Young Chinese people are very different from what marketing and Western politics sell. To be commercially successful in China, you have to know the young people
Inerview to Zak Dychtwald , Author I Young China. (Founder & CEO I Young China Group)
According to statistics from the China National Tourism Administration (CNTA), Chinese tourists traveled overseas on 140 million occasions in 2018, an increase of 13.5% from the previous year. Data from the CNTA shows that overseas travel spending by Chinese tourists reached USD 120 billion in 2017, an increase of 4.5% year-on-year, and ranking first worldwide. According to recent surveys jointly issued by Nielsen and Alipay, 93% of Chinese tourists would consider using mobile payments when traveling overseas (shall more overseas merchants are willing to accept them). Accepting mobile payments would help countries to boost their image as preferred touristic destinations in the Chinese market.
It is also widely known that, for Chinese tourists, “cost” is far less important than the “experience”. Most Chinese tourists expresses that they desired to have unique experiences during their travels (such as visiting historical sites, trying local cuisine, shopping for local products and various other unique options). However, “convenience” remains critical for discerning tourists (this means the readiness of mobile payments and other features that normally suit the consumers’ taste in China).
Chinese tourists spend 25% of total travel expenses on shopping, followed by accommodations and dining. According to Nielsen, other major expenses include local transportation, tourist attractions, recreation and communications. Price is also far less important than discounts and payment methods to influence spending decisions of the Chinese tourists. Non-Chinese tourists, for instance always put price first as the most important factor to influence their spending decisions.
Chinese tourists also choose different places to shop in different countries or regions. In Japan, for example, the popularity of department stores and pharmacies is significantly higher than the average overseas destination. The proportion of Chinese tourists shopping in convenience stores and gift shops in Taiwan is comparatively higher. And in the US or Europe, the proportion of Chinese tourists shopping at luxury stores and discount retail stores is higher than that of other overseas travel destinations (besides the exchange rate, this is because the relative prices of those goods are cheaper in Europe and US). “Skin care / beauty products” and “local specialties” are the must-purchase goods for outbound Chinese tourists.
More than half of all Chinese tourists bought these two types of items. In addition to these products, souvenirs, clothing (especially shoes and hats), special food items, bags and suitcases are also popular items for Chinese tourists. The number of Chinese tourists who visit Europe for educational activities and exchanges (15%), medical care (9%) and sporting events (7%) are all significantly higher than those of other tourist destinations. Chinese tourists’ spending on recreational activities in Europe is also higher than the average (with many tourists watching football matches and other sporting events). It must also be pointed out that less than 1% of Chinese tourists do visit LATAM (while most of them chooses multi-destination packages including unique experiences such as traveling to the Antarctic).
In China there is a well-known phrase used to describe some preferences of Chinese tourists, “YOU SHAN YOU SHUI or there is mountains and water” (有山有水), which means that outbound visitors do prefer natural sceneries rather than relax themselves on the beach. First, sun-bathing is not an option for Chinese female tourists, since beauty standards in China demand to preserve their skin white. Adventures are not preferred neither since Chinese aversion to risks remains high. Therefore, given the special characteristics of this market and its rapid development, Chinese tourists’ preferences can be summarized as follows: natural sceneries and unique experiences, combined with a convenient shopping no matter the cost (although discounts would always be welcome), all these are general demands of Chinese tourists when traveling overseas.
Zak, What is the story of your think tank?
Young China Group offers a people-first approach for understanding China’s millennials. For all of our neverending obsession with “millennials”—what do they want? What are their values? What do they want to buy?—we don’t see the Chinese market with any generational nuance. Most often those of us outside of China only focus on macroeconomics and what we mostly paint as an overbearing government. We don’t focus on people. This young generation in China has a vastly different identity than their parents and grandparents, and we dig into that identity and explore how it will impact the wider world. We think of it as exploring and researching China’s expanding cultural gravity. Plus, this group of 420 million millennials redefine every market they touch, so their emerging identity will have a direct economic impact on all of us.
What kind of regional differences exist in China with regard to wealth, culture and traveling interests?
I think more important than where you’re from is when you’re from. While the rest of the world has “generation gaps” China has what I call “generation gulfs”—the unparalleled rapid pace of change means that the lived experience from generation to generation is extraordinarily different. For instance, the older generation grew up in bitter, bitter poverty. The slogans during the 1970’s were “Catch up with England and surpass America.” But where was England? Where was America? Most had never travelled outside of their home province, let alone the country. China was a nation behind a wall.
On the other hand, the Chinese millennial generation is far more broadly exposed. Two-thirds of all passport holders in China are millennials. One-third of all of the US’s study abroad students—and the numbers are similar in Germany—hail from China. This young generation has grown up watching our tv, our movies, listening to our music, and trying foreign fashions. This young generation wants what their parents couldn’t have, to see and taste the world, to learn about faraway places, and to stand as equals with foreign nations and people.
