Swiss research agency m1nd-set has revealed significant changes in travel trends and shopper behaviour among Chinese outbound travellers over the past two or three years in its latest nationality shopper report.
Drawing on traffic data from the agency’s Business 1ntelligence Service (B1S), the report reveals China outbound air traffic has grown by over 9% in the past year, with further growth expected in the coming months.
According to m1nd-set’s B1S, Latin America and Africa are the key growth markets for the next few months with more than 10% projected growth on the same period last year. These, however, are also the smallest markets for Chinese tourists with less than 1% of Chinese travellers visiting these regions.
Europe follows with 7% projected growth and then Asia with 4.1%. Asia remains the key market for China outbound travel, but this trend is set to change with an increasing number of Chinese planning to travel further afield in 2019.
‘SIGNIFICANTLY HIGHER CONVERSION RATE’
The recent civil unrest in Hong Kong will inevitably impact travel to the region from China. Geopolitics has already had a significant impact on the flow of Chinese travellers’ in the past, with destinations such as South Korea seeing a 60% drop in travel from China during the THAAD Missile Crisis for example.
More recently, the Chinese government’s ban on solo travel permits to Taiwan is also expected to have a major impact on Free Independent Travellers planning to visit the country.
M1nd-set says it will be updating B1S subscribers on any significant change in travel trends and forecasts.
The company also indicates Chinese travellers have a significantly higher conversion rate than other nationalities with 51% of travellers shopping in travel retail stores, more than double the global average. In terms of age, the proportion of millennial shoppers among Chinese travellers has increased by 7% over the past 3 years from 51% to 58%.
Additionally, the percentage of middle-aged shoppers has dropped from 47% to 40% over the same period.
While category preferences have not changed significantly over the past three years, the share of wallet and average spend on beauty products have increased significantly. The share of wallet dedicated to the beauty category by Chinese shoppers for example has increased from 42% in 2016 to 60% in 2019.
Chinese shoppers have also become more brand and price sensitive. In 2016, the Emotional Brand Image Shopper segment — using m1nd-set’s customer segmentation modelling — represented 23% of all shoppers. Today, this segment accounts for 28%.
According to m1nd-set, this segment is defined by their desire for well-known brands, exclusive products and offers and special editions. They are high-spenders who also seek international products with a local touch.
The Rational Pre-Planner segment comprises shoppers who purchase to stock up or as a gift. These shoppers are sensitive and do not seek novelties or exclusivity. This segment has seen a more moderate increase from 23% to 26% in the past three years.
M1nd-set owner and CEO Peter Mohn commented: “This fast growing, fast-evolving nationality segment requires constant attention and ongoing analysis of the shopper behaviour to understand today’s reality and tomorrow’s potential. China is a country where only just over 10% of the population have passports. Despite this, it ranks as the world’s leading outbound travel market.”
He added: “The beauty of B1S is that we can combine the Chinese shopper behaviour with traveller origin and destination data. This enables us to analyse shopper behaviour of travellers both for top airport destinations outside China and compare their behaviour segmenting by tier one, two and three city origin airports.
“This gives significantly more tangible and actionable data, particularly when this greater depth is applied to individual markets and analysed by category or customer segment.”