Chinese consumers outbound travel rebound, what will change for brands?
China’s National Health Commission announced last week that starting from Jan. 8, inbound travelers would no longer need to quarantine upon arrival to China. The restrictions have also been lifted for outbound travel, ending the “Zero-Covid” policy after 3 years.
Now that China has planned to reopen its borders, Chinese citizens are rushing to plan overseas travels for 2023, according to Trip.com Group.
Upon hearing the good news, overseas businesses who have been grappling with uncertainty for 3 years until started seeing a light of hope for the future.
China is one of the countries that had it the hardest during the Covid time. The government locked down entire cities in pursuit of China’s “zero Covid” policy, which aimed to completely discard the virus.
Thus, we cannot deny the impact this could have on consumer behavior. In this article, we will discuss how Chinese consumer behavior changed post-Covid. What should businesses expect? What is the new normal and preferences for this clientele? What should brands prepare to match the new needs of these consumers? What destinations will Chinese travelers choose for 2023?
Chinese consumers’ reaction to the lift of restrictions:
Most consumers are looking forward to traveling abroad after the ease of the zero-Covid policy.
After the new policy was released, the number of searches for outbound travel on travel platforms skyrocketed. According to Ctrip data, within 30 minutes after the release, searches for popular overseas destinations on the Ctrip platform have increased by 10 times year-on-year.
Data from the same travel platform also shows that after the announcement was released, the number of visa searches increased by 10 times in an instant.
From January 8, 2023, the entry and exit policies will basically return to normal. Experts believe that the peak of China's outbound travel may come in the summer of 2023.
Purchasing power increasing?
It is estimated that in 2023, the per capita consumption expenditure of Chinese residents will increase by an interval of 8% to 12%.
The purchasing power of Chinese consumers is still very strong. The main change that occurred during the pandemic is that they will consume more rationally after the epidemic.
Birth of a more rational consumer than ever:
Consumers' self-awareness is increasingly apparent. They pay more attention to internal needs now. Their choice is more and more based on the product’s quality.
Affected by the epidemic, Chinese consumers have become more pragmatic and cautious. In addition, they pay more attention to the specific functions and utility of products.
The Chinese consumer of today, will compare and conduct in-depth research before buying. 60% of the respondents will compare products on multiple shopping websites or stores before placing an order.
Thus, experts advise companies to give consumers a behind-the-scenes look at how their products are made and broaden online and offline touchpoints to get the word out about their latest launches and stay on top of what’s hot among Chinese consumers.
Top 5 consumption types of Chinese consumers?
According to consumer studies conducted in China, 75% of the respondents confirmed that their lifestyle consumption had changed before and after the epidemic.
In 2021, the top five consumption types of Chinese consumers were
Experiential consumption (69%)
Health (47%)
Luxury goods (42%)
Personal development and learning (39%)
Culture(31%).
In the future, whether it is a short-term or long-term plan, Chinese consumers will greatly increase their investment in further studies, personal development, and cultural life.
The survey also shows that generation Z’s lifestyle consumption is different than that of other generations. For example, Generation Z's preference for perfume, cosmetics, and cars is higher than that of other generations of consumers. On the surface, Generation Z is still in its infancy in the market, but is considered as a "rising star", its future spending power should not be underestimated.
What category of Chinese tourists to expect in Europe in 2023?
While the Chinese government is still putting some restrictions on travel agencies regarding large-group travels, another category of consumers is already preparing for overseas trips without restrictions.
Although the number of Chinese group travels will recover. It is estimated to take some time because of the restrictions in China now. However, European merchants will have the opportunity to welcome another type of tourist: “The financially comfortable Chinese consumer”.
Despite a significant decrease in Chinese tourists’ number during Covid, the average consumption has increased by approximately 50%.
This means Chinese tourists are willing to enjoy high-end trips and spend more during their travel in order to get a more personalized high-quality experience.
Since more Chinese clients have shown a stronger purchase power in the last few years and switched their focus to “Good experience” no matter what the cost is, it’s time for merchants to adapt their service to high net-worth tourists, tourists who speak English, and who have the means to travel alone and do everything independently.
What destinations will Chinese tourists visit in 2023?
Compared with 2021, Europe and the USA have jumped to the first place as the preferred outbound tourism destinations in 2022, surpassing Southeast Asia, Hong Kong, Macao and Taiwan. The proportion of respondents who choose Europe and the United States as their outbound travel destination has increased by 26% compared with 2021.
After announcing the borders’ opening recently, Japan, Thailand, South Korea, the USA, Singapore, Malaysia, Australia and the U.K. were the top 8 destinations outside the mainland with the fastest-growing search volume. Further market studies with travel agencies and platforms need to be conducted to know the real consumer travel plan as well as data about where they actually traveled.
Which payment methods do Chinese tourists use abroad?
In 2018, on one hand, the transaction volume of Chinese outbound tourists using mobile payment surpassed cash payment for the first time, accounting for 32% of the total transaction volume.
On the other hand, 69% of the interviewed Chinese tourists have used mobile payment abroad in the past during their trips to the US, Canada, UK, France, Switzerland, Germany or Italy in 2018.
Alipay, a must-have e-wallet to welcome Chinese tourists:
On the merchant side, market studies have shown that nearly 60% of overseas merchants have seen increases in customer traffic and revenue after accepting Alipay in their stores. 73% of these merchants clearly stated that they would recommend accepting Alipay to other similar businesses.
Following the news of China’s Covid restriction lift, 55% of the merchants that have not yet integrated Alipay or WeChat Pay in their stores are eager to do so as soon as possible.
Accepting Alipay with Silkpay:
If you are looking for a way to improve your store’s payment experience, integrating Alipay or Alipay Plus is a given.
Silkpay provides omnichannel payment solutions that can offer the best payment experience for our merchants and their customers.
Some of the benefits of Silkpay's payment solution
Official partner of Alipay in Europe
Chinese payment methods specialist: Alipay, WeChat Pay and UnionPay
Expert in omnichannel payment and QR code payment
Accepts more than 30+ popular payment methods worldwide
Easy-to-integrate solution
Support by phone, live chat, and email
Our merchants are protected against fraud
A dedicated back office where you can view and manage all your transactions
Want to know more about Alipay? How to integrate it into your business? How can you benefit more from this Alipay? And what does Silkpay offer?
About the author: Silkpay
Based in Paris, Silkpay provides omnichannel and secure payment solutions to help physical stores and e-commerce in Europe accept more than 30 of the world's most popular payment methods: Visa, Mastercard, CB, UnionPay, Alipay+, WeChat Pay as well as Asia-Pacific’s major e-wallets.
Silkpay is a winner of the LVMH Innovation Award. The company was also selected as a finalist for the "Money 20/20" Best Startup and in the "MPE Berlin” Startup Awards. Silkpay also won the "Best Fintech" awards from Capgemini and BPCE.
Silkpay helps merchants deliver the smoothest payment experience to their customers. We are a talented and international team driven by a single goal: to improve the customer experience and make payments simple and secure.