political position, economy, finance, potential, and competitiveness of its market. Hong Kong and Macao are special cities and do not fit in this ranking.

The origin of tourists (1st, 2nd and 3rd rank cities) influences their way of traveling and eating.

First-tier cities: Beijing, Shanghai, Tainjin, Chongqing, Guangzhou and Shenzen.

Second-tier cities: Hangzhou, Jinan, Nanjing, Chongqing, Qingdao, Dalian, Ningbo, Wuhan, Chengdu, Suzhou, Wuxi, Hefei, Kunming etc …

Third-tier cities: Zibo, Quanzhou, Nantong, Xuzhou, Wenzhou, Handan, Baotou.

A recent study has shown that Chinese tourists from second- and third-tier cities who travel as a group most often spend more than those from first-tier cities.

Chinese Oversea Shoppers

This population is part of the upper-middle class and his income level now allows them to make their first major trips abroad.

They are used to travel mainly in groups because:

  • They have few or no travel experience. They need security and help, especially for the organization, the administrative management of the trip, and the language barrier.
  • They enjoy group travel that gives them a certain “cultural comfort”.
  • The prices of a group trip are often more advantageous than those of an individual trip thanks to group rates for reservations (visits, hotels) for example.

Chinese Top Shopping expenses

According to the study “Analysis of the tourism potential of the Chinese middle class”, published by Atout France, the Chinese devote more than 30% of their travel budget to fashion accessories, luxury goods, jewelry, perfumes, wine during a tourist trip.

For example, in Western Europe, 85% of Chinese travelers bought clothes, shoes, and accessories, 50% bought perfumes and cosmetics, 40% bought jewelry and watches, and 7% bought electronic products.

The country where the Chinese spend the most is France. In France, tourists of all nationalities spend on average €1408 against an average basket of €1700 for Chinese tourists, according to the company’s tax rebate Global Blue.

Financial income of Chinese oversea shoppers

Financial income influences the consumption patterns of tourists during their trip. In the first-tier cities that are the richest and most developed cities in China, the average income is €1089 against an average income of less than €900 for other cities at the lower economic development level.

Therefore, travelers of tier 2 and 3 cities are in a perspective of “profitability” of travel, which is why they favor group travel but also purchases abroad.

Chinese Oversea Shoppers are Luxury Brands Lover

Take the example of luxury goods. By buying these products in the countries of origin, they will be able to benefit from more attractive prices than in their country (where they are often more expensive) but also from a tax refund. In addition, the purchase of luxury goods abroad guarantees the authenticity of the product. Indeed, they are from the perspective of making a maximum of purchases.

First-tier cities

In general, Chinese travelers from first-tier cities are much more experienced in traveling abroad and their travel options are more frequent. They are less sensitive to the luxury goods offered in the country visited because they know that they are also available all over the world and the price difference is less important to them.

Millennials

This “millennial” generation is more in search of exceptional experiences, superior accommodation comfort, local gastronomy, sporting outings, and more original discoveries … not just shopping.

Travelers from tier 2 and 3 cities spend more on shopping.

Thus, the average expenses of tourists traveling in a group are higher than those of tourists who travel independently.

According to the result of the study “Chinese Outbound Tourists: More diverse, More sophisticated”, travelers from lower-tier cities spend an average of €2052, or 10% more than those of first-tier cities, who spend on average €1952.

What Chinese millennials want in tourism?

While the older generations still rely on tour operators, mainly for language barrier issues, Chinese millennials (414 million people, or 31% of the population) are free, self-employed new technologies to plan their trips, book, seek recommendations and pay. They usually come from first-tier cities. They are well-off, ultra-connected, and are the favorite target brands and brands.

They are looking for qualitative and innovative journeys and ever more extraordinary experiences. The recent study “Where Next” by JingTravel and Carat gives us insights into these categories of tourists who travel more and more independently.

These digitized travelers can be divided into three groups:

Adventurous influencers: These individuals enjoy a very strong influence on Chinese society. They want to be different from the rest of the population while inspiring them. They are very interested in culture. They like to share their experiences on social networks often followed by many followers who are inspired by their experiences. They are called the KOL (Key Opinion Leader). They represent great opportunities for brands.

Fashion Followers: This second group has significant financial resources, they like to be fashionable, follow trends, and show themselves in popular places by following the advice of the previous category. They place particular importance on destinations offering great comfort.

Culturally Curious: These categories are the largest, they consider travel as a way to enrich themselves at the cultural level. They are curious and ambitious and in search of destinations where they can discover a maximum of things (landscapes, meetings). They are looking for authenticity. These are travelers who tend to focus more on the speed and convenience of hotel services.

This new generation has a high purchasing power and is hyper-connected

Social networks are a very important part of their lives because they allow them to stay up-to-date on the latest trends and learn about what other members of their communities are doing and influencers influencing who they want to look like. Social networks are their window to the world.

The Magic Power of Social Media

In tourism, social networks can both enable them to learn about the popular destinations, but also share their travels or exchange with other Internet users as proposed by social networks specializing in travel: Mafengwo and Qyer or even little red book.

Thus, 87% of them say they have had a unique and innovative experience thanks to digital innovation and 75% to be positively influenced in the decision to purchase services based on artificial intelligence.

One Nation Paris on Little Red Book

The weight of social networks

In China, the weight of social networks cannot be neglected if you want to lead an effective marketing campaign to reach Chinese consumers. To attract Chinese tourists, it is necessary to build partnerships with Chinese platforms or KOL (Key Opinion Leader).

