Chinese tourists leaving wallets at home
Tourists from mainland China for several years have brought a lift to otherwise stagnant retail sales in markets like Europe, the US and Australia, but signs are increasing that their spending, especially on retail purchases, may have peaked.
A new report from global think tank Coresight Research in partnership with China Luxury Advisors found that Chinese tourists are traveling slightly more frequently than last year, 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 to June 2018, the average traveler 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 per cent fall in total per trip spending across shopping, food and beverages, and sightseeing and entertainment, driven by a recorded 24 per cent decline in average spending on shopping per trip.
Coresight Research founder and CEO Deborah Weinswig said increased e-commerce options and greater price parity for goods in China are likely contributing to the decline in retail spending overseas. At the same time, younger Chinese travelers, like their millennial counterparts in Western markets, are increasingly interested in experiences, rather than goods.
The most common overseas retail purchase was beauty, with 71.5 per cent of survey respondents saying they buy beauty items abroad. This trend is expected to continue, with 56 per cent of respondents who expect to travel overseas again in the coming months saying they plan to increase their spending on luxury beauty. Clothing came in second, with 43 per cent of respondents indicating they expect to spend more on that category.
Duty-free stores were again the most popular format for overseas shopping among these travelers. However, department stores are catching up, with share of spending rising by nearly seven percentage points.
As with last year’s survey, Japan was the top destination for Chinese travelers, 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 percent of respondents visiting the continent this year, up from 16 percent last year. This includes 15 percent who had visited France, Germany, Italy or the UK, up from 13 percent.