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What should the travel industry understand about China in 2019?

02/05/2019| 6:54:57 PM|

Cities are the primary attraction for Chinese outbound travelers. Nearly 92% of total Chinese outbound travel spending is received by major global cities.

Mobile-only

China, like many other developing markets, did not follow the pattern in the West of going from travel agent to PC to laptop to smartphone as its channel to book travel.

Many consumers just went straight to the smartphone and have never engaged directly with a browser. Mobile is ubiquitous in China – a way of life, not only a medium of communication.

And this is before we start talking about the Apps that are available.

The vast majority of online activity in China happens through proprietary applications run by Tencent and Alibaba – and nearly all this is done by phone.

E-commerce centricity

On mobile, consumers talk, text, shop, hail taxis, book travel, trade stocks, pay for utilities, deposit money into their bank or transfer money. 

As a result, China is now entering the next phase of e-commerce: digital shopping is the norm for Chinese consumers.

The e-commerce paradigm has shifted to brands and platforms that offer a complete brand experience rather than a narrow focus on sales and, as a result, many Chinese brands are doing things that are yet to be seen in the West.

These include integrating experiences across all touch-points and channels to create a seamless and immersive experience, often leveraging VR and 3D imaging to build continuous engagement along the entire consumer journey.

Friction-free living

From a pure payment perspective, WeChat and Alibaba’s Alipay are making cash obsolete.

And the thinking about convenience has extended beyond just payment. Alibaba founder Jack Ma coined the phrase “new retail“ to explain the company's vision of blurring boundaries between the online and offline shopping world.

Travel trends

China is becoming the largest source market for international travel and overtook the U.S. as the largest source market in 2014.

The income growth and expansion of China’s middle class makes long-haul travel more achievable. The rapid expansion of airlines such as Hainan Airlines on the international stage makes the Chinese traveler more accessible to new experiences.

Already, Chinese travelers are ranked among the top spenders on a per-trip basis. Their preferences are rapidly shifting towards long-haul travel, higher cost accommodation and upscale shopping.

Cities are the primary attraction for Chinese outbound travelers. Nearly 92% of total Chinese outbound travel spending is received by major global cities.

This has ramifications for hotels and retailers welcoming Chinese tourists: nearly all Chinese travel brands and, indeed, Western travel brands with services to China already enable their customers to transact through WeChat (the user simply scans the brand’s QR code and then follows the brand).

And finally, OTAs are the number one distribution channel in China, with airline direct bookings have a much smaller share.

Ctrip has a market share of 60% of the online travel industry in China and is the world’s second-largest online travel agent after the Booking Holdings.

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TAGS: online travel | mobile-only
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