Social networks are the ideal place to offer loyalty programs and recommendations to this highly connected Chinese generation.

WeChat: First channel of information and means of communication preferred by the Chinese. 94% of Chinese users who have WeChat use it every day. They go there on average 10 times a day. They can send messages and call their contact. But also pay directly with the app, in stores, or online. Sending documents to WeChat is now more convenient than using your mailbox.

Effeil Para (Parisian Parapharmacy) targets Chinese travellers and Daigou

WeChat is also:

The ability to create personal and professional groups to bring together a community. Users can also follow accounts to receive real-time news. That’s why many companies are creating a WeChat account that will be their gateway to the Chinese market.

Chinese Travel KOL

Key Opinion Leaders (KOL) and users have decided to publish their own content. And users love it. They follow many amateur accounts to get the latest news. WeChat is also the ability to listen to music, play games, translate messages directly, and many other features …

Travel Forums are powerful in China

Mafengwo: Travel application with more than 120 million users in 2018, sharing travel stories with photos and videos. Other users can enjoy, comment, share, and save their favorite posts. The site is also a forum where you can exchange around travel. The most popular bloggers are featured on the homepage of the site and companies can take advantage of their brand name by partnering with them for partnerships that will ensure a good reputation in this market.

Its qualified and highly committed audience makes it an ideal platform for tourism agencies wishing to attract a Chinese clientele.

Mafengwo landing page

QyerQyer is an application originally designed to advise Chinese students to exchange abroad. Today the application accounts for 88 million users who publish content on their trips abroad. What is interesting for companies is that the application has many other derived applications dedicated to travel planning, such as Itinerary Assistant, which works with Booking.com.

To get to Chinese Oversea Shopper you need Baidu

One Nation Paris Outlet

In order to get awareness baidu is probably the most cost efficient long lasting solution out there. It pairs very well with social media and forums.

Create a webpage and work you way up to the very top of Baidu when travellers are looking for shopping destination just like One Nation Paris did with out help.

Users Experiences

Partnerships with KOLs: Partnering with Chinese bloggers is a great way to make people talk in China. By choosing the right influencers you can directly target a specialized and highly receptive audience to the advice of those bloggers they admire and trust.

Chinese Mobile Payment

The ability to support payment services such as UnionPay or Alipay is also critical.

A report by Nielsen and Alipay, titled “Trends in Chinese Mobile Payment in Outbound Travel in 2018,” revealed that the average budget for Chinese tourists traveling abroad rose to more than $ 6,026 per person in 2018. In addition, some 69% of tourists used mobile payments when shopping abroad, up 4% from the previous year.

Such sums offer merchants and tourist attractions a huge opportunity to exploit this increased spending. 2,806 Chinese tourists who participated in the survey, 93% said they would probably increase their spending if mobile payment was accepted more widely.

For their part, industry experts believe that understanding the habits and preferences of Chinese tourists is crucial for European traders if they want to take advantage of the opportunity they represent. 

GMA a Marketing agency Specialized in Chinese Tourist

Alibaba joins forces with Dufry to share the Chinese duty-free market

The Chinese e-commerce giant and the Swiss duty-free retail juggernaut will set up a joint venture in China to shake up China’s huge, fast-growing duty-free airport shopping market.

Dufry landing page

From the perspective of the Chinese duty-free market, CDFG (China Duty-Free Group) is still the Chinese duty-free leader in the market. It has won the bids for Hong Kong Airport, Capital Airport, Guangzhou Baiyun Airport, Macau Airport, Shanghai Airport Duty-Free, and other Chinese duty-free shops. The company owns more than 80% of the total Chinese duty-free market.

Due to the impact of the epidemic, this year’s outbound travel plans for Chinese people have been ruined. Domestic travel and shopping have become a new choice. For this reason, duty-free shopping in Hainan has become one of the most popular destinations in 2020 in China.

In the first half of 2020, CDFG’s revenues reached 19.309 billion yuan and realized a net profit of 931 million yuan. From the performance of CDFG in the first half of the year, it has already surpassed Dufry to rank first as the global duty-free retailer. Partnership with Alibaba could help Dufry increase its presence in the fast-growing Chinese travel retail market.

How to apply for the establishment of duty-free shops in China?

Any independent legal person can apply for the establishment of duty-free shops. Businesses should have the sale place and supervised warehouse for Duty-free goods that meet the supervision requirements of the Customs. To operate a duty-free shop, you must first obtain the qualification, that is, the relevant license. It is difficult to apply for the qualification of a duty-free shop and has to be submitted to multiple departments for approval.

A certain business scale is a must, and in the case of applying for the port duty-free shop, the annual entry and exit person-time of the port should be more than 50,000. All activities of the duty-free shops must conform to the supervision requirements of the Customs.

For the application, the business operator should submit a written application (no specified format available currently) and materials to prove the compliance with the relevant qualifications to the General Administration of Customs; After gaining the approval from the Customs, the business operator applies to the customs for acceptance and completion of relevant recordation formalities.

Need a retail travel Agency?

Entering the Chinese market through social networks remains the most effective way to promote it (Weibo, WeChat, Mafengwo, Qyer).

Gentlemen Marketing Agency is a Shanghai-based digital marketing agency that helps foreign brands gain a foothold in China by providing marketing strategies tailored to your needs and targets.

Our team is up-to-date on all the latest marketing trends in China and uses all the most effective digital tools to promote your business in China.

For more information consult our previous articles on the subject:

Retail Travel in China: A marketing Case study

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