The massive potential of the cruise market in Asia Pacific was once again emphasised at the China’s Century Conference in Hainan earlier this month, where it was revealed that 10.4% of the world’s cruise passengers originate from the Asia Pacific region of which 60% are Chinese.

 

However, only 0.2% of China’s 1.4bn population currently take cruises, highlighting the opportunity for increasing penetration in the region.

 

By 2020, China’s Ministry of Transport expects the number of Chinese cruise travellers to reach 4.5m. More and more Chinese tourists are opting to cruise to destinations in Asia, and capacity is growing rapidly to meet the demand.

 

Rajshree Dugar, Associate Director, Corporate Strategy & Business Development Heinemann Asia Pacific Pte Ltd addressed the quirks of the cruise retail business on stage at the China’s Century Conference in Hainan earlier this month, pointing out that shorter cruise trips were needed in this region in order to cater to both millennials and Generation Z customers.

 

HIGH-SPENDERS DUE TO LONG DWELL TIMES

She also surprised audience members when she revealed that cruise retail customers have been known to spend up to $10,000 on a single purchase, such as a watch, which should prompt concessionaires to focus more keenly on the range of fashion, accessories and jewellery products, which are typically more popular on cruises.

 

Higher spend per purchase is driven by the long dwell time in stores which also allows for cross-selling and up-selling opportunities.

 

Dugar pointed out that retailtainment is crucially important on cruise ships, which is why promotions or new launches are often event-driven. Personalisation and customisation are also important, she said.

 

Concurring with Dugar, MSC Cruises Head of Retail, Adrian Pittaway – who immediately followed Dugar’s presentation on stage at the China’s Century Conference – was also keen to point out: “Cruise retail is not travel retail. Cruise retail is experience retail.”

 

MSC, or the Mediterranean Shipping Company, is the fourth-biggest cruise company in the world and boasts the largest in-house retail operations at sea. In 2018 it served 2.2.m guests and expects to be serving 5.5.m a year by 2027.

 

Pittaway confirmed that its MSC Bellisima vessel will set sail in China by 2020 and pointed out that the company’s investment in China was a no-brainer considering retail revenue is expected to be 3-4 times that generated on ships outside of China.

 

As MSC operates its retail in-house, it will also benefit from obtaining 100% customer data capture; a huge advantage when curating a shopping experience for a quick-changing customer demographic.