About 65% of Chinese tourists sampled have used mobile payment while traveling overseas, compared with only 11% of non-Chinese tourists, according to the latest whitepaper jointly issued by Nielsen, a global leading information and measurement company, and Alipay, the world's largest mobile and lifestyle platform.
The whitepaper named “Outbound Chinese Tourism and Consumption Trend: 2017 Survey" found that Chinese tourists use mobile payment overseas far more frequently than their non-Chinese counterparts, and over 90% Chinese tourists would use mobile payment overseas given the option.
Along with the significant growth in per capita income of residents in China, the number of Chinese citizens traveling overseas has also been steadily increasing year by year. According to statistics from the China National Tourism Administration, Chinese tourists traveled overseas on 131 million occasions in 2017, an increase of 7% from the previous year. Statistics from the International Tourism Association shows that the overseas spending by Chinese tourists last year was as high as 261.1 billion U.S. dollars in 2016, increasing 4.5% over the same period (year-on-year) and was ranked first among all tourists worldwide.
To understand what role mobile payment platforms play during overseas travel for Chinese citizens, this whitepaper provided key data analysis into Chinese and non-Chinese tourists’ current behaviors of consumption, in particular the areas and activities of consumption as well as the methods used, with a focus on the rise of mobile payment platforms, and a look at potential future trends. Based on tourists’ consumption patterns while overseas, the whitepaper sought to further understand the marketing power of Chinese mobile payment brands on overseas consumption of Chinese tourists.
“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.
According to the whitepaper, in terms of the average annual spending by different groups of tourists while overseas, Chinese tourists spending has been increasing steadily. In 2017, the average of Chinese tourists’ spending while overseas reached USD 5,565 and is expected to reach USD 5,715 in the coming year, a projected increase of 3% year-on-year.
Nielsen’s study also focused on overseas travel expenditures and found that, in general, the breakdown of non-Chinese tourists’ budget for overseas travel is quite different from that of Chinese tourists. According to the study, the top three categories of Chinese tourists’ spending 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%).
During their most recent trip overseas, Chinese tourists spent an average of USD 762 per person on shopping, far exceeding that of non-Chinese tourists (USD 486). Duty-free shops ranked as the most popular shopping outlet for Chinese tourists with 62%, followed by department stores (47%) and supermarkets (47%).
According to the whitepaper, 52% of non-Chinese tourists regarded price as a key factor in determining their overseas shopping decisions, with total travel budget (43%) and product quality (35%) also appearing to have a high influence. This is quite different from the factors that influence Chinese tourists’ shopping decisions. 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%). And so, we see that for non-Chinese tourists, the absolute price is far more impactful when it comes to purchasing decisions, while the relative price after discount has a greater impact for Chinese tourists. At the same time, the payment methods accepted by local merchants also play a key factor in Chinese tourists’ shopping decisions while overseas.
For Chinese tourists, the question of how to pay for various expenses has always been a key concern during their trips abroad. Cash is often considered inconvenient to handle. On the other hand, mobile payment are regarded as convenient and safe by Chinese consumers. However, another question remains for mobile payment brands: can mobile payment seize this opportunity to expand their market share overseas? The whitepaper shows that Chinese tourists use mobile payment platforms overseas far more than their non-Chinese counterparts. During their most recent trip overseas, 65% of Chinese tourists used mobile payment for local consumption, compared with only 11% of non-Chinese tourists.
In general, both the proportion and the amount of money of Chinese tourists use via mobile payment platforms while abroad continue to increase. During their most recent overseas trip, 2.8 out of 10 payments made by Chinese tourists were via mobile payment. 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.
Understanding which scenarios tourists might use mobile payment is also one of Nielsen’s key research goals for the survey report. The data demonstrated that Chinese tourists primarily use mobile payment for shopping, dining and visits to tourist attractions when traveling overseas. 63% of respondents said that they had used mobile payment while shopping, and 76% of the Chinese tourists hope that they will be able to use mobile payment 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. These are also the three tourist consumption scenarios where Chinese tourists use mobile payments most frequently.
Mobile payment platforms allows outbound Chinese tourists to experience the convenience of fast payment without the inconvenience of cash or loose change, or potential hassle of exchange repayment. According to the survey, Chinese tourists expressed “convenience and speed, and familiarity” (64%) as the primary reason for using mobile payment while abroad. Among other reasons, respondents also chose “feeling proud of Chinese mobile payment brands” (48%), “favorable exchange rate” (43%) and “discounts or promotions” (36%) for choosing mobile payment as the method of payment.
For Chinese tourists, using mobile payment platforms has already become a habit. 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.