By Marco Passoni
Chinese tourists are taking to the skies once more, but the country and its shoppers are not the global retail powerhouses they once were. Engaging Chinese shoppers in the modern market requires getting the whole retail ceremony right – and they are more willing than ever not to spend.
A look at the headlines shows the potential here. As JingDaily put it recently, the Chinese have a “have yuan, will travel” mentality. This shows there is spend there to be unlocked on a global stage. The Chinese National Immigration Administration reported 7.59 million outbound trips for the National Day, from 1 – 7 October, which is 33.2% more than in 2023. On top of that, the China Aviation Administration marked a 38.2% rise in international passenger flights this year.
But the return of travellers from China is not the same as the return of shoppers and spend – because spend in the China is not the golden egg it once was. In fact, it is quite the opposite. The focus for the new generation of Chinese shoppers has shifted – they seek experience rather than possession, and those willing to travel certainly have experience at the top of their wishlist. I have said before that neither luxury nor travel retail should ever rely on Chinese shoppers as they did once before. Recent luxury results underline this. LVMH’s most recent results showed revenue down 16% in Asia, excluding Japan, in the third quarter of the year. Kering, likewise, is anticipating a 30% revenue drop in the second half of the year, with China a key factor, while Pernod Ricard has cited “weak consumer sentiment” in China for its recent results downturn.
The return of travellers from China is not the same as the return of shoppers and spend…in fact, it is quite the opposite
It is perfectly clear that while the Chinese are returning to travel, they are not shopping like they once did. This is certainly an issue travel retail must contend with. Consumption is no longer the name of the game. Hainan has become a “sinkhole” for brands according to some, with retail figures on the island still not back at 2021 levels.
It is not all bad news, but it is a more difficult situation than we have faced previously – and it requires a dedicated and tailored response. Chinese shoppers today are less willing to part with their money, so their in-store and brand experience must win them over from the start. This requires understanding what they seek and delivering a truly exquisite experience.
The success of Japan is an example of this. The country offers an improved value offer in the luxury sector over mainland China. This has become a talking point online in China and shoppers are choosing to travel to Japan. It highlights the potential for travel retail and luxury if the international market can create an experience and offer which appeals to Chinese shoppers.
So how do we do this? Creating the right, tailored experience requires expert insights and understandings. It requires tailored offers and services, delivered by staff who have been equipped with the knowledge and strategies to engage and delight these customers. At 2.0 & Partners we have recently launched our Chinese Excellence Academy, to meet exactly this need. With a focus on culture, consumer behaviour, and tailored sales techniques, this interactive, on-demand, e-learning course equips your teams with the tools to exceed customer expectations and strengthen your competitiveness in the global market.
There is potential for travel retail and luxury if the international market can create an experience and offer which appeals to Chinese shoppers
The launch of the Chinese Excellence Academy is the latest addition to our suite of training programmes, coupled with our in-person, immersive workshop, Chinese Client Excellence, to create an omnichannel platform of training options to support travel retail team around the world.
China and its shoppers will never be the powerhouse they once were in the retail world, but we can still make them a key part of the future of our market – we just have to make sure we do it in the right way.
