Transaction Trends

Connecting retail partners with the Chinese traveler abroad

By Souheil Badran

When Chinese tourists make travel plans, many view shopping as one of the top priorities for their trip. While abroad, they can buy items they would otherwise not be able to find in China, often at more affordable prices. In fact, with the Chinese market booming, Chinese tourist-related spending is estimated by economists to be around $200 billion globally. And with more than 3 million Chinese consumers predicted to visit North America in 2017, an increase from 2 million last year, North American retailers have a tremendous opportunity to tap into this group’s massive spending power.

But attracting and enticing Chinese travelers to make purchases can often be easier said than done. Chinese tourists can be an enthusiastic group of shoppers who come to North America ready to exert their spending power on everything from food, to accommodations, to apparel, to luxury goods. However, while these tourists enjoy their travels in North America, they are generally not that comfortable paying here. That’s because they often must navigate not only significant language and cultural differences but also financial ones. With credit cards and cash being the most commonly used forms of payments, Chinese tourists have to both calculate conversion rates and consider foreign transaction fees, which can often hit their bank accounts well after their trips have ended. This can add to their shopping stress and can make them a more hesitant payer at the register.

Savvy payments providers are in a unique position to educate North American retailers on how to benefit from this lucrative market. By helping retailers recognize and address these unique challenges, payments companies can help them present a comfortable payment and shopping experience that will ignite the Chinese tourists’ enthusiasm for finding and buying great items abroad. Ultimately, the retailers benefit the most because of greater spending and a deepening relationship with this lucrative audience.

While there are many factors to consider when targeting Chinese tourists, to be successful retailers must realize that the most important consideration is the experience. Here are a few tips that will help your retail clients tap the spending power of the Chinese consumer traveling abroad.

Understand their spending targets. A lot of Chinese tourists shop with a mission. Some may want to find items for friends or family members on their list. High school students are often looking specifically to buy luxury designer goods at more affordable prices than they’d pay at home. Senior citizens often shop for children and baby-related items, likely for their grandchildren. Retailers need to be ready and equipped for each type of customer and guide them to items that best resonate with their agenda.

Entice shoppers before they arrive. Some retailers or brands might think about marketing to Chinese tourists even before they leave China by partnering with influencers to ensure their stores are on travelers’ “go-to” list before they even get on the plane. That way, a retailer can be added to a Chinese tourist’s agenda and have a greater likelihood of drawing the consumer in-store during his or her visit.

Eliminate payment barriers. Retailers should also look to accept a payment method that is familiar and easily accessible to Chinese consumers. Mobile payment platforms that deliver information in their language, as well as work with their own currency, can make the experience at the register more pleasant for both the shopper and the cashier. Accepting such payment methods can also eliminate surprise fees that often hit shoppers’ accounts after they return to China.

Retailers will also find it beneficial that some Chinese-friendly payment platforms enable Chinese tourists to use the payments app to search for shops nearby and discover deals in their own language. This offers another channel to connect with the Chinese traveler, and drive business and increase sales for a retailer connected to the platform.

Provide seamless services. Chinese tourists have done all their research, found their way to a retailer’s store, and are ready to spend. It is now time for the retailer to meet them at the door with seamless services that will put these special consumers at ease. Consider how every facet of their experience can be made more efficient and simplified. Promotion reminders, product recommendations, fitting room services, gift packaging, and checkout lines offer touch points for building trust, and, importantly, encouraging shopping. The experience of a quick-and-easy purchase is the key to enticing shoppers to another visit, or inspiring word-of-mouth endorsements to their friends and family, resulting in greater opportunity for sales.

Have the “it” product. Many Chinese tourists who come to North America are shopping with a specific “hot” brand or item in mind. Retailers and brands should do their research and review their inventory—
making sure to stock up on items that appeal to Chinese consumers and verifying they have enough of the “it” product available.

Speak the language. Retailers should consider adding signage with Chinese characters to their mainstream stores. They might want to consider bringing in Chinese-speaking staff to help tourists navigate the store, find what they need, and checkout. Retailers that show they understand the challenges of the Chinese tourist and make efforts to bridge the language barrier will help give these visiting consumers the confidence they need to pull out their wallets.

Offer exclusives and deals. Retailers and brands can incentivize Chinese shoppers by offering exclusive treatments or deals. Think of benefits like red envelopes, price discounts, or even a private styling service that is only available to Chinese tourists. This approach can be an added incentive to shop at a specific retailer or brand.

Introduce membership. Many retailers have their own loyalty program to build the long-term relationship with customers, and Chinese customers are very familiar with membership points and discounts. The first purchase can be the beginning of establishing a long-term relationship and future sales, particularly for frequent travelers. Retailers should consider electronic membership cards and coupon options, which are very popular in China because they are portable and convenient to store and use.

Offering a shopping and payment experience that is simple and familiar to Chinese tourists is critical for North American retailers. By bridging the language and payment gaps, and extending services above and beyond what is expected retailers will attract and establish relationships with this large and growing segment. Ultimately, developing long-lasting relationships with the Chinese tourist abroad will benefit North American retailers with increased sales.

Souheil Badran is president of Alipay North America.