Retailers around the globe looking for outbound Chinese tourism to swell their coffers may want to make additional plans, according to a new report.
Signs are increasing that Chinese travelers' spending, especially on retail purchases, may have peaked, says Chinese Outbound Tourists Survey 2018: Urban Millennials Lead the Charge to More Independent, Adventurous Travel, a new report from global think tank Coresight Research in partnership with China Luxury Advisors (CLA).
Respondents to the fourth annual survey of Chinese overseas travellers from Coresight Research and CLA report that they are travelling slightly more frequently than in the past 12 months, but spending significantly less per trip, especially on shopping.
Based on a survey of 895 Chinese Internet users who had spent at least one night outside Mainland China in the 12 months ended in June 2018, the average Chinese traveller went overseas 2.1 times in the past year, up from 2.0 times in the previous year's survey. However, respondents reported an 18% fall in total per trip spending across shopping, food and beverages, and sightseeing and entertainment, driven by a recorded 24% decline in average spending on shopping per trip.
RPA Perspective "We think that enhanced cross-border e-commerce options and greater price parity for goods between China and other countries are likely contributing to this decline in average overseas spending. More frequent overseas travel also dovetails with an erosion of average retail spending per trip, as travellers' budgets and shopping lists both have limits. Moreover, we think a shift toward spending on leisure services and experiences rather than on goods is contributing to the disproportionate decline in overseas retail spending," said Deborah Weinswig, founder and CEO of Coresight Research.
Prestige beauty brands, however, may see some increases, at least in the number of purchases. The proportion of travellers who purchased beauty items abroad rose from 66.2% in the 2017 survey to 71.5% this year. That trend should continue as 56% of survey respondents who said they expected to travel overseas again in coming months planned to increase their spending on luxury beauty. Clothing came in second, with 43% of respondents indicating they expected to spend more on that category.
Duty-free stores were again the most popular format for overseas shopping among these travellers. However, department stores are catching up, with share of spending rising by nearly seven percentage points.
"We think better-informed consumers are likely discovering alternatives to duty-free stores through shopping apps such as Little Red Book and peer-to-peer tools such as WeChat. We also see one-stop shopping destinations such as upmarket department stores and premium malls catering to Chinese shoppers' demand for convenience, as these shoppers may not only be looking to purchase items for themselves when traveling abroad, but also for goods to resell, products bought on behalf of friends and family, and items to give as gifts," Weinswig said.
As with last year’s survey, Japan was the top destination for Chinese travellers, followed by Hong Kong, Thailand, Singapore, Macao and Taiwan. The US is the top destination outside Asia, ranking seventh. Visits to Europe, however, are on the rise, with 21% of respondents visiting the continent this year, up from 16% last year. This includes 15% who had visited France, Germany, Italy or the UK, up from 13%.
