Mobile Payments a Must for Brands Vying for Massive Chinese Tourism Spending

65% of Chinese tourists sampled have used mobile payments when making purchases while traveling overseas. This compares to the mere 11% of tourists from other countries.

According to a recent white paper released by Nielsen and Alipay, 65% of Chinese tourists sampled have used mobile payments when making purchases while traveling. This compares starkly to a mere 11% of tourists from other countries who paid for items using mobile methods

For brands catering to Chinese tourists, the message is simple: make Chinese mobile payment methods available or risk missing out on sales.

In the Nielsen-Alipay report, “Outbound Chinese Tourism and Consumption Trend: 2017 Survey” a survey found that 91% Chinese tourists were more likely to buy from a merchant if they supported Chinese mobile payment services.

Graphic: Nielsen

Along with the significant growth in per capita income of residents in China, the number of Chinese citizens traveling overseas has also been steadily increasing year by year, said the report.

According to the China National Tourism Administration, Chinese tourists traveled overseas on 131 million occasions in 2017, an increase of 7% from the previous year.t Additionally, statistics from the International Tourism Association shows that the overseas spending by Chinese tourists last year was as high as 261.1 billion U.S. dollars in 2016, increasing 4.5% year-on-year and was ranked first among all tourists worldwide.

“China has embraced mobile payments faster than any country and will continue to lead the global charge in this regard. Mobile payment is on the rise globally, and will continue to support greater connectivity and efficiency across the commercial ecosystem,” said Vishal Bali, Managing Director of Nielsen China.

With so much money at stake, Alipay and quickly rising competitor WeChat Pay, are both looking to cash in. WeChat Pay now works  25 countries around the world and while Alipay used to hold over 80% of the transaction value across China, their market share dropped to 54 percent, with WeChat Pay climbing to 40 percent.

Here are some key takeaways according to the report.

Chinese tourist hold more purchasing power than non-Chinese Tourists

According to the whitepaper, in terms of the average annual spending by different groups of tourists while overseas, Chinese tourists spending has been increasing steadily. In 2017, the average of Chinese tourists’ spending while overseas reached USD 5,565 and is expected to reach USD 5,715 in the coming year, a projected increase of 3% year-on-year.

Led by young consumers, 65% have used mobile payments overseas

For Chinese tourists, the question of how to pay for various expenses has always been a key concern during their trips abroad. Cash is often considered inconvenient to handle. On the other hand, mobile payment are regarded as convenient and safe by Chinese consumers. However, another question remains for mobile payment brands: can mobile payment seize this opportunity to expand their market share overseas? The whitepaper shows that Chinese tourists use mobile payment platforms overseas far more than their non-Chinese counterparts. During their most recent trip overseas, 65% of Chinese tourists used mobile payment for local consumption, compared with only 11% of non-Chinese tourists.

Mobile payment options boost spending by Chinese tourists

Mobile payment platforms allows outbound Chinese tourists to experience the convenience of fast payment without the inconvenience of cash or loose change, or potential hassle of exchange repayment. According to the survey, Chinese tourists expressed “convenience and speed, and familiarity” (64%) as the primary reason for using mobile payment while abroad. Among other reasons, respondents also chose “feeling proud of Chinese mobile payment brands” (48%), “favorable exchange rate” (43%) and “discounts or promotions” (36%) for choosing mobile payment as the method of payment.

You can access the full report here.