This week in the news, Hainan is booming as China’s wealthy seek a clean-air haven, e-commerce is growing faster in China than anywhere else in the world, China is the most sought after market for Asian retailers, the number of China’s super-rich will rise 80% in the next decade, and Chinese tourists are having trouble spending their full budget when luxury shopping abroad.
Hainan Booming as China’s Wealthy Seek Clean Air
The island of Hainan boasts some of the cleanest air in China, at a time when urban pollution has risen to dangerous levels. It’s also the perfect vacation spot, complete with palm trees, warm weather year-round, and sandy beaches comparable to such destinations as Hawaii and Miami. It will come as no surprise, then, why Sanya and Haikou, cities on the island, are seeing incredible growth. In 2009, the Chinese government revealed its plans to develop the island into a luxurious tourist spot, drawing such international hotel chains as Marriott International Inc. and Starwood Hotels & Resorts Worldwide Inc. Billionaires like Wang Dafu, the chairman of property developer Visun Group, have also opened upscale accommodations on the island.
Why E-Commerce Is Growing Faster in China Than Anywhere Else in the World
Retailers in China are racing to expand in an e-commerce sector that is growing faster than anywhere else in the world, including the United States. What’s driving this speedy development? In the late 1980s, China began its transition to a market economy, giving its state-run retailers little time to acquire marketing skills before the Internet began to dominate consumer consciousness a decade later. “In the U.S., where retailing has long been an established industry for more than 100 years, e-commerce is the icing on the cake. But in China, where retailing as a market is still relatively new, online retailing is the cake,” Export Now CEO Frank Lavin explained.
Fifty-eight percent of Asia Pacific-based retailers are targeting the Chinese market, according to a recent study by property consultant CBRE, making it the ‘most sought after’ market for Asian retailers. With 23.4 trillion-yuan retail market that is expected to continue to expand into 2014, and the government’s plan to double household income by 2020, it’s no surprise that China displays some of the highest consumer sentiment in the world. China also has the attention of global retailers, ranking as the fifth most popular destination for expansion with 22 percent of retailers surveyed targeting the market in 2014.
China’s Super Rich to Rise By 80% in Next Decade
According to a report by Knight Frank LLP, the number of Chinese super-wealthy, those who own more than US$30 million in assets (excluding their main residence), will grow by 80 percent over the next decade. China will have over 14,200 ultra-wealthy individuals by 2024, which will rank China 13th in the world in terms of the number of multi-millionaires. This would place Hong Kong, Shanghai, and Beijing as third, fifth, and sixth, respectively, as the cities with the most ultra-wealthy people. The rise of the super-wealthy in China is also driving up the prices of luxury real estate both in China and abroad. In fact, high-end residences in Beijing increased in price 17 percent in 2013 to reach US$17,100 per square foot after only a 2 percent gain in 2012.
Why Chinese Have Trouble Spending Their Entire Budget When Shopping Abroad
A recent survey of 300 white collar Chinese women conducted by SILK social CRM shows that 20 percent of travelers had trouble spending their entire budget while shopping abroad. The top 5 reasons for shopping list abandonment were: not enough time/energy, lines too long/too crowded, buyer unsure of price difference between location and China, bad service, and inventory out of stock. Customer relationship management starts before the traveler even enters the store, and it is becoming increasingly important to bring it to the front line.