Chinese companies are making international news like never before. By May 2016, Chinese outbound mergers and acquisitions tallied $111 billion, already surpassing the full year total of $108 billion for 2015. Yet unprecedented media coverage of Chinese companies’ rapid overseas expansion overlooks the more human face of an increasingly globalized Middle Kingdom – China’s global consumers.
With record numbers of Chinese overseas travelers, students studying abroad, and diaspora communities around the world, Chinese consumers are a major global demographic that no company can ignore.
Overseas Travelers: Shopping is the Vacation
No longer the exclusive pastime of wealthy individuals and tour groups, international travel is now a top purchasing category for Chinese consumers. In 2015, Chinese travelers spent more than $215 billion—up 53% from 2014—according to the International Tourism Organization. For many, shopping is a central component of their vacation plans. “According to our recent consumer survey, Chinese overseas travelers spent more money shopping than on their airfare, lodging, or dining during international travel,” said Maggie Rauch, a senior research analyst at Phocuswright, a travel market research company.
Companies are actively responding to meet growing Chinese demand. In addition to international hotel chains and retail outlets hiring Mandarin-speaking staff, American ride-sharing company Lyft recently entered a partnership with China’s Didi Chuxing where Chinese travelers visiting the US can use their Didi Chuxing Chinese-language app to hail rides from Lyft drivers.
Diaspora Communities: New Locations, Same Preferences
Many Chinese are choosing to do more than just travel abroad – they’re looking to move overseas permanently for work or at least stay for several years of education. While estimates vary, there are more than 600,000 Chinese students studying abroad every year.
Students and immigrants from China often act as international brand and product ambassadors for their friends and family back home. For example, new moms based in China often turn to friends overseas for the latest brands and health trends in the US and Europe because of a trust deficit regarding the quality of information and products available in China.
A subset of overseas Chinese are becoming Key Opinion Leaders(KOLs) online in China, where they reach millions of followers through social media channels on popular platforms WeChat and Weibo. These online influencers sell products and advertise services—a select few are even receiving venture capital funding due to their popularity.
As the same time, traditional social expectations continue to shape the consumer preferences of overseas Chinese. For example, success for today’s Chinese man has been summed up as the ‘four achievements’: “fangzi, qizi, erzi, chezi” translated as “home ownership, a wife, a son, and car ownership.” Chinese real estate purchases in major cities including New York, Vancouver, Los Angeles, and London are soaring.In extreme cases, wealthy Chinese studying abroad have even purchased entire houses out-right in cash to live in during their studies.
A Growing Global Consumer Segment
Foreign companies targeting Chinese consumers are no longer limited to the traditional route to the Middle Kingdom— opening an office or shopfront in a city like Beijing or Shanghai. As growing numbers of Chinese explore new international travel destinations, study abroad, and settle in countries around the world, Chinese consumers are no longer a consumer segment specific to one country, but rather a global demographic with unique needs that savvy marketers can serve.
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