Hong Kong's Individual Travel Scheme launched in 2003 has resulted in an influx of millions of mainland tourists to Hong Kong, where visitors from Mainland China have now become one of the biggest consumer segments. The growth of mainland tourists in 2010 has grown 26.3 percent compared to 2009 and has contributed to Hong Kong’s economic boom in recent years. In 2010, the number of mainland tourists arriving into Hong Kong reached 22.7 million, accounting for 60 percent of all tourists – triple Hong Kong’s population. Mainland tourists are spending on average HK$ 12,000 per stay (roughly $1,500 U.S.), and these appealing figures are expected to grow, representing future opportunities for marketers.
The Nielsen Company conducted a face-to-face survey in fourth quarter 2010 to understand mainland tourists’ purchase patterns and experience in Hong Kong. In addition, a telephone survey with 1,000 local Hong Kong consumers aged 15–54 was conducted to understand their adaptation to the increasing number of mainland tourists in Hong Kong.
Who Is Visiting Hong Kong?
Mainland tourists to Hong Kong came from all regions across China and represented a fairly homogenous segment, as most were married and skewed to the 25–44 age range. They are usually educated and are earning an above average income. Eighty percent of mainland tourists came to Hong Kong in small groups of four or less, usually with their spouses and children being their core companions.
“Well-known as the Asian shopping paradise, Hong Kong provides an array of luxurious shops and malls, making Hong Kong one of the leading travel destinations in Asia for mainland tourists. As many as 80 percent of mainland tourists came to Hong Kong to shop for themselves, with clothing and electronic products favorite purchases,” said Troy Yang, Vice President, Consumer Research, The Nielsen Company Hong Kong. “Mainland tourists come all the way from their hometowns to Hong Kong to purchase quality products – usually during the National Day Golden Week (65%) and Christmas (35%).”
How Do They Spend?
Nielsen’s survey revealed that over two-thirds (68%) of mainland tourists planned their purchases before coming to Hong Kong, with females (65%) and those aged 34 and under (37%) as the most well-planned in terms of purchases. Not surprisingly, cosmetics and skincare products (61%) are the key planned purchase categories, followed by electronics / photographic products (52%), clothing (45%) and jewelry / watches (38%), indicating high-ticket items are the chief purchase targets for mainland tourists.
Mainland tourists planned to spend HK$12,000 on average during their stay in Hong Kong with more than half of the money allocated on shopping (59%), one quarter on food (23%) and less than a quarter on accommodation (18%). Corresponding to their planned purchases, key actual purchased categories of the mainland tourists included cosmetics (33%), electronics / photographic products (22%), clothing (22%) and jewelry / watches (17%).
“It is interesting to note that almost half of mainland tourists consult online platforms (47%) and recommendations from friends / families (48%) when looking for information about Hong Kong. While word-of-mouth is still the most widely accepted mode, there is an increasing engagement with digital platforms, in particular the reliance on discussion boards, forums and blogs for more first-hand experience from the users,” Yang commented.
Impact of Mainland Tourists on Local Consumers
You can find the footprints of mainland tourists everywhere in Hong Kong, whether they shop in Causeway Bay, Tsimshatsui or Mongkok. Given this huge number of tourists, it is not surprising to find promotions tailor-made for mainland tourists.
More than 80 percent of local consumers in general are either positive or neutral towards the increasing number of mainland tourists shopping in Hong Kong. Hong Kong consumers believe the increased spending of mainland tourists is creating more job opportunities and boosting the tourism / catering industries and thus bringing prosperity to Hong Kong. On the other hand, 18 percent of Hong Kong consumers have negative feelings about the influx of mainland tourists into Hong Kong, stating that places are now too crowded for shopping and they cannot adapt to the cultural differences of the mainland tourists.
Opportunities for Growth
With the high percentage of mainland tourists planning their purchases prior to arrival into Hong Kong and given their high engagement with 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.
In addition, mainland tourists in general are very satisfied with Hong Kong retailers. Retailers can be proud of their achievement and should continue to maintain high servicing standards and offering of quality products. “Given these competitive advantages of the retail market, Hong Kong serves as a very good platform for test market on new product launches, especially on luxury and high-end brands before the products are introduced into the China market,” said Yang, “Brands should also identify the key product categories that mainland tourists look for in Hong Kong as well as the places most frequently shopped. These insights will provide retailers and marketers with the information necessary to further expand their reach to capture opportunities among the mainland tourists.”