China to lead global luxury market

China to lead global luxury market

Asia Pacific is set to dominate both the inbound and outbound tourism sector over the coming decade, with China leading the way.

That is the view of speakers and panellists at the Asia Luxury Travel Market, taking place this week in Shanghai, China.

Charles Goddard, Asia Pacific editorial director at the Economist Intelligence Unit, told the ALTM Ultratravel Forum, the recent global financial crisis had tilted the economic gravity of the world from west to east, particularly China and India.

“China, despite the crisis, and because of economic stimulus packages, had continued to grow in the last 18 months by between eight and nine per cent.

“This shift would be even more dramatic if China became more consumption driven as opposed to export led, and this was beginning to happen.

“Asia was the growth market ‘par-excellence’ with 50 per cent of global consumption being centred in the region in the next four to five years.

“An explosion in travel would be an offshoot of this phenomenon,” he said.

The sentiments mirror those recently expressed by delegates at the World Travel & Tourism Council summit in Beijing.

Nick Debnam, partner in charge, consumer markets, KPMG, China, added China is now the second largest market for global consumer brands having surpassed the USA in the last 12 months.

“It will become the number one market overtaking Japan in the next two years.

Brand recognition was high and the reason for purchase was shifting from “showing off” to “self reward”, he said.

This highlighted the willingness of people to be open to an “experience” and this boded well for the travel industry.

To meet expectations however, more Mandarin speakers needed to be engaged in overseas markets to satisfy the needs of not only luxury Chinese buyers but also travellers.

Companies offering services also needed to have a solid internet marketing and fulfilment strategy given the high new media usage in China.