BW Confidential - Issue #6 - May/June 2011 - (Page 48)

Travel retail Chinese travelers Chinese travelers On the move The Chinese are starting to define the duty-free beauty market, but what makes them tick when it comes to purchasing? by Kevin Rozario S uperlatives about China are everywhere. The biggest population, the largest airport terminal (Beijing T3, at the time of opening), the fastest train (Shanghai Pudong’s maglev)… the list goes on. Growing wealth has also led to an increase in vacationing, which all translates very nicely for travel retail. And for the Chinese, travelling is a perfect opportunity to spend as much as possible on the branded goods they can’t always easily find in their home markets. The nearest duty-free market that the Chinese travel to is Hong Kong, effectively in the same country, but with its own administrative rules and taxes. Here retailers such as DFS Group have sprawling downtown duty-free stores that have benefited from the relentless march of Chinese tourism. In 2010, the number of mainland tourists arriving in Hong Kong reached 22.7 million, accounting for 60% of all tourists—and triple Hong Kong’s population. The growth of mainland tourists in 2010 was 26.3% compared to 2009, and they are a valuable contributor to Hong Kong’s economy and one of the biggest consumer segments in the territory. Prior purchase planning Travelling is now such an important activity for the Chinese that planning how and on what they will spend is widespread, as new data from Nielsen reveal. The group’s survey conducted at the end of 2010 found that mainland tourists planned to spend HK$12,000 (US$1,543) on average during their stay, with more than half of the money allocated to shopping (59%). And when it came to pre-planning their shopping, over two-thirds (68%) did so before arrival, with women and those aged 34 and under planning their purchases the most, usually online. Top of the list of product categories to buy were cosmetics and skincare products (61%), followed by electronics and photographic products (52%), clothing (45%) and jewelery/watches (38%). And in line with their planning, beauty was also top for actual purchases (33%), followed by electronics/photographic items (22%), clothing (22%) and jewellery/watches (17%). Troy Yang, a vice president at The Nielsen Company says: “Almost half of mainland tourists consult online platforms (47%) and look to recommendations from friends/ families (48%) when looking for information. There is an increasing reliance on discussion boards, forums and blogs for May-June 2011 - N°6 - BW Confidential 48

Table of Contents for the Digital Edition of BW Confidential - Issue #6 - May/June 2011

Cover
Comment
Contents
Update
- Brand & retail news recap
- Digital digest
- Companies on the move
Take note
- Market facts, figures & trends
Best of BW
- Highlights from our e-publication
Launches
- The latest in fragrance, skincare & make-up
Interview
- Puig ceo Marc Puig
Insight: Skincare
- Category overview
- Department store initiatives
- Perfumeries
- The latest trends
Wellness
- Discounting in spas
- Spa case studies
Retail
- New store concepts
Travel retail
- Market analysis: Asia & Middle East
- Chinese travelers
Radar
- Four up-and-coming beauty brands
Market watch: China
- Analysis: country overview
- Industry roundtable
- Prestige retailing
- E-commerce
Packaging
- Decoration techniques
Last word
- LPK Beauty vp group creative director Liz Grubow

BW Confidential - Issue #6 - May/June 2011