On­line re­tail boom hits in­ter­na­tional shop­ping num­bers

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

Shop­ping over­seas is los­ing its ap­peal to Chi­nese tourists as e-com­merce com­pa­nies cash in on in­ter­na­tional brand sales, a con­sumer sur­vey has re­vealed.

Last year, out­bound trav­el­ers spent just one-third of their to­tal bud­get on shop­ping, a drop of 41 per­cent com­pared to the pre­vi­ous year.

Global con­sul­tancy Oliver Wy­man put this down to boom­ing on­line e-com­merce plat­forms in China. They have made mas­sive strides in cross­bor­der in­ter­net shop­ping from Chanel hand­bags straight from France to cher­ries from the United States.

“Cross-bor­der e-com­merce has grown rapidly, over­seas travel has de­moc­ra­tized, and there is greater avail­abil­ity of prod­ucts at home,” said Hunter Wil­liams, a part­ner at Oliver Wy­man and au­thor of the re­port. “This means there is less need for buy­ing over­seas.”

There was a mod­est “trip spend­ing” rise of 3.5 per­cent year-on-year to 20,317 yuan ($2,995) per per­son. Still, this re­flected the shift to more ex­otic lo­ca­tions.

An­other rea­son for the de­cline was the drop in shop­ping for re­sale, or “Daigou”, where in­di­vid­u­als buy items over­seas and sell them in China by charg­ing com­mis­sion.

Spend­ing in this cat­e­gory fell dras­ti­cally to 1,000 yuan per per­son last year from 1,800 yuan in 2015, the re­port showed.

“Chi­nese trav­el­ers con­tinue to shift their spend­ing to­ward more mean­ing­ful ex­pe­ri­ences such as ex­quis­ite din­ing, ex­tra­or­di­nary cul­tural jour­neys and even ad­ven­tur­ous sports,” Wil­liams said.

av­er­age trip spend­ing of Chi­nese out­bound tourists in 2016

“Those who ranked shop­ping as the main rea­son to travel are gen­er­ally from lower in­come brack­ets than those who rank re­tail spend­ing as the sec­ond or third rea­son to go over­seas,” he added.

In the US, re­tail spend­ing dropped from 41 per­cent to 28 per­cent, the sur­vey noted.

Only 5 per­cent of the 2,000 peo­ple polled ranked shop­ping as the num­ber one rea­son to travel over­seas.

This is partly due to on­line su­per­mar­kets and stores which bring the world to China.

By 2021, the com­bined cross-bor­der e-com­merce mar­ket here is pro­jected to hit 1.3 tril­lion yuan, ac­cord­ing to Matthew Crabbe, Asia-Pa­cific re­search direc­tor at global con­sul­tancy Min­tel.

“Trans-bor­der e-com­merce is likely to be more rel­e­vant to brands look­ing at ini­tial mar­ket en­try,” Crabbe said.

“Re­tail­ers and brands should there­fore play to their dif­fer­ent strengths when at­tempt­ing to dif­fer­en­ti­ate from their com­peti­tors,” he added.

Other find­ings re­leased by Oliver Wy­man showed that Chi­nese tourists are stay­ing longer in dis­tant lo­ca­tions and trav­el­ing more with their fam­i­lies, es­pe­cially chil­dren.

“That would in­di­cate a greater pro­por­tion of spend­ing was al­lo­cated to ac­com­mo­da­tion, din­ing and en­ter­tain­ment,” Wil­liams, the re­port’s au­thor, said.

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