Mark Tanner
Mark Tanner
30 September 2015 0 Comments

It is upon us!  Anyone travelling in China over the next seven days, and at many tourist spots abroad, will know that this is no ordinary week.

Unlike the Lunar New Year, when most Chinese travel home to their families, October’s National Day Golden Week is when they get out sightseeing and shopping en masse.  It is the biggest single week of the year for leisure tourism.  Last year, an estimated 480 million travelled between October 1 and 7 and, if the growth rates continue, it will be over half a billion this year.

Beijing first introduced Golden Week holidays in 1999 to expand the domestic tourism market.  And expand it has. During each holiday, state media and social networks are flooded with photos of major sightseeing spots and transport hubs experiencing what has become known as a tourist apocalypse.   

Overrun local tourist attractions and an increasing wanderlust for international destinations has seen more Chinese use the holiday to travel abroad.  The most popular ‘overseas’ destination, Hong Kong, is seeing changing tourism trends which represent the wider market overall.  Although international tourism is growing every October Golden Week, 15% fewer Mainland tour groups are expected to travel to HK this holiday, following falling numbers last year.  It reflects slowing demand for group tourism as more Chinese opt to travel independently, but also an increasing desire to travel to more exotic, farther flung destinations.  Many tours to Japan have long been booked out and there aren’t many seats left on planes to Australia, Europe or the U.S.     

Tourism operators can obviously expect a boon from the tourist week, but a lot of other businesses will as well.  Luxury retailers are likely to see their tills ringing, with as many as 80% of all luxury purchases by Chinese estimated to be made abroad

There are also less obvious beneficiaries of tourism. When Chinese travel abroad, they become more familiar and build affinities with many of that country’s products and services, such as education, fashion and food & beverage.  This is illustrated in research commissioned by Tourism Australia, which found 39% of Chinese overall rate Australian food and cuisine favourably; however, of those who had visited Australia, 76% were fans.  Many more brands could capitalise on the opportunities that increasing outbound tourism brings to sell their wares in Mainland China – it is one example of how different sectors are related and something that China Skinny can help with.  If you are based in China, we hope you have a wonderful Golden Week holiday.  We’ll be back after the break.

Consumers,  Chinese Consumers

What China Slowdown? Nike Scores a Sales Slam Dunk: Nike’s June-August sales jumped 30% year-on-year in Greater China, following a string of strong growth stories for brands that have adapted to Chinese consumer needs including Apple, Starbucks and Mercedes-Benz.

Three Ways Chinese Companies Are Winning with the Customer: Chinese brands aren’t just becoming formidable competitors in the Chinese market, but globally, accounting for 39% of household appliance sales revenue, 15% of Internet software and 10% (or more) of smartphones. They are doing this through: 1) solving consumer problems; 2) rethinking business models; and 3) moving from “good enough” to “cheaper and better.” Nevertheless, many believe than China won’t be able to compete until its research institutions are more open to the world.

6 Facts About How Americans and Chinese See Each Other: Xi Jingping’s first official state visit to the U.S. as the leader of China, has created a flurry of U.S.-China relations coverage, including his meeting with U.S. Tech’s top brass in Seattle. But everything isn’t rosy between the two countries. 39% of Americans have a favourable view of China and 44% of Chinese give a positive rating to America according to Pew Research Center. Young people in both countries have a much more positive view of each other, with 59% of Chinese adults under 30 giving the U.S. a positive rating, compared with 29% of those over 50.

Online: Internet, Mobiles, Social Media & Ecommerce

Ecommerce Drives Retail Sales Growth in China: Emarketer remains bullish on China’s ecommerce growth in 2015. China will account for 40% of the world’s ecommerce sales this year, with mobile accounting for around half of all sales compared to 33% in the UK, 22% in the U.S. and less than a fifth in other developed countries including France, Canada and the Netherlands.

What China Thinks: Why Chinese Consumers Love Online Shopping: 3 minute video from Alibaba who talked to Chinese online shoppers in Tier 1 and 2 cities and villages about why, when and how they shop, including their views on foreign products [not viewable inside China].

Using the 3 C’s for Online and Offline Commerce in China: Brands should no longer view digital as a marketing channel, but see it as a way of life in China. The three most important factors when considering O2O solutions are 1) Connectivity; 2) Context; and 3) Content.

WeChat Offers 8 Solutions for Smart Devices: WeChat has cast the net wider, publishing solutions to integrate the app into air conditioners, toys, routers, home appliances, televisions, recharge equipment, health care and wearable devices.

Overseas Chinese Tourists

Strong Demand For Overseas Trips During Golden Week: Tokyo, Hong Kong and Bangkok are the most searched for destinations on, with Paris being the only non-Asian destination in the top-10. Trips to Rome and Florence are the fastest rises growing 116% and 96% respectively from last year.

Losing its Shine: Chinese Tourists Skipping Hong Kong During ‘Golden Week’ Holiday: Hong Kong is expecting ‘just’ 10 million mainly China visitors this Mid Autumn Festival and Golden Week period – including 15% fewer Mainland tour groups than last year. Chinese travellers are looking to longer haul destinations, taking advantage of easier-to-obtain visas and 11 days off, by taking three days of annual leave.

EU Sees Number of Chinese Tourists Triple in Ten Years: The number of Chinese tourist nights in Europe has grown 282% since 2005, versus 75% of tourists overall.

Premium Food & Beverage

The Strictest “Food Safety Law” in China: Sweeping changes to China’s food and beverage laws will come into force on 1 October. Critical issues include infant formula and milk powder, health food, food for special medical use, online food sales and small food manufacture and processing. Food safety supervision and enforcement will also be tightened up in a bid to improve China’s food safety record.

China Conundrum for Meat Importers: China represents huge opportunities for meat exporters, but it is often necessary to educate Chinese consumers who can be unfamiliar with Western meat cuts and cooking methods. 62% of online food shoppers said food safety is a top priority, and 43% said the sell-by date of food is.

Schooling and Education

Buzzwords: Education in China: The fascinating economy of China’s fiercely competitive education industry, including drones, bootcamp, seaweed and its importance to Chinese as a whole.

Autos and Cars

VW Seen Losing Trust Among Chinese Consumers With U.S. Scandal: Although fewer than 1,000 of the 3 million VWs sold in China are diesel, the car company is likely to lose trust with Chinese consumers after admitting cheating on U.S. air pollution tests. VW has already been singled out in the past by CCTV for faulty parts. 35% of VW’s global sales currently occur in China, and the company is increasing its production capacity there from 3.5 million vehicles last year to 5 million by 2019.

That’s the Skinny for the week! See previous newsletter here. Contact China Skinny for marketing, research and digital advice and implementation.