The return of the Chinese traveller in 2023 is significant and welcome — but just how can brands seize the opportunity?
A closed border has accelerated the creation of new retail centres and resorts across the country offering cutting-edge retail innovation and experiences that are world-class.
[Shanghai] 8th January 2023: It’s official. Today, January 8, China reopens its borders — after three years of being (effectively) locked down. This is welcome news to millions of the country’s residents. But it also offers hope to businesses and brands around the world. China is back in business, offering a considerable opportunity for global labels to reconnect with the country’s much-missed consumer.
Research by the Centre for Outbound China Travel forecasts that pent-up demand in China for travel will drive a return to 2019 levels in the next year. The reopening could bring more than $200 billion back to international tourism. The China Outbound Tourism Research Institute estimates that in the first half of the year, 18 million Chinese tourists will travel internationally, followed by 40 million in the second. The appetite for travel spans the globe’s top destinations: from Japan to the UK.
Consumers are hungry for new destinations, experiences and retail splurges
Data from the country’s one-stop online travel shop Ctrip shows that citizens are already making plans. After the opening was announced, the number of airline ticket instant searches rose 438 percent on the previous day. Travel website Expedia reported searches for flights from China to the US had climbed by 40 per cent following Beijing’s decision to remove inbound quarantine rules. Consumers are hungry for new vacations, experiences and retail splurges.
With this in mind, brands need to act fast. Quick action is required in order to be at the front of the queue for reaching potential travellers: from the moment they begin formulating plans. That means being visible in the market now, putting campaigns in place and ultimately, being “China ready.”
Are you “China ready”?
A closed border for nearly 3 years has widened the knowledge gap between China and the rest of the world. In that time China has accelerated its digital transformation and innovation.
Moreover, consumers’ needs and expectations have developed and evolved during this period of unprecedented change. This new wave of outbound travellers live a high-end lifestyle, and there is no longer discrepancy in offerings and brand availability between China and other markets. They are sophisticated, complex and discerning.
A different world, a different consumer, a different China
The opening of the border does not mean the end of domestic luxury spending. A habit of purchasing locally has formed — intensified by the guochao (or national pride) phenomenon — while price equalisation from luxury brands has also helped. This means extra efforts will be needed to attract this repatriated expenditure.
A different world, a different consumer, a different China. The difficulty lies, then, in understanding this post-pandemic traveller: to anticipate their needs, and not only meet, but exceed, their demands.
Three trends for the returning traveller
Demographics, too, have changed. Last year, 87 percent of Gen Z and Y travellers were women, and travelling with family and children has gained in popularity. From this landscape have emerged several new trends.
Perhaps the most obvious of these is the appetite for Wellness. Following three years of uncertainty, it’s not surprising that travellers are seeking to relax, rejuvenate, and just completely “turn off.” But with the rise of luxurious domestic destinations such as Hainan — which saw monumental jumps in visiting figures during the lockdowns — global hospitality has a high bar to clear. China has become used to very high standards.
The rise of luxurious domestic destinations such as Hainan — which saw monumental jumps in visiting figures during the lockdowns — means global hospitality has a high bar to clear.
Another effect of covid in China was — like possibly everywhere the world over — a regard for the Natural world and subsequent uptake in outdoor hobbies. Glamping, camping, hiking, and exploring, the Chinese consumer reconnected with nature. And the same gusto with which locals embraced the woods and mountains at home will map onto their choices of holiday destinations. Niche experiences, packages, and bespoke tours will be vital. As will luxury camping gear and sportswear.
Green endeavours must be foregrounded by beautiful designs, functionalities and experiences
Finally, Sustainability has come to be increasingly important. This is a global theme, but what the concept means and how it applies in practice has played out quite differently in the mainland to elsewhere. Supply chain numbers and transparency are simply not enough. Green endeavours must be foregrounded by beautiful designs, functionalities and experiences too. Brands must authentically develop a CSR programme in China, for China. This is all the more important following Beijing’s “Common Prosperity” policy.
Five things brands must do to capture the opportunity
So much for the consumer. But what do these changes mean for the brand? What does being “China ready” actually look like?
- Social Media is Key — but tread wisely. Cultivate (and maintain) an active digital presence in a unique digital ecosystem. Platforms play a key role in how travellers decide where to go and how to spend. It’s not about quantity, but quality. Pick your platforms carefully, understanding the unique role each plays in brand and community building. Complimenting your social media strategy are influencers — still as powerful (and expensive!) Look at various types of influencers. At the end of the day, everyone’s an influencer in China, so don’t just go for the big names.
- Seamless Integration: Chinese consumers are used to seamless integration in China when it comes to travel and shopping. Again, this replicates the country’s innovative digital ecosystem. When they arrive in Europe or other destinations, can you match expectations by offering smooth, hassle-free experiences and payment transactions?
- Storytelling rules: How compelling is your storytelling? Your brand storytelling, unique DNA, and product offerings are all key. You can no longer rely on the novelty of your products: there is simply no longer any discrepancy in brand availability between China and other markets. Everything is there. New retail centres across the country (such as SKP Chengdu, Shanghai Qian Tan, and the retail spaces across Sanya) offer cutting-edge retail innovation and experiences that are world-class.
- Phygital: The merging of the physical and the digital is the norm in China. Every event, pop-up and experience combines the offline and online. The digital world presents an exciting bridge for visitors to become acquainted with your IRL products through virtual objects and experiences, metahumans, VR (or AR), and the metaverse. But make sure that these complement one another and match in quality. Web3 for the sake of it is a guaranteed turn-off for this digitally savvy cohort, particularly the younger ones. But when used well, multidimensional, tech-powered storytelling is a wonderful tool for conveying your uniqueness.
- Culturally Savvy: Last and most importantly of all: being culturally inclusive is an absolute dealbreaker. The days of consumers paying over the odds for foreign labels are gone. The new China is proud not only of its own brands but its history and heritage. Authenticity, too, is a must. Doing it is one thing. Meaning it — and doing it well — another. Be realistic and ensure you have a crisis playbook in place to be ready when things might not go to plan.
The new China is proud not only of its own brands but its history and heritage
Significant changes have taken place over the last three years in China. Brands that understand these differences and the fact that the country is so far ahead when it comes to digital and retail innovation will be the ones that connect with its consumers the best. Brands can learn from China and apply these learnings to the rest of the world. Understand that these audiences of consumers are passionate and discerning — indulge them with the best you have to offer on the platforms they love. If you want to meet the future, China is the place to do so.
