The rapid growth of China’s lucrative outbound tourism market is nothing new to the travel industry. According to the data from United Nations World Tourism Organization (UNWTO), Chinese outbound travellers spent US$258 billion in 2017, ranking the number one contributor globally with 21% of the world market. Looking beyond the numbers, for anyone who wants to do business with this vast and rapidly growing group of consumers, it is important to look at who these travellers are, and what drives them.
The online advice for international marketers on how to effectively target this group is limitless. Often referred to collectively as ‘The Chinese traveller’, this generalisation for the largest group of consumers who are reshaping the retail world has not been due to naivety. The data just hasn’t been available -- until now.
Three Distinct Chinese Travellers
At iClick, through our marketing intelligence platform iAudience, we have tracked and profiled 750+ million internet users in China looking at their dynamics, profiles, key behaviours and shopping trends. What has emerged are three distinct groups, which every retailer in any location frequented by Chinese traveller should consider as part of their marketing strategy:
- The Dark Horse: The New Affluent from fast-growing 2nd Tier cities
- The Walking Wallet: The Luxury Overseas Shopper
- The Awakened Generation: The Post-90s Explorers
The Dark Horse
Dark Horses are mature, financially well-off males, with an above average disposable income. With the growth rate of outbound travellers from second tier cities surpassing the traditional first tier cities of Beijing, Shanghai, Shenzhen and Guangzhou, The Dark Horse’s appearance is no surprise. In order of growth rate, these second-tier cities include: Xi’an, Changsha, Wuxi, Taiyuan, Wuhan, Hefei, Chengdu, Nanjing, Harbin and Kunming.
The older demographic of this group prefers packaged tours, while the younger generation will opt for a more hands-on approach. Although this group is relatively well-off they will still seek cost savings when they travel, conducting in-depth research, so they can make the best-value-for money shopping decisions.
The Walking Wallet
We know Chinese consumers love luxury goods, but under-appreciated is the fact that two-thirds of their spending happens overseas. A study by McKinsey reveals that by 2025 Chinese consumers are expected to account for 44% of the total global market for luxury goods, highlighting how the importance of this group for businesses is only going to strengthen.
The Walking Wallet represents the cliché of ‘wealthy Chinese,’ comprising of upper middle-class females with a high spending power who have diverse interests across various luxury brands and product categories. They are avid adopters of customized luxury tours and prefer long-haul shopping destinations in Europe, as well as more exotic getaways such as the Middle East, Africa, Cambodia or Bhutan. The Walking Wallet will seek quality and authenticity of their purchases and celebrity endorsements are important in terms of influencing their decision making.
The Awakened Generation
The Awakened Generation is truly unique in character. They were born in China during the 90s, in an era of strong economic growth and burgeoning affluence and at a time when the country ‘opened-up’ to foreign influence.
The self-expressive “Me” culture is one of the most important traits of this group, who seek to distinguish themselves from The Dark Horse and The Walking Wallet segments.
When travelling, the Awakened Generation opts for relaxation and experiencing local culture rather than shopping and, when they do purchase, brands are not top-of-mind as they prefer new discoveries, which they share over social media. How to appeal to this group? Businesses will need to craft unique items or an unforgettable shopping experience.
Influencing and building awareness
Although the segments we have identified are so incredibly diverse they could almost be from different countries, there are two golden opportunities for marketers.
To build strong top-of-mind awareness, they should engage with potential Chinese travellers when they are still at home in China planning their trip as this would build reach with The Dark Horse and the Awakened Generation segments.
Secondly, brands also have a window to influence a shopper’s final purchase decision in-store.
For example, a shopping experience that is tailor-made and hassle-free for The Walking Wallets, while The Awakened Generation would prefer a unique experience which they can share with their friends on WeChat.
Implications for marketers
The trends likely to affect this market include a continued spike in numbers of Chinese travellers abroad, but to more diverse destinations, as well as a shift towards spending on more expensive products and a move from “landmark based” travel to “experiential travel.”
We also predict that business travellers will represent a growing proportion of this segment due to The Belt and Road Initiative (BRI), which is generating economic opportunities throughout the region.
Thanks to the advent of big data and our partnerships with Tencent, Baidu, Ctrip and over 2.4 million other Chinese websites and 105,000 mobile apps, the iClick team can provide a level of insight to Chinese travellers that is more in-depth than ever before.
The key for marketers is not to adopt an overly generalised strategy, but rather to understand the diversity of Chinese travellers, their unique preferences and desires.
For more details, please download a copy of iClick’s “The Chinese Outbound Travel Shopper” White Paper at www.i-click.com/download/chinatravelshopperwhitepaper/