China is on track to top U.S. as the No. 1 travel retail market in 2019
For the first time since Oliver Wyman’s survey in 2016, fewer than half of respondents listed shopping among their top three reasons for traveling abroad, with only 7% placing it at No. 1.
A new survey by management consulting firm Oliver Wyman reveals that instead of making purchases at shops, Chinese tourists are now opting to shell out their money for sightseeing, recreation, entertainment and dining - a trend that could impact retailers ahead of this year’s busy Lunar New Year holiday.
For the first time since the survey’s launch in 2016, fewer than half of respondents listed shopping among their top three reasons for traveling abroad, with only 7% placing it at No. 1. Additionally, the share of a traveler’s budget dedicated to shopping dropped below one-third, or 32%.
“Luxury purchases — including buying for others, either for resale or on someone else’s behalf — once drove world-leading per-pax spend,” the report read. “But this too has faded as a wider range of Chinese travel abroad and as luxury products become less expensive and more available at home.”
The silver lining for retailers? More than half of those shopping budgets are consumed in duty-free and tax-refunded channels. Local brands and products also win; about a third of respondents (a significant gain over the prior year) indicated a preference for shopping at places where they can find products native to the visited country.
The report comes shortly after news that China is on track to top the U.S. as the No. 1 retail market in the world this year. Market research company eMarketer forecasted China’s total retail sales to reach $5.64 trillion in 2019, or a 7.5% increase over 2018. Meanwhile, retail sales in the U.S. are expected to grow 3.3% to $5.53 trillion.
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