Chinese tourists are spending less on luxury items and other consumer goods and more on culture and experience-based retail like food and entertainment which has implications for the retail sector in countries like Australia.
According to research from CBRE, 135 million Chinese took an overseas holiday in 2016 and accounted for more than 11 per cent of total international tourist traffic and 20 per cent of expenditure.
CBRE cites research showing shopping no longer ranked at the top of Chinese tourists’ agenda with many respondents indicating they plan to spend more time and money on dining, sightseeing and entertainment.
The reduced spending on shopping for luxury goods is primarily due to improved availability of goods in their own market with the strong presence of many international retailers in China and the availability of such goods online.
Chinese tourists’ spending has also been impacted by geopolitical factors such as protests against parallel trading in Hong Kong and tension between China and Taiwan and South Korea; exchange rate fluctuations; and the fact that Chinese consumers are becoming more savvy and sophisticated, aided by online reviews and social media posts.
How can retailers and landlords respond?
CBRE says that in an already competitive retail environment, retailers and landlords must refine their products and services if they are to stay relevant and attract Chinese tourists.
The shift in Chinese tourists’ spending patterns away from luxury and other consumer goods and towards cultural and experience-based retail is set to exert a strong influence on the Asia Pacific retail market in the coming years.
CBRE research advises retailers and landlords to gain a thorough understanding of Chinese tourist’s changing preferences, requirements and spending patterns, and update their product lines and services accordingly.
