In a recent street survey of 100 Chinese in Beijing, Moneyweb.com asked how people would spend 50,000 yuan (about US$7700). Forty percent of those surveyed said they would put the money toward buying real estate—a common goal among bachelors looking for a wife. But despite this very practically-minded majority, the second-most popular answer is anything but conservative: thirty percent of those surveyed chose to spend the money on an exotic vacation.
This is good news for many tourism marketers. South Africa, for example, has been working hard to capitalize on this Chinese desire for exotic destinations, airing television commercials in China of happy Chinese tourists admiring the natural wonders of the South African landscape. And South Africa will not be the only nation to realize the increasing spending power of wealthy Chinese.
Bain & Co. estimates that, largely due to increasing Chinese influence in the market, 2011 luxury goods sales will increase 25 percent from 2010 sales. Consulting firm McKinsey and Co. predicts that by 2015, China’s luxury spending will more than double. Chinese consumers are projected to make up at least 20 percent of the world’s luxury goods purchases.
This growing power of consumption has inundated China with Western companies seeking a piece of the emerging market. The tourism market is no different, although it faces unique challenges from other, goods-oriented companies. One of these challenges is the safety of Chinese travelers abroad. Perhaps luckily for tourism, however, Chinese prefer to travel in groups. And while this increases opportunities for companies specializing in organized group trips, it also makes it easier to keep tourists safe in new territory.
Unusually, globalization of brands are not a challenge that marketers need to overcome to lure tourists to foreign shopping trips. Although luxury products are rapidly moving into Chinese territory—nearly every new mainland mall features, Lancome, Dior, and Chanel—Chinese, unexpectedly, are excited to shop at the same luxury stores in other countries. Part of the appeal to the Chinese, perhaps, is the relative scarcity of these brands in other countries as compared to the brands’ ubiquitous presence in China. Chinese spenders seek out products that are exclusive—just being expensive sometimes is not enough.
And in terms of uniqueness, tourism is hitting the mark. Chinese travelers are seeking once-in-a-lifetime experiences—and it doesn’t get more exclusive than that.