Any numbers used to describe China tend to be staggering. Tourism is no different. You want a crazy statistic on how many watches are purchased overseas? Look at China. It is the same across many categories. Shopping overseas continues to grow. And since only 4% of Chinese have passports, this trend seems set to continue. The outbound Chinese tourist audience is as complex as all of China. The more we understand this audience, the better we can meet their needs, get on their shopping lists and capture revenue. The key is an empathetic, global and cross-cultural perspective.

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China: Outbound Traveler
A 101 on the opportunity
July 2015
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2Quick warm-up fact: Shanghai population is 23 million = London, Madrid and Singapore combined
Image/Video: SkyFall 007 Shanghai fly-over

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Agenda
Context on China
Observations and Stories
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Consumer Intelligence Practice
The CI Practice uses best in class tools and methods to discern behavioral insights that drive design and business
strategy for products, services and experiences

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5The CI Practice offers global capabilities through the Sapient network

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6The Sapient Shanghai office is a key node in our global network

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7Example brands out of the Shanghai office

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Context
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9China is slightly smaller than the US in area

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10China is the second largest economy

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8 Facts
China is a unique culture with a unique mindset

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The number is considered good luck. This is for several reasons, including that it sounds like the word for
prosperity

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In 2003, A telephone number with all digits being
eights was sold for CN¥2.33 million (approximately
US$280,000) to Sichuan Airlines in Chengdu, China
8 is so popular, it plays an important role in the everyday culture and shows up in interesting ways

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148 facts…
Chinese Flag: The red represents the communist revolution; the five stars and their relationship represent the
unity of the Chinese people under the leadership of the Communist Party of China. The larger star symbolizes
the Communist Party of China, and the four smaller stars that surround the big star symbolize the four social
classes (the working class, the peasantry, the urban petite bourgeoisie and the national bourgeoisie). Wikipedia

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1.4 Billionexpected to reach 1.5 billion by 2050
population growth is slowing and aging
male/female ratio out of balance

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3 Yearsused more cement in 3 years than the United
States did in all of the 20th century

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170 citieswith over 1 million people
US has 10
new skyscraper every 5 days

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316% growtheconomy grew 7x as fast as America’s in the last 10 years
America’s combined growth rate was 43%

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91st in GDP
per capita GDP is below Bosnia

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632 million
internet users

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527 million
mobile internet users

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549 millionmonthly WeChat users
*Twitter has 236 million

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23Hangzhou
But let’s talk about travel…

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24Paris
Outside of China…

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170 millionoutbound trips by 2020
about 100 million trips now
only 10 million outbound trips in 2000

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4%of Chinese have passports
that is expected to rise

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29%
of all global luxury good purchased, are by Chinese

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30% taxon many products, especially luxury, purchased in China
a strong disincentive to purchase at home

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2/3 overseas
of all luxury good purchased, are purchased overseas

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40%Chinese spend this amount of their travel budget on shopping
this is 2x as much as American and Japanese tourists

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150 $billionoverseas spending
mostly luxury
expected to grow to $260 billion by 2019

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Where are they going?

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Brands Are Interested

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Observations
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The Chinese outbound traveler

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35Hoefstede’s cultural dimsensions were a guidepost for some of our thinking

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0
25
50
75
100
Power Indv Masculinity Uncertainty Time Indulgence
Chinese Americans

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The outbound Chinese
tourist has the same level
of wealth at the age of
forty as Westerners’ have
at the age of sixty

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Chinese purchase the
“10 Fingers”
Cartier, Tiffany, Chanel, Rolex,
Dior, De Beers, Versace, Prada,
LVMH, D&G.

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Foreign brands tend to be equated
with quality; a strong reputation is
important when considering a luxury
purchase. Recognizable brand names
also signal achievement and respect
to others.

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There are two “Chinas”
New money - new to shopping
and luxury and service
Older money - have higher
expectations around service

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Anti-corruption and anti-extravagance
efforts have curbed conspicuous
consumption of luxury items. This has
contributed to somewhat slowed
growth of the luxury market.

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Chinese luxury preferences are
beginning to shift from
conspicuousness to understated luxury
consumption, with more value on
function (quality, craft) than symbolic
consumption (logos, signaling wealth to
others).

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Luxury shoppers ask
others to shop
Shoppers often ask family or friends who are
traveling to shop for them
Shoppers have contacts in different countries who
will research, purchase and ships items abroad to
collect a commission

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Business travelers shop
for themselves and
others
With lists and little time

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Chinese want in-China
price comparison
transparency
Yet many shops in Europe only provide prices
in Euros and Pounds

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Chinese calculate
savings different
than westerners –
they do not think in
‘percent off’

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Chinese travelers are
looking for high
quality, authentic and
local products, and
increasingly,
experiences

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Chinese desire
western style UX
experiences and value
online experiences
that emphasize trust
and authenticity

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Because of strong
group orientation
cultural values, friends
and family influence the
shopping process and
purchase decision.

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China Outbound Traveler
Context, Observations & Insights
July 2015
For more information contact Rob Murray or Caroline Lu