IT’S no secret Chinese travelers drive global luxury travel sales, especially when it comes to international designer goods.
The weakening of the US dollar has helped stabilize the Chinese yuan in international markets, and is increasing the spending power of Chinese luxury consumers.
A new report by Deloitte showed growth in overseas spending by Chinese of all age groups and income status grew in 2016 to levels never seen before, hitting US$261 billion for the first time.
A separate report by Skift said half of Chinese travelers are made up of millennials aged 15 to 29 who are less price-sensitive and more willing to spend on luxury experiences and products compared to the generations that precede them. About 66 percent of Chinese millennials are high-income earners, while most who live in urban areas are willing to spend money to “show off their taste and style”.
On top of that, the expansion of digital technology and e-commerce is driving more Chinese to make purchases while traveling.
Online luxury sales in China is projected to skyrocket in the next five years as more travelers turn to online personal shopper services and make use of product return guarantees.
This study could sway more shopping hubs, airports, and tourist-heavy sites to introduce loyalty programs to lure sales from Chinese travelers.
According to a different study discussed at The New York Times Luxury Travel Conference in Singapore late last year, Asian millennials are also more likely to spend on luxury experiences than material goods.
For instance, they were found to be more likely to spend on experiences that will enrich their travels such as airline tickets and hotel accommodation compared to luxury goods.
The study revealed 78 percent of South Korean millennials are more likely to travel abroad while only 37 percent will fork out for a luxury item. Similar sentiments were apparent among Taiwanese, Hong Kong, and Malaysian millennials.