5 Different Online Shopping Behaviors of Chinese Travelers

by

 

In just a few short years, the Chinese e-commerce market has grown to surpass that in the US to become the world’s biggest online retail marketplace. Nowhere was the consuming power of its citizens more fully illustrated than the recent Singles Day (Nov 11) shopfest on Alibaba’s e-commerce websites where $1 billion worth of goods was sold within the first opening 17 minutes and the total sales for the day reached $9.3 billion, an amount which eclipses the combined online sales of Black Friday and Cyber Monday in the US ($2.9 billion in 2013) by a huge margin (see China’s Consumer Power Unleashed – $9 Billion Singles Day Sales).

The emergence of this vast Chinese consumer market makes the understanding of its behavior a strategic imperative for companies and brands catering to the country’s domestic consumers as well as their outbound travelers. Though there are more similarities than differences between Chinese consumers and their Western counterparts, it pays to be aware of their differences in order to better cater to their needs.

Some of these nuances were highlighted by a recent report from Alibaba, China’s undisputed king of e-commerce with up to 80% share of the market. Although outlined within the context of the domestic market, a lot of these nuances are directly applicable to the outbound Chinese travel industry.

Online shopping adoption

Despite the much later introduction of e-commerce into China than in the West, its acceptance by Chinese consumers has been much faster. 75% of Chinese shop online weekly compared with a global average of 21%, according to a recent survey by PricewaterhouseCoopers.

In addition, mobile internet is quickly becoming the most important channel upon which online transactions are conducted. Thanks to the widespread adoption of smart phones, 75% of Chinese consumers said they have used their mobile phone to shop, compared with a global average of 43%, according to the same report. The fact that nearly half of all transactions on Alibaba’s e-commerce platform during the past Singles Day were mobile transactions is further proof of this behavior.

Understanding this behavior is all the more important for travel operators and activity providers, as a lot of activities are typically booked post arrival at the destinations. Having information and a booking mechanism which are easily accessible from a mobile device would go a long way in helping these travelers make their decisions.

Online Marketplaces over Standalone Shopping Websites

Whereas the bulk of e-commerce in the West is done on either websites established by traditional retailers or on pure-play e-commerce portals, about 90% of e-commerce is done in online marketplaces where there are thousands of virtual shops and other service providers such as delivery companies, according to the Alibaba report.

Although there might be an inherent bias in this assessment by virtue of Alibaba being the owner of many of these mega online marketplaces, the conclusion is probably not too far off the mark. In a country where counterfeit goods and consumer fraud are all too common, it would have been counter-intuitive that online shopping is as widely adopted as it has been, had it not been for the fact that the trusted brands of major e-commerce portals and built-in escrow based e-payment services provide the critical confidence boosting elements for consumers to shop there.

The same need for transactional safety is even more important for Chinese travelers contemplating an online purchase in a foreign country. Besides the well known OTAs, portals associated DMOs or formed by a collection of activity and service providers would provide the inspirational content, credibility, confidence and convenience for travelers to search for ideas and make their purchases online.

For well known destinations and established brands, standalone websites with a booking engine would also make economic sense.

Social Approval

Not only do Chinese consumers pay more attention to product recommendations from friends and online reviews, more netizens participate by posting product feedback. Combined with the high propensity for Chinese travelers to post on social media about their travels during and after the trips (see 4 Key Functions the Travel Industry Should Know about WeChat), it would not be difficult to conclude that social media presence is an indispensable pillar of engagement for hoteliers and activity providers alike.

Need More Assurance

In a similar logical vein to the low level of trust by Chinese consumers due to consumer frauds mentioned above, Chinese consumers typically demand relatively more information about the products and their vendors compared to shoppers in Western countries where consumer protection is more mature.

Good information about the service providers, the products and services they offered, logistical details, quality assurances, commonly asked questions and, ideally, customer service over the phone in their language would be a major differentiator which would help overcome the psychological barrier to conversion.

Less Emphasis on Bargain Hunting, More on Choice and Experience

While prices were the most dominant driver to shop online a few years ago, more and more Chinese consumers do so for better choice, quality and merchandise not available at local brick-and-mortar stores.

The same shift in consumer motivations is also reflected in the relative allocations of their spending while they travel overseas. Luxury travels are more common especially among FIT travelers who seek slower-paced, unique and deep experiences over the traditional whirlwind tours and shopping sprees.

 

China’s Consumer Power Unleashed – $9 Billion Singles Day Sales

by

 

AlibabaRight from the get-go, this day was destined to go into the history books as a shock-and-awe display of China’s consumer firepower.

