Are Canadian Retailers Ready For Chinese Tourists?
While Canada is seeing a spike in Chinese tourists, few businesses understand how to influence their purchasing habits.
Walk the streets of Toronto or Vancouver and you may hear more Cantonese or Mandarin than ever before.
According to the Canadian Tourism Commission, arrivals from China increased by 57.8% this past February compared to last year, and the trend doesn’t seem to be stopping anytime soon. On the surface, luxury brands and the tourism industry seem to reap the biggest rewards, but who is to say your business can not benefit from this phenomenon? The only thing stopping your business is your willingness to adapt.
While the tourism spike in February coincided with the Chinese New Year, keep in mind nearly 500,000 Chinese tourists travelled to Canada in 2014. More than half of them headed to Vancouver, and 38% of them explored Ontario. The spending power of these individuals has been increasing since 2010 when the average amount of money spent by a Chinese visitor in Canada was only $1,630. In 2013, that number grew to $1,804, and the top four categories of expense revolved around retail, dining, lodging and other respectively, according to Moneris.
Business Insider suggests Chinese tourists are the largest buyers of luxury goods in the world at the moment. On the same token of thought, a few days ago the BBC reported that Apple’s iPhone sales in Greater China may have surpassed the U.S. for the first time. It was only a year ago when doubts were looming over the region’s appetite for Apple, yet ongoing sales paint a different picture. Sales of Apple’s iPhone in Greater China soared 71%, in case you were wondering, and Tim Cook attributes the company’s success to China’s rising middle class. This bit of data may seem trivial, but it ties into studies by Google, which suggest 33% of Chinese consumers use their smartphones during the purchase journey compared to 14% of Canadians.
Given that the Canadian dollar still looks attractive to foreigners, Chinese tourists may have more reasons to use their smartphones for planning a trip to their third most favourite travel destination in the world. Yes, you heard it right, Canada is the third most favourite travel destination for Chinese tourists after New Zealand and the United States. In addition, we have one more reason for tourists to keep on coming back - family. You see, in 2013 there were just over 95,160 Chinese students studying in Canada, and they contributed around $2.4 billion to the Canadian economy.
Nowadays, you may have noticed the UnionPay logo at shopping malls across Canada, or even strategically placed Mandarin speaking sales staff, complemented with dedicated group entrances. Yet, facilitating a purchase does very little for creating brand affinity. So what else can be done? In an article written for Retail Insider, Edward Quan, a luxury goods expert based out of Vancouver also spoke about this dilemma. In Mr Quan’s view, brands must understand the user journey of Chinese tourists, especially the research phase that precedes the final purchase. The majority of visitors use Chinese search engines and social media platforms, making Mandarin and Cantonese speaking travel writers/bloggers quite influential. Language barriers, food preferences and group mentality are just a few obstacles when dealing with Chinese tourists, but the rewards are far too influential to ignore.
As you can see, businesses in Canada may have overseas consumer activity that outpaces brand output. Which takes me to my last question, what is your business doing to understand and influence Chinese tourists before they arrive in Canada? Feel free to comment below. Follow Michael on Twitter @TheMichaelAsh
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