Shopping has long been a major motivator for overseas travel by the Chinese, and Bicester Village may be the 2nd most visited place in the UK by Chinese tourists after Buckingham Palace. And since the Chinese are easily the highest overseas spenders of all inbound tourists – making up one-third of all global tax-free shopping spend – it’s clear that there are great rewards for destinations and shopping complexes which attract the Chinese and their yuan. Research by Visit Britain ranks ‘shopping’ in the top 3 activities undertaken by Chinese in the UK and tourists are researching their shopping options before they travel, so it’s important for shops, centres and destinations to market their brands in China.
Short-haul destinations have been fine-tuning their retail offering and services for Chinese visitors for some time. South Korea has 13 tax-free shopping malls mainly targeting Chinese tourists while Tokyo’s Akihabara electronics district has long been a popular stop for Chinese visitors keen to stock up on televisions and rice cookers. The Japanese have even developed a new word for Chinese shopping. Bakugai means “explosive shopping” and describes the eager purchasing carried out by Chinese holidaymakers in the Land of the Rising Sun. Tabloid stories of frenzied Chinese shopping abound – with one of the most notorious the (tall?) tale of two Chinese families fighting over the last box of disposable nappies in a Kobe department store.
The Japanese National Tourist Organisation calculates that Chinese visitors in Japan spend 35% more on average than visitors from other countries – and with Chinese visitors numbers to Japan +41% so far in 2016, that adds up to very significant spend in yen. Or yuan.
The rise of Chinese shopping tourism
No less a body than the United Nations World Tourism Organisation has recognised and defined the new concept of “shopping tourism”, describing it as “a growing component of the travel experience, either as a prime motivation or one of the major activities undertaken by tourists at their destinations”. It’s easy to think that the Chinese market was in mind when the UNWTO were deciding on this new category. Recent research by global tax-free shopping company Global Blue found that 81% of all Chinese overseas tourists plan to shop in their destination and their average budget is around ¥16.702 (£1,900).
Designer outlet specialist McArthur Glen is focusing its attention on luring Chinese shoppers into its centres abroad. Its marketing team in China works with trade partners to drive footfall to its overseas outlets, where Chinese shoppers are the single largest international visitor group and make up a third of all international spend. The China team also works closely with the European outlets to carry out cultural training and put other Chinese visitor-friendly measures in place including employing Mandarin-speaking staff and accepting payment methods such as Alipay.
McArthur Glen is clear that WeChat and Weibo are key to connecting with and influencing Chinese consumers before and during their trip. Chinese visits to their European malls increased by +74% in 2015 versus 2014.
In the USA, luxury shopping destinations are also fighting hard for Chinese business, not least because the US Department of Commerce estimates the average shopping spend of Chinese tourists at US$6,000. California’s “global shopping destination” South Coast Plaza has dual language website, advertising and signage, employs Mandarin-speaking concierges and has traditional Chinese red gift envelopes available. In 2012 it became the first US shopping complex to accept China Union Pay and soon after was the site of Union’s Pay single largest transaction ever, a 6 figure sum – an event which prompted a visit (and presumably a thank you) from Union Pay’s CEO.
Why is shopping such an important part of the Chinese holiday experience?
Imported goods in China tend to be perceived as superior to local goods. This tendency began with a lack of quality in early Chinese manufacturing and has been fuelled in recent years by scandals ranging from lead paint in children’s toys to melamine-contaminated baby milk. Imported goods are also subject to high taxes in China so their purchase overseas is cheaper – as well as being status-enhancing. The range of goods on offer outside China is usually wider too, making purchases that bit more tempting.
And it can be hard to be sure that your luxury purchase – indeed, any purchase – in China is genuine. Recently Alibaba has strengthened its efforts to remove counterfeits from its shopping websites Taobao and Tmall, promising to work closely with global brands and even announcing the launch of a new online system to track and remove fakes in early July. These highly publicised efforts are partly designed to counter Alibaba’s reputation as a haven for fake goods, a belief not helped by owner Jack Ma’s comments in June that ‘fake’ luxury goods made in Chinese factories have ‘better quality’ and ‘a better price than the real product’.
While Alibaba’s policies will apply mainly to fakes badged as luxury goods, the unwary may still be caught out by items which appear almost identical to branded luxury products but use a different (sometimes similar) name.
So to avoid fakes and poor quality goods, to choose from a wider range and buy at a keener price … the Chinese are eager to buy goods outside China.
What do the Chinese buy?
Luxury goods are still a favourite overseas purchase of the Chinese. Jewellery, fashion, watches, handbags and cosmetics are all bought in significant volumes. In fact, in 2015, the total overseas spend by Chinese on luxury goods was as high as the domestic spend at US$50 billion – hardly surprising when you realise that many luxury goods are half the price overseas as they are at home. But it’s not just about luxury. Heritage and quintessentially British items are also popular. Traditional British brands are always a draw and (toy) sheep fly off the shelves at Stonehenge – as long as there aren’t any ‘Made in China’ stamps in sight.
Encouraging Chinese shoppers to choose your destination or shopping centre
Global Blue’s research shows that the average overseas Chinese tourist plans and researches their trip almost 3 months in advance, with 43% consulting travel, shopping and fashion websites and 38% using brand channels on social media. And the perception of a country or a destination as good for shopping can be a significant factor in destination choice: 80% of Chinese visitors to Madrid cite shopping as a major motivation.
This makes clear the need to reach out to tourists before their departure from China and ideally before their travel plans are set. To influence Chinese tourists’ choice of destination it’s necessary to establish a presence in Chinese social media and with influencers in China itself. WeChat and Weibo accounts are essential and it’s also worth having a presence on Weibo’s specialised travel portal on which consumers subscribe to receive updates on destinations. Outreach and promotion to Chinese media, celebrities and Key Opinion Leaders are also vital, and it’s important to use specialist Chinese insight to select the right Chinese influencers.
Your website should be in Chinese but it’s not as simple as just translating it – it’s important that the website is localised so that its content and format is appropriate to local cultural sensibilities.
Welcoming Chinese visitors
Adapting your destination or shopping complex to better welcome Chinese will pay off in higher spend and (later) in recommendations, both in person and especially in Chinese social media. Dual-language signage and Mandarin-speaking staff make the Chinese tourist feel welcome, and China Welcome Training can instill an understanding of Chinese culture. Make sure you offer Chinese payment methods such as China Union Pay, Alipay and WeChat Wallet, and offer free Wifi for the use of mobile payment services – and so your Chinese visitors can carry out quick price comparisons to see just how much money they are saving by buying their goods overseas.
According to Trip Advisor, 41% of Chinese tourists will take an extra suitcase on a trip just to accommodate their purchases. If you are keen to ensure your goods are in that suitcase, contact us now to find out how we can help you boost your presence in China.
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