China’s New Tier-One Cities 2019: What does it mean for brands targeting outbound Chinese tourists?

According to the Ministry of Culture and Tourism of the People’s Republic of China, an estimated 149 million Chinese tourists travelled out of China in 2018, an increase of 14.7% from 2017. It is critical—and indeed lucrative—for brands to effectively target relevant audiences within this magnitude of a market.

To understand China’s tourism market, marketers must first understand China’s tiered city structure. China hierarchically categorizes its cities based on population, infrastructure, commerce, consumer behaviour, and other factors.

Until recently, China had four major tier-one cities: Shanghai, Beijing, Shenzhen, and Guangzhou. However, 15 new tier-one cities were recently announced. And the most effective way to tap into the Chinese tourism market is to target tier-one cities.

In this article, we discuss China’s new tier-one cities and what they mean for Chinese outbound tourism.

China’s New Tier-One Cities

Yicai, an online financial news portal, recently published a study on the emergence of 15 new tier-one cities in China. This study was conducted by The Rising Lab, the big data arm of the Yicai Media Group.

The Rising Lab analyzed 337 Chinese cities, based on the store distribution of 170 brands and user data of 18 internet companies to evaluate the business attractiveness of these municipalities.

The study assessed these cities by the concentration of commercial resources, connectivity, urban resident activity, diversity of life, and future predictability.

The potential for growth in the Chinese outbound tourism sector remains significant for many years to come. And a huge percentage of China’s outbound tourists come from tier-one and tier-two cities, with Shanghai leading as the city with the highest number of outbound tourists.

We recently found the top 10 Chinese cities for outbound travel in 2018, and apart from the top 4, which comprise existing tier-one cities, the remaining 6 are all new tier-one (NT1) cities.

How do Chinese travellers spend?

Chinese tourists spend a lot when they travel. In 2018, on their trips to 157 countries and regions, 154 million outbound Chinese travellers spent more than USD $120 billion..

Recent trends from a report released by the China Tourism Academy and Ctrip showed that NT1 cities have contributed the largest number of new outbound tourists in the market, and their consumption capacity is comparable to that of existing tier-one cities.

The number of outbound tourists from Xi’an, Guiyang, and Nanchang saw the most year-on-year growth in the first half of this year, while outbound tourists from Changchun and Wenzhou surpassed those from Beijing and Shanghai in spending per capita, at CNY ¥6,946 yuan (USD $1,011) and CNY ¥6,704, respectively.

Platforms for Travel Research

“Most Chinese tourists plan their trips 1-3 months in advance

The use of digital technology in China is disrupting the way its citizens consume information on travel and travel products, thus creating growth in Chinese outbound tourism. Most digital users in NT1 cities have also adopted similar digital platforms as their tier-one city counterparts.

Apart from the main social and search engine platforms of WeChat, Weibo, Douyin, RED, and Baidu, tapping into the big data of large and mid-sized OTAs (online travel aggregators/agencies) is another key to understanding NT1 travellers.

While most Chinese travellers use Ctrip for their travel research and bookings, a huge portion of NT1 independent travellers prefer to use Mafengwo and Qyer for user-generated content to plan their travels.

Understanding the market

Understanding your target audience plays an important role in the success of your digital marketing strategies. For a market with a population of over 1.4 billion people, digital marketing strategies in China can be a little more challenging. Marketers must understand China from geographical, cultural, behavioural, and demographical standpoints. And we can help.

Get in touch if you’d like to learn more about digital marketing to the largest consumer demographic in the world: Chinese travellers.

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