Lee McCabe, VP, North America for China-based e-commerce platform Alibaba Group, talked about Chinese travel and spending behavior, and how U.S. hoteliers can take advantage of those trends in a talk at the recent Revenue Strategy Summit.
Here are four takeaways from McCabe on why U.S. hoteliers should pay attention to Chinese travelers and how to better understand their shopping habits, which includes shopping for travel:
1. Retail in China is driven by e-commerce, not bricks-and-mortar stores
Because so much shopping is done online, China has developed not only a robust logistics network, McCabe said, but also a strong and secure online payments network as well, which enables fast and secure online transactions—vital when booking travel.
McCabe cited eMarketer data showing that by 2019, Chinese online shoppers will account for nearly a third of global shoppers, and 55% of all global e-commerce sales will originate from China.
2. Mobile is the internet
“For most Chinese consumers, mobile is the internet, and the internet is mobile to them,” McCabe said. There are 700 million internet users in China alone, he said, the majority of who access it through mobile devices. “That’s twice the population of the U.S., online and buying, in China,” McCabe said.
To add to that statistic, he pointed out that the 700 million number represents only half of China’s population. “Industries are changing in China, but certainly not slowing down,” he said. “Only half the country is online, so for e-commerce in China, there’s only one place to go and that’s up.”
He said about 80% of Alibaba’s transactions are done on a mobile device.
3. Cross-border connectivity includes travel
China’s reliance on mobile and digital transactions facilitates its growth as a travel-hungry nation, McCabe said.
“We’re all communicating and connecting cross-border, he said. “Digital has enabled this, and it’s enabling travel too.”
He characterized China’s vast outbound tourist contingent (of about 3 million in 2016) as “visiting in droves and spending more than the average traveler.”
4. Customer service is important before the transaction, not after
When exploring the best ways to reach Chinese travel consumers, McCabe advised taking “everything you think you know about marketing and advertising, and throw it out the door.”
“In the West, about 85% of customer service occurs post-transaction,” he said. “In China, it’s pre-transaction, because they have a lot of questions about every product when it comes to commerce and travel. This is the opportunity China offers.”
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