Ninety-six Percent of Mainland Tourists Will Continue to Shop in Future Trips
But Trade Down in Amount Spend
HONG KONG, November 11, 2014 – The frequency of mainland tourists visiting Hong Kong has declined from 2.7 times to 2.2 times in average over the past 12 months, with a trend that shows they are spending less of their time and value on shopping, according to Nielsen. With the declining retail sales value in the first nine months as indicated by HKSAR, a thorough understanding about mainland tourists shopping behavior is crucial more than ever in view of recent challenging and competitive business landscape in Hong Kong.
Nielsen’s Mainland Tourist Study analyzed the shopping behavior and experience of different segments of Mainland Chinese visitors in Hong Kong and Macau and how it has evolved since 2010. Conducted from late August to early September 2014, the survey is based on online interviews of 1,131 mainland visitors from Tier 1 to Tier 3 cities, aged between 18 and 65, who had travelled to Hong Kong or Macau over the past 12 months. The report provides insights about mainland tourists’ purchase patterns and experiences in Hong Kong and Macau.
The Evolution of Mainland Tourists
According to Nielsen’s survey, the average actual spending among mainland tourists has reduced from HK$24,832 in 2013 to HK$21,914 in 2014, representing a 12% decline. There is also a decline in monthly personal or household incomes among those respondents compared to 2013. On the other hand, 95% of mainland tourists, including those from Guangdong region, preferred to stay over in Hong Kong versus day-trip, representing a 6-percentage-point increase compared to 2013.
“Despite the change in spending activity, shopping is still the core activity for most mainland tourists,” said Eva Leung, managing director of Nielsen Hong Kong and Macau. “Our survey found that 96% respondents claimed they will come for shopping on their next trip to Hong Kong, but spend an average of 10-20% less than the past. The decline is most notable among non-Guangdong Tier 1 consumers.”
What They Buy and How They Shop?
Jewelry and watches, cosmetics and personal care products are the Top three items mainland tourists said they purchased more when visiting Hong Kong. Among the four China regions, tourists coming from non-Guangdong Tier 1 cities (such as Beijing and Shanghai) are more mature by age with higher spending intentions for cosmetics (82% claimed a purchase), jewelry and watches (70%) and tobacco (35%).
According to the report, 59% of respondents claimed they are planned travelers when shopping in Hong Kong, a 8-percentage-point increase compared to last year. If consumers cannot find what they want, 39% of mainland tourists will switch to another shop, and 34% will switch to another brand. Retailers need to face the challenge of losing sales as a result of out-of-stock products. For those who plan their purchases in advance, recommendations from friends or relatives (58%) and information from Weibo or WeChat (41%) are heavily relied upon sources.
The Next Stop: Macau
Among mainland tourists who visited Hong Kong, 54% would leverage their Hong Kong trip and detour to Macau, an 8 percentage-point increase compared to 2013. Half of respondents said they travelled to Macau for sightseeing and 20% of them would spend on family resort or entertainment. Only 12% indicated they visited Macau to shop.
“As the needs of mainland tourists evolve, retailers need better end-to-end engagement with Chinese consumers on the path of success,” said Leung. “Chain retailers and brands are seeing more competition from small boutiques as mainland tourists are becoming more sophisticated shoppers. Attractive promotion campaigns at the right place and time, plus value-added services are crucial in capturing the attention of mainland tourists.”
While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration is still growing, audiences may be younger and more affluent than the general population. In addition, survey responses are based on claimed behavior, rather than actual metered data.