In the new year, Chinese consumers are expected to increase the number of international trips they take as they spend more money on experience and well-being, and continue to invest heavily in real estate and global education, according to China analyst Michael Zakkour.
Zakkour, the principal of the China/Asia Pacific practice at consulting firm Tompkins International, said that 2015 will see even more travel from Chinese, who are already the biggest spenders per capita per trip outside of China. On average, the Chinese traveler spends about $7,000-$8,000 per capita per trip, compared to the $3,000 that US travelers spend.
“Not only is the overall number going to grow, but we also predict that rather than making two trips outbound from China, the average traveler will make four outbound trips per year,” Zakkour said.
Tompkins International had predicted that there will be about 7 to 8 million arrivals in the US for business and pleasure from China, up from about 5.5 million in 2014, prior to the US and China announcing that travel visas will increase from one-year validity to 10 years.
“We predicted all of this a month ago when the big visa announcement came out and like so many things in China, it can change overnight. It’s a little hard to tell what exactly the effect of the new rule will be, but it’s hard to imagine that it won’t be more than about 20 percent than those figures,” he said.
This is in line with predictions that 2015 will see more spending from the Chinese on personal well-being, such as larger investment in vitamin supplements and healthcare products, such as air filters for better protection against China’s heavy pollution, Zakkour said.
“Chinese consumers will be spending a lot more money on experience. It’s no longer just, ‘The bling is the thing.’ Part of this savvy second or third generation of consumer is they’re really seeking out and willing to pay for experiential luxury and experiential consumption,” he said.
In 2014, the luxury sector saw a dip in sales, much of it attributed to President Xi Jinping’s crackdown on corruption and excessive gift-giving. Chinese liquor-baijiu in particular-and luxury goods like watches and cars saw decreased. Zakkour said that he predicts the luxury sector will rebound a little next year, mostly due to growth in the affordable luxury sector.
“There was a natural trend among consumers to seek out affordable luxury. There is a well-saturated market for ultra high-end luxury already, and now you’re starting to see Chinese consumers have a desire for affordable luxury products and in particular, American products. So this is why you see companies like Coach and Michael Kors and Apple doing very well in China,” said Zakkour, speaking to China Daily about his new book on the Chinese “super consumer.”
Zakkour said in his new book China’s Super Consumers: What 1 Billion Customers Want and How to Sell It to Them, that the Chinese super consumer is representative of a phenomenon that has no equal anywhere in the world.
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Article: China Daily USA
- Chinese tourists to drive growth in international traffic @ eTN (2015-01-02)