Chinese travelers will increasingly search for local, authentic products to snag during overseas trips as they become more independent and forgo escorted shopping tours, many intending to spend whatever it takes to bring home souvenirs with great stories.
For Chinese travelers who can afford overseas travel, there is still an all-out shopping bonanza that travel brands can plan on growing exponentially over the next five years.
By 2020 outbound Chinese business and leisure travelers will spend upwards of $422 billion per year, and that’s only counting their retail purchases. Tour groups will make up a diminishing proportion of Chinese overseas travel as a greater number of tourists feel confident about independent travel, according to a survey from Fung Business Intelligence Centre (FBIC), a retail and tech data trends company and China Luxury Advisors, a consultancy for luxury retail brands. These independent travelers may bypass household retailers who have so far relied on tour groups funneling shoppers to their stores, the survey predicts.
FBIC and China Luxury Advisors asked more than 1,000 Chinese travelers about their retail spending on foreign trips between May 2014 and May 2015. The survey looked at where respondents spend the most when traveling internationally, what they’re buying and how much monthly income they earn.
Chart 1: Chinese travelers will spend 84% more on retail purchases by 2020 than they will this year.
Chart 2: By Chinese standards, outbound Chinese travelers are wealthy, with the highest percentage of respondents earning between $3,200 and $4,000 per month. Outbound Chinese travelers are also young and outnumber older generations of travelers.
Chart 3: These travelers spend more than the global average Chinese traveler spending for per person, per trip retail spending in places like Europe, the U.S., Japan and South Korea.
Chart 4: Hong Kong, Japan and Thailand are popular destinations for wealthier outbound Chinese travelers.
Chart 5: Some 20% of Chinese travelers spent between $407 to $815 during their most recent overseas trip.
Chart 6: Packaged tour revenues declined for Ctrip between 2013 and 2014 while accommodation, transportation and business travel revenues continue increasing.
Chart 7: Chinese travelers are mainly concerned with making clothing and beauty product purchases during overseas trips, with electronics ranking as the third most important category for retail spending with these travelers.
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Photo credit: Chinese travelers follow a tour guide in Paris, France Jeroen Mul / Flickr