A recent whitepaper published by Nielsen underlines why it is so important for non-Chinese firms to accommodate Chinese tourists’ spending habits, specifically when it comes to their use of mobile wallets. It shows what forward-thinking companies of all sizes need to do in order to capture tourism money spent by the increasing number of Chinese tourists.
Given the opportunity, more than 90% of overseas Chinese tourists would prefer to use mobile wallets, compared to only 11% of non-Chinese tourists. Sixty-five percent of Chinese tourists have already used mobile wallets to make payments overseas. This was revealed in the report Outbound Chinese Tourism and Consumption Trend: 2017 Trend white-paper report released by the marketing survey firm Nielsen on February 28, 2018.
According to statistics released by the China National Tourism Administration, Chinese tourists traveled overseas on 131 million occasions in 2017, an increase of 7% from 2016. Statistics from the International Tourism Association show that Chinese tourists spent 261.1 billion U.S. dollars overseas in 2016, increasing 4.5% over the same period (year-on-year) and was ranked first among all tourists worldwide.
“China has embraced mobile payments faster than any country, and will continue to lead the global charge in this regard. Mobile payment is on the rise globally, and will continue to support greater connectivity and efficiency across the commercial ecosystem,” said Vishal Bali, Managing Director of Nielsen China.
Chinese Tourists Spend More than Non-Chinese Tourists
In 2017, average spending by Chinese tourists was US$5,565 and this is expected to climb to US$5,715 in 2018. The top three spending categories for Chinese tourists while overseas are shopping (25%), accommodations (19%) and dining (16%). For Non-Chinese tourists, however, the top three categories are accommodations (29%), dining (18%), shopping (15%). Chinese tourists were most concerned about the discounts offered (41%) and payment methods accepted (41%), followed by the price of the good or service (40%).
The survey also found that the younger generations used mobile payment more frequently: for the post-90s generation, 3.3 out of 10 payments were via mobile and 3.7 via card; but for the post-70s generation, 2.3 were via mobile and 4.9 via card. In other words, if service providers want to capture tourism spend from younger Chinese, they need to provide mobile wallets, and this trend is likely to continue.
The data in the Nielsen report demonstrated that Chinese tourists primarily use mobile payment for shopping, dining and visits to tourist attractions when traveling overseas. Sixty-three percent of respondents said that they had used mobile payments while shopping, and 76% of the Chinese tourists hope that they will be able to use mobile payments when traveling abroad in the future. In addition, 62% of Chinese tourists paid for meals with mobile phones, while 59% of Chinese tourists used mobile payment for expenses related to visits to tourist attractions.
This means that it is especially important for shopping businesses which cater to Chinese tourists to offer mobile wallet services so that they can increase their spend. The two main providers of wallet services are Alipay and Wechat.
By reducing payment friction, mobile wallets have boosted spending by Chinese overseas. According to the whitepaper, 83% of Chinese tourists would ask whether or not the local merchants support mobile payment while abroad; only 17% of Chinese tourists would not ask. Some Chinese respondents even expressed that when paying overseas, they will subconsciously take out the cell phone, and open the mobile payment page. While many Chinese respondents will ask if mobile payment is supported locally, 40% believe that only part of or a small number of overseas merchants support the use of mobile payment.
According to the white paper, 93% of the Chinese tourists expressed that if more overseas merchants support the use of Chinese mobile payment brands in the future, they would consider using mobile payment more frequently. In addition, 91% expressed that if overseas merchants supported the use Chinese mobile payment brands, it would further increase their desire to shop.
You can read the Nielsen report 2017 Survey: Outbound Chinese Tourism and Consumption Trends here.