Apart from differences in exposure to the outside world, the older generation grew up as a subsistence generation, doing their best to survive the famine of the Great Leap Forward (1957-61) and the poverty of the cultural revolution. This younger generation is less concerned with food, shelter, and security. They’re past that. This young generation is the “identity generation,” right now defining what it means to be Chinese in the modern world. That means how they spend, how they travel, but also what they stand for, their values, what they want for their kids, their family, their country. It’s an incredible time, and with it comes a lot of cultural upheaval.
What image does Europa have in China?
Europe is seen as an incredible tourist destination—romantic, languid, and gorgeous. On the other hand, my Chinese friends coming back from trips there often remark how the place feels stuck in the past. “When you order something online, it apparently can take a whole month to get there…” “You have to pay for WiFi and people use whatsapp, sort of a shell of what WeChat is…” “Businesses seem to only be open about 3 hours of the day, and they are all other people’s working hours…” China’s fast-based 996 culture, which refers to the work schedule in startups in big cities—9 am to 9 pm 6 days a week—means Europe conflicts with most people’s ideas of what a life can look like. Some people fall in love with it and become lifestyle warriors themselves. Others are befuddled as to how it can work, and how Europe can remain competitive on the world stage.
Which countries Chinese tourists normally want to go?
The first trips for Chinese tourists are almost always regional—Thailand, South Korea, Japan—but now there is more branching out. Unsurprisingly, Italy is a dream destination. But adventure travel and outdoors travel is picking up speed fast in China. The Aegean Sea, which translates to “the sea of love” in Chinese, is massively popular. And then destinations which are prominently featured in Chinese TV series and dramas always pick up steam as well.
For those in European countries who are already feeling the Chinese traveler’s presence, it has only just begun. Just 9% of the Chinese population has a passport, a number that is expected to double—an increase of 140 million—in the next five years.
Which languages they want to learn?
English still reigns supreme in China, as it is seen as the international language of commerce and is a required part of all Chinese education. German, Spanish, and French are of course popular, but they are all secondary by a wide margin to English.
Were you able to change in your country the idea of China?
My ultimate goal is to make China approachable. The US’s problem is, when we look at China, we see two things: a big “Communist” government, which we see as scary, and a big macroeconomic boom, which is exciting, though a little adversarial. If you just look at these two things, China seems so vast and intimidating that it is hard to imagine collaborating with the Chinese or even competing in China.
I try to refocus our attention on the people. With the work I’m doing with my book and Young China Group, we offer a people-first approach to understanding not just what is happening in China but why it is happening.
You said that now it is the time for Germany to take the place of the US. Can you explain that in detail?
The trade war has the Chinees realizing that they are overdependent on the US, and that we’re relatively fickle. We change our minds fast and aren’t easy to deal with.
Germany is seen as a great business partner—rational, capable, dependable, and intelligent. At a time when it feels like international politics are unpredictable, Germany appears to be the “Adult in the room” and a great alternative to the US.
Why Germany? What do the Chinese think about Germany?
Germany is perceived as practical, rational, capable, and intelligent, plus good futbol players. There is a lot of admiration for Germany within China. What books do they read and movies they watch?
When we think about China we think about labor abuse and violation of human rights, about comunism and Mao. Are we wrong?
I always try to remind people that you can’t judge a people by their government, especially in China where they don’t get to choose. The government’s human rights infractions should not be conflated with the actions of the citizens. Yes, these problems exist, especially in this last yeaer, but don’t forget our news media is incentivized to write about the one bridge that collapses, not the 999 that don’t. It’s no secret that with China we focus primarily on the bad.
And Communism? Isn’t it ironic that the world’s largest “Communist” Party has led the greatest Capitalist revolution in economic history? China isn’t Communist. China is Pragmatist. They do what works economically and what allows the government to keep power. They’ve been extremely effective at both.
Is Chinese a language that American children start learning ? (In Spain it becomes very popular?)
After every speech I give around the world, corporate executives always come up to me afterwards and tell me “So my kid has just started a Mandarin-English school…” Even if that executive had just said negative things about China, they’re still putting their kids through Mandarin courses. Now Mandarin is being taught in public and private schools across the US. Saudi Arabia just made Mandarin mandatory in its public education. You’re seeing it offered globally. The problem is, Mandarin is very hard to learn in a traditional classroom.
Still, exposure to Mandarin will show this younger generation a version of China beyond the headlines, which are almost always negative.
Which idols young chinese women have? And the men? What music do they listen to?
We are at a moment in China where young people want to see people on screen who look like them and speak their language. I think of it as “Cool with Chinese Characteristics.” Before, there was a sense in China that if it was foreign it was better. Now, Chinese pop bands, rappers, writers and artists are all rising rapidly in popularity. Of course, they have to do so in what is shaping up to be a more constricted information ecosystem than two or three years ago, and so things like rap lyrics and tattoos in music videos are under scrutiny from the government.
Dr. Stefanie Claudia Müller