Trends in China’s Outbound Market to Japan （Vol.2）

The previous report* focused on the latest trend in China’s outbound market to Japan. Almost every travel company that JTM interviewed forecasts China’s outbound tourism to further expand and intensify. Then, from now on in China, who will be the ones to choose outbound travel as part of commodities and how would a travel product be selected among numerous other purchasing choices?

“As traveling abroad is more common now for consumers in China, cars and high-grade electric appliances would be the top two competitors to overseas travel products”, assumes the general manager of Shanghai Mei Long Zhen Isetan, a department store located in the centre of the city.

Currently in Shanghai, one can purchase a compact car at around 60,000 RMB (approximately 900,000 JPY) including expenses. The amount almost equals to the average annual income of an average business person working in Shanghai. Looking at personal computers also boosting in demand now, price starts from 5,000 RMB (approximately 75.000 JPY), which is equivalent to a tour package to Japan. In the case of trendy mobile phones being highly popular among young people today, average price is around 3,000 RMB (approximately 45,000 JPY), which is as much as the cost of making a trip from China to somewhere Southeast Asia for 2-3 days.

What can be seen here is the rapidly rising income level appearing in China’s big cities like Shanghai. Average businessmen can now afford pricey consumer goods previously purchasable only by limited number of elite ones. Overseas travel products are one of the choices today.

In China’s urban areas, more large companies now adopt entirely performance based compensation system, which eventually is increasing the number of young, highly educated, high-income adults. In particular, many of those who were born after the “one-child policy (since 1979)” belong to the newly emerging market segment. Usually well educated and on the main career track, they work hard for higher income, motivated by an entirely ability-based wage system. Since the introduction of the one-child policy, the first age group, so-called “post-80 generation”, is now reaching their late 20s. They are the ones who enjoy economic affordability in everyday life.

The female in this generation is observed as highly conscious on consumption and latest information. They are never reluctant to check out latest trends through the Internet and women’s magazines. They follow what is hot in Japan. They lead China’s consumption by enjoying shopping by credit cards and being positive in traveling abroad.

Another trend-setter is China’s elite businessmen, of ages under 45 and most of them being in their 30s now. Many have experiences to have studied in countries such as the USA or Japan. They often visit Japan on business and incentive trips, enjoying the country on their own way; well aware that Japan’s attractiveness is not limited within the so-called “Golden Route”. Travel companies in China are observing the travel trends in such elite businessmen. As attractions and destinations in Japan now cultivated by these heavy repeat travelers could become touristy spots for future outbound travelers who may no longer be satisfied just by “Golden Route Tours”.

It is quite obvious that young, elite businessmen will be the next strong market segment to lead outbound tourism in China. For the travel related industry it is important to focus on these movements.