Outbound Chinese travellers could number around 174 million by 2019, spending $264 billion annually. This sum is roughly equivalent to the GDP of a developed country like Singapore. Chinese millennials is the generation that constitutes the largest share of China's travellers, as they already constitute 40% of Chinese outbound travels. Chinese millennials are thirstier than previous generations for the international experience. Indeed, the average wealthy Chinese millennial has been to 13 countries and travelled abroad 3.3 times for leisure in the past year alone for an average of 25 days. With respect to Chinese millennials, it is advisable to view them as "travellers" rather than "tourists", as they prefer to respond to opportunities to plan their own customised trips. Chinese millennials mostly travel for the purposes of leisure or exploring the world. In this article we shall present the most popular travel locations for Chinese millennial travellers.

Asia - Chinese millennials are increasingly craving different experiences

Hong Kong and Macau, which both have similar historical, cultural, and linguistic background as China, is still the preferred travel destination for Chinese millennials. Due to their geographical proximities, they often serve as the birthplace for the worldly Chinese millennial travellers. However, after having visited these regions, Chinese millennials usually crave new and fresh cultural experiences. This is reflected in the statistics of Chinese tourism, which shows that the growth rate of Chinese tourism to South Korea and Thailand are 5 times larger than the growth rates for Chinese tourism to Hong Kong and Macau.

This reflects a recent trend and shift amongst millenials, from preferring to travel to Asian countries with a similar history and culture, to countries with a dissimilar history and culture. South Korea experienced a Chinese traveller increase of 12% since last year. 70% percent of Chinese tourists travelling to South Korea went there for shopping, with each each spending an average of US $2200, which is double the average amount spent by other overseas tourists. A lot of Chinese millennials watch Korean dramas (such as 太阳的后裔, 爱你的时间, 高品格单恋), and many of them enjoy Korean culture and food. Taken together with the fact that the South Korean government has implemented favourable tax refund policies, both shoppers and fans of South Korean culture alike enjoy travelling there.

Source: Daxue ConsultingSource: Daxue Consulting
Source: Daxue Consulting

Growing interest in Thai culture, known as T-Pop fever, is also leading more and more Chinese millennials to travel to countries that are perceived as more exotic. Indeed, Thai television soap operas, known as "lakorn" in China, have become increasingly popular amongst Chinese viewers recently. Furthermore, consumer goods and living costs are significantly lower in Thailand compared to China, thus contributing to making it an attractive travel destination for Chinese millennials. Lastly, they are also attracted to the many cheap beach, mountain, farm, and boutique resorts across the country.

According to Bloomberg, "there's no lack of ill will in China towards Japan. […] And yet, despite this apparent disdain, Chinese tourists can't seem to get enough of Japan." In 2014 the number of Chinese travellers to China increased by 83 percent, causing the Japanese government to increase the Chinese consular staff to handle the surge of Chinese visa applications. It appears that China's travel plans are deterred by the Chinese millennials penchant for overseas shopping. Since China has relatively high taxes on luxury goods, whereas Japan has a relatively low tax rate on luxury goods, a lot of wealthy Chinese millennials travel to Japan for their high-end shopping sprees.

Many Chinese millennials are also travelling to English-speaking countries in Asia, such as New Zealand and Australia, for a fresh cultural experience and a different natural scenery. Due to the higher costs of consumer goods in these countries compared to China, these destinations are not seen as a good hunting ground for Chinese shop-a-holics.

Chinese millennials and the West

According to Roland Berger, USA was still a significantly more popular travel destination amongst Chinese travellers compared to Europe. 85% of Chinese travellers went to France, Italy, Germany, and the UK. Top reasons for travelling to Europe appear to be natural sights, sightseeing, and exploring the local cuisine. Hence, with respect to Europe, the Chinese millennial can be seen more as a classical "tourist". The US is the most popular travel destination for Chinese millennials outside of the US, with as much as 780 000 Chinese tourists visiting L.A last year, spending more than $1.1 billion. The flux of Chinese tourists into US is projected to grow, thanks to a new extended US-China visa agreement.

In conclusion, Chinese millennials still prefer to travel to countries with cultural and geographical proximity. However, recently they are shifting their preferences towards dissimilar cultures in Asia, such as South Korea and Thailand. Although many Chinese millennials travel to the West, Asian countries still remain the preferred travelling destinations, and are likely to be so in the foreseeable future, due to the cultural influence of these countries on contemporary Chinese culture.

Daxue Consulting is a market research and management consulting firm focusing on the Chinese market. We are leveraging a multiple-methodology approach in order to support clients" needs, auctioning traditional methodologies as well as technology-driven tools.

With offices in Beijing and Shanghai (as well as a commercial representation in Hong-Kong), Daxue Consulting"s team is composed of local and overseas-educated Chinese and china-educated foreign project managers. Our commitment to understanding clients" challenges and base all our recommendations on data have convinced more than 100 clients to work with us and come back to us for new research projects.

With a team of 15 full-time project managers and a network of hundreds of data-miners, Daxue consulting is able to cover China entirely in terms of data collection and research. Daxue Consulting is often solicited in order to work on market sizing, market opportunity assessment, acquisition and target identification, consumer understanding. We have worked with major international companies as well as for SMEs.

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