The $1 billion milestone of merchandise sales on Alibaba’s group of retail platforms was reached when the clock at their corporate headquarters in Hangzhou struck 12:17 am – barely 17 minutes after midnight and into the day of Nov 11, China’s Singles Day, a day turned by the same company into a 24-hour shopfest of heavily discounted online sales.

By the end of the day, their digital cash registers rang in a cool $9.3 billion (57.1 billion RMB), handily smashing last year’s record of $5.8 billion.

To help grasp the relative size of that online sales figure, Americans spent $2.9 billion on Black Friday and Cyber Monday, the largest online sales days in the US – combined.

The 11.11 (Nov 11, or more popularly referred to as Double 11 locally) Shopping Festival involved 27,000 merchants and 42,000 brands selling on Alibaba’s group of e-commerce websites including Tmall.com, Tmall Global, Taobao Marketplace and AliExpress. It also involved other components of the ecosystem created around China’s largest e-commerce merchant, including Alibaba’s own e-payment provider Alipay and a consortium of shipping and delivery companies.

Nearly half of all transactions were performed via mobile devices, according to Alibaba.

Source:

Online Shopping Binge Gets Off to a Strong Start

 

Nearly 1 in 3 Chinese tourists to U.S. stops in L.A., shopping spree as highlight

by

Chinese tourist shoppers in L.A.Nearly 1 in 3 Chinese tourists coming to the U.S. make a stop in Los Angeles. Along with the standard sightseeing hotspots such as Beverly Hills, Universal Studios and Hollywood, however, many eagerly anticipate their shopping trips such as those to Rodeo Drive in Beverly Hills and, especially, the outlet malls.

Chinese tourists on average spend US$2,932 per visit to California, compared to $1,883 for other overseas visitors, and have become the highest spending overseas visitors to the U.S.. Beside their higher per capita spend, one significant difference which sets the two tourist groups apart is how they part with their travel dollar – the Chinese typically spend less on food and accommodations – by sometimes staying in less expensive hotels and eating at Chinese buffets – but significantly more, sometimes up to a third of their budget, on shopping.

Mid- to high-end brands such as Coach, Ugg, Polo, Nike, Tommy Hilfiger, Neiman Marcus and L’Occitane are highly sought after. To further stretch their travel budgets, outlet malls are among the most popular shopping destinations. Chinese tourists are often seen as speed shoppers who come already having done research on the brands and styles and know what to look for.

The calculus for the Chinese tourists is relatively straight forward. With a strong RMB, high taxes on imported luxury goods back home and the problems with knock-offs, the savings from stocking up on luxury items alone often pays for the entire trip itself. Suspicion about the quality of vitamins and other health supplements back home is a good reason buying such products in the States is also popular.

Most tourists indicated that most of their purchases are gifts for friends and family.

Source: LA Times

Chinese tourists flock to Europe and U.S. for Christmas

by

Lured by the tropical sun and deep Christmas discounts offered by retail stores, an increasing number of Chinese tourists are choosing to travel abroad for Christmas despite it not being a public holiday period in China.

China International Travel Service Ltd (CITS) said all outbound group trips sold out a month before Christmas Day. It also reported a 20% increase in groups on shopping trips in Europe and the US compared to 2011. Air France also had no tickets left from China to Paris one week before Christmas, thanks to these outbound tourists and foreigners living in China going home for the holiday.

The main reasons for this trend can be attributed to lower airline ticket costs, thanks to a strong RMB (or weaker US Dollar and Euro) and more airlines operating flights between China and Western countries. As for the shoppers, the Christmas discounts are increasingly making a more compelling case to shop in the brands’ home countries compared to China or even traditional shopping hot spots such as Hong Kong and Macau.
According to the British tourism authority, the number of Chinese visitors to the United Kingdom reached a record 150,000 in 2011. The visitors also spent a record 240 million pounds ($390 million).

Another emerging trend sees Chinese tourists increasingly choosing to spend their holidays on the warmer islands this Christmas, a departure from the usual practice of large tourist groups visiting several countries. Islands in Southeast Asia and beyond are also becoming a major destination for Chinese tourists. According to CITS, the number of travelers visiting islands in Southeast Asia increased 50 percent this Christmas from last year. Packages to Maldives, Sabah, Koh Samui and other islands were sold out as soon as they were launched, according to Ctrip.com International Ltd.

Certainly a bright spot for the industry otherwise hard hit by the ongoing economic woes in the West, especially Europe.

 

source: China Daily

Copyright © 2015 Chichaku Corporation. All rights reserved.