Hong Kong-Dec 2, 2016- Hong Kong businesses still have a big chance to win if they find the right way to attract mainland travelers, though the fast growing cross-border e-commerce offer them easier and cheaper access, a latest Nielsen study shows.
According to the 2016 Mainland Tourists Syndicated Report conducted by Nielsen, a global leading measurement company, 42.8 million mainland visitors travel to Hong Kong every year, counting for 75 percent of its total tourists and generating 35 percent of the retail sales there..
The physical visits from mainlanders are, and will be weighing a huge impact on Hong Kong`s businesses for a long time. Therefore, Hong Kong businesses need to take a close eye on their changing behaviors and preferences, according to the Nielsen study.
“Those overnight visitors who are short in number but stronger in buying power compared with the day-trippers is a key group to watch,” said Angel Young, managing director of the Nielsen Hong Kong.
For the past 12 months, 17 million mainland tourists spent nights in Hong Kong, and 80 percent of them is paying averagely 2 regular visits every year, spending HK$20,000 （$2578.18） individually on not only popular items like clothes, jewelries and electronic products etc, 40% percent of them have intention to buy insurance and financial products, according to the report.
Entity business owners in Hong Kong might need to adapt to the transform in advertising and feedback mechanism to create better customer experience for digital savvy mainland travelers. They should focus more on the pre-travel period as more and more mainlanders are planning independent tours to HK, getting 95 percent of the necessary information from online travel agencies, and 49 percent from the social media. Many can’t wait to post pictures on social websites when they are still shopping, to share both positive and negative comments and discount information.
They also have to improve in-store customer service, as the research showed that 80 percent of the mainlanders’ purchases in Hong Kong are for self-use, instead of for friends.
“The old days when mainland travelers based on a shopping list, the ‘grab and go’ type of shopping style is long gone. This calls for the need to explain your product or service features to them in greater details,” said Young.
To boost sales more efficiently, business owners always have to look at the customer structure and narrow their focus. In this case, the Nielsen`s report has recommended two specific targets: The “Super Mainlanders” and the “Culture Seekers”.
Super Mainlanders have a huge shopping thirst for Hong Kong businesses to grab. They make up only 23 percent of all the mainland tourists but can support 54 percent of the total mainlander sales by spending 46,902 yuan ($6810.22) each during one visit, tripling what the rest 77 percent normally do. Surprisingly, the Super Mainlanders are spending much more when making pretty much the same as others, with a family income of 18,760 yuan per month.
Culture Seekers travel to Hong Kong for concerts, local food, sightseeing and exploring the places they saw on famous HK TV shows. Although not shopping-oriented, they even spend 10 percent more than other mainland tourists.
However, cross-border e-commerce is an undeniable trend. When making global buying available for ordinary consumers, Chinese e-commerce giant Alibaba Group re-labeled this year`s Singles Day as the “Global Shopping Festival”. Within that 24 hours, Alibaba`s online sales reached a stunning $17.8 billion.
“The incidence of buying foreign goods via China cross-border e-commerce platform was higher than overseas platform and physical visits.” Young said. Citing data from the research, 60% China online shopper purchased foreign products from China e-commerce platform, and 50% from international e-commerce platform, 40% during overseas travel. So, Hong Kong should hold on to the local cross border e-commerce channels to tap into Chinese consumers’ thirst for foreign products.,
The research also classified the mainland foreign goods consumers into three groups, for the Hong Kong`s emerging cross border e-commerce to differentiate its offer focuses. First the Cross-border Super Consumers who want to broaden shopping choices and spend 24,050 yuan on make-up, clothes, and electronic products from foreign markets. Then the Pragmatic type spending nearly 10,000 yuan to improve life quality and sometimes safety assurances. And there are the Novelty Seekers aiming fun and products of better value.
E-commerce platforms can either compete with overseas travel on shopping, or complete the larger appetite for foreign goods purchases. And Hong Kong has to play with the double-edge sword in the right hand.
About Nielsen
Nielsen Holdings plc is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world’s population. For more information, visit www.nielsen.com.