SHANGHAI — They still travel in droves, but no longer buy in spades.
After propping up sales for overseas retailers for the past decade with a shopping-driven tourism agenda, Chinese visitors are not returning home with bulging suitcases as they used to do.
A new survey by consultancy Oliver Wyman shows that Chinese tourist numbers and holiday expenditure continued to rise last year, even as shopping during overseas travel fell 17 per cent from the previous year.
The average Chinese tourist spent about 6,705 yuan (S$1,365) on shopping when travelling, down from 8,050 yuan in 2015. But overall spending — including on hotels and sightseeing — rose 3.5 per cent to 20,317 yuan from 19,635 yuan, according to the survey of 2,000 travellers from the mainland.
The change in spending habits is dealing a blow to retailers from Parisian department stores to Japanese duty-free operators and Hong Kong jewellers. However, bigger numbers of wealthier Chinese may create other opportunities for leisure and entertainment operators in popular overseas destinations.
“Businesses globally have to adjust their strategy to think about how to capture the new Chinese tourist dollar,” said Oliver Wyman’s Shanghai-based partner, Mr Hunter Williams. “It’s less about the outlet mall now and more about the national park.”
Domestically, the growing middle class’s desire for recreation has propelled revenue for the country’s media and entertainment industry to grow more than 70 per cent in the last five years to US$204 billion (S$282 billion).
One reason for the change is the easier access to foreign goods in mainland China due to a booming US$60 billion cross-border e-commerce market.
Imported items can now be ordered online and delivered as quickly as within a day and are often exempt from taxes levied on store goods.
That has dampened the practice of buying overseas to resell locally, and the survey showed such resales falling to 3 per cent of shopping expenditures from 8 per cent in 2015.
Chinese consumers no longer need to travel overseas to stock up on items from Playtex Products bras to Christian Dior lipsticks and Blue Nile diamond rings, which are available on websites run by companies like Alibaba and JD.com.
With foreign brands increasingly using the Internet to reach Chinese buyers, foot traffic to malls and outlet stores in popular overseas destinations is slumping.
Japanese duty-free retailer Laox Co reported a 33 per cent fall in revenue for last year as Chinese tourists spent less, while American retailer Macy’s is shutting 14 per cent of its stores to stem sales declines.
The survey also showed that more Chinese tourists are travelling with children and spouses rather than going alone or with friends. That could benefit destinations that offer unique leisure experiences or entertainment options, according to Mr Williams.
“The number of Chinese tourists is still rising rapidly and at quicker pace than their overall spending,” he said. “This should give industry players some pause to think about how to make up for the loss of shopping-related spending through volume.” BLOOMBERG