How Chinese travelers will have an impact on the global hotel industry is a hot topic of conversation, as China’s middle class grows in its spending and traveling habits. Lee McCabe, VP, North America for China-based e-commerce platform Alibaba Group, talked about Chinese travel and spending behavior, and how U.S. hoteliers can take advantage of those trends in a talk at the recent Revenue Strategy Summit.
“Companies are better understanding China and it’s getting much easier to work with China,” McCabe said. “If you’re doing business in the U.S., you have to be thinking about doing business in China because the opportunities are there now.”
Here are four takeaways from McCabe on why U.S. hoteliers should pay attention to Chinese travelers and how to better understand their shopping habits, which includes shopping for travel:
1. Retail in China is driven by e-commerce, not bricks-and-mortar stores
China historically had a weak retail environment because of the lack of space, McCabe pointed out.
“In China, there’s about 6 inches of retail space per person,” he said. “In the U.S. it’s 24 square feet per person. That’s ripe for e-commerce.”
Because so much shopping is done online, China has developed not only a robust logistics network, McCabe said, but also a strong and secure online payments network as well, which enables fast and secure online transactions — which is vital when booking travel.
McCabe cited eMarketer data showing that by 2019, Chinese online shoppers will account for nearly a third of global shoppers, and 55% of all global e-commerce sales will originate from China.
2. Mobile is the internet
“In the U.S., we went from bricks and mortar to desktop to laptop to mobile,” McCabe said. “In China, they went from undeveloped bricks-and-mortar landscape straight to mobile.”