Tourists love to shop. Whether they’re browsing for small souvenirs or big-ticket items they can’t get at home, tourists around the globe are always on the prowl when they’re away from home. For mainland Chinese visitors to Hong Kong, shopping is a key activity that nine in 10 tourists enjoy. That ratio alone is impressive, but when you consider that 33.5 million mainland Chinese visited Hong Kong in first the 10 months of 2013—around five times the population of Hong Kong—it’s clear this group represents one of the greatest business opportunities for Hong Kong marketers.
However, a recent report by Nielsen, finds that mainland visitors are coming to Hong Kong less frequently, staying for shorter periods, and spending less on shopping, compared to last year. Nevertheless, accessibility to Hong Kong continues to grow. By the end of 2013, China outbound travelers will likely reach up to 94 million, up 13 percent from 2012, according to the China National Tourism Administration.
The Composition of Mainland Tourists is Evolving
As the number of visitors from mainland China continues to grow, this group has begun to evolve, changing in tourist profile, travel pattern and shopping behavior. According to Nielsen, more than half of the mainland visitors traveling to Hong Kong during 2013 came from the Guangdong province, thanks to its proximity and convenient transportation. At the same time, the proportion of mainlander visitors from smaller tier 2 and 3* cities grew to 54 percent in 2013 from 31 percent in 2012.
According to the Hong Kong Tourism Board, the number of same-day visitors has increased significantly over the past 10 years, rising to 19.8 million in 2012 from 2 million in 2002, outpacing the number of overnight visitors. We expect that the number of same-day visitor will grow even faster by the end of 2013 as well.
Tourism in Macau has also benefited from retail-hungry mainland Chinese consumers. The number of mainland tourists traveling to Macau grew 12 percent in 2013 from 2012. However, Nielsen’s report shows that the number of people visiting Macau after Hong Kong is declining, indicating that more people prefer visiting Macau directly.
How are They Spending?
According to the survey, shopping is down for mainland tourists. The average actual spending among this group recorded a double-digit decrease to HKD24,800 in 2013, and spending on shopping recorded an 8-point slump. In addition, 75 percent of mainland tourists say they shop for themselves, buying in key categories including luxury-branded fashion, jewelry, cosmetics and electronics.
Purchases in these categories, however, differ between Guangdong and non-Guangdong visitors. According to the survey, Guangdong visitors intend to spend more on consumer packaged goods, while non-Guangdong visitors plan to buy more big ticket items such as luxury, consumer electronics (mobiles and tablet PCs), cosmetics, jewelry and watches. Guangdong and non-Guangdong visitors also vary in terms of the types of consumer packaged goods they buy—in particular, infant milk formula products. This is largely influenced by brand familiarity with the type they have in their home.
Earned Advertising Remains Most Credible Among Mainland Tourists
According to the report, more than half of mainlanders travelling to Hong Kong or Macau claimed that they planned their purchases during their visits. For those planned purchasers, word-of-mouth promotions and social networks are the most popular channels that consumers use to gather product information. More than half of the respondents in the survey would refer to recommendations from friends or relatives, while online blogs and social networks (e.g., Weibo or Wechat) are popular with 44 percent of respondents.
“Among those planned purchasers with high engagement on online platforms, there is an opportunity for marketers to create targeted brand awareness programs by advertising on blogs and forums to maximize the reach to their potential consumers.” said Eva Leung, managing director of Nielsen Hong Kong and Macau. “Strategies in using social media to connect and resonate with the mainland tourists have become more and more critical in order to maintain brand awareness today.”
However, mainland visitors are growing more comfortable with Hong Kong’s options and their planned purchases may decline going forward. This will open up new options for marketers. “After the introduction of Individual Visit Scheme (IVS) 10 years ago, mainland visitors are getting more sophisticated and familiar with the Hong Kong environment, allowing them to spend less time planning a trip to Hong Kong,” Leung said. “This means retailers and suppliers in Hong Kong have opportunities to win those potential customers through in-store activation, or to entice them to impulse spend.”
*Tier 2 cities are defined as provincial capitals, while tier 3 cities are defined as cities under the provincial capital level from every province across the country.
Nielsen’s Mainland Tourist Study analyzed the shopping behavior and experience in Hong Kong among different segments of Mainland Chinese visitors, and how each segment has evolved since 2010. Conducted between August and September 2013, the survey is based on online interview of 1,016 mainland visitors from Tier 1 to Tier 3, aged between 18 and 50, who had travelled to Hong Kong or Macau over the past 12 months. The report is aimed at understanding mainland tourists’ purchase patterns and experiences in Hong Kong and Macau.