The number of middle-class households in mainland China has reached 33.2 million as of August 2018, more than half of which are in Beijing (17.54%), Shanghai (17.35%), and Guangdong (15.19%) according to a Hurun report. Ranking by regions, East China retains the highest density with more than 14.84 million middle-house households, accounting for over 40% of the total. Over 10 million out of the 33.2 million households are the new middle-class. 

The annual household income of China’s middle class is at least 300 thousand yuan (US$43.5k) in tier-1 cities or 200 thousand yuan (US$29k) in other cities.

Besides the wealth, the new middle-class is also well educated with steady living status, owning at least a house in habitual residence and a work with a competitive salary. China’s new middle-class is less than 30% of the total middle-class. Post-80s become the main force of the new middle-class, and there are post-70s and post-90s. And, they consider themselves as middle-class.

The average age of the new middle-class group is 35. They have a Bachelor’s degree or higher education level and prefer trending topics such as financial investment and TMT (tech/media/telecom). Normally, they have already made it to management positions or become a professional freelancer.

They are no longer satisfied with just a house, car, or consumption capacity; they pay more attention to improve self-cultivation and life quality. They have been developing the habits of reading, working out, and traveling.

Post-80s, being at an average age of 33 and making advances in their careers,  care about self-investment. They start to bear the responsibility of taking care of both their parents and children. The aging population comes along with the shortfalls in pension provisions. They try to find a balance between work and family.

Nearly half of new middle-class have more than 20 days of paid leave in addition to the public holidays everyone enjoys. The younger post-90s enjoys the longest length of holidays. In contrast, holidays for those living in new tier-1 cities are 2 days less than others.

Traveling (53%) and workout (40%) are the two most popular entertainment activities among China’s new middle-class.

They do care about physical status and are highly enthusiastic about exercising and working out. That has become a major part of their everyday life. Among them, post-90s are the most active group as over half of them do the workout at least four times a week. However, they do not feel more satisfied with their body figure than post-80s and post-70s.

On average, the new middle-class went on 5 private person-trips in the past two years. Post-90s traveled the most, with 17% of them traveling more than 9 times. In terms of themes, 69% of them chose leisure travel and 37% traveled together with parents or children.

75% of the middle-class feel happy. Wealth status is the most influential factor in the sense of well-being compared with household life and work satisfaction. Though women report being happier than men among this group, the difficulty in balancing work and family is the prime reason for a lower satisfaction, especially among the post-80s who are at the peak earning age.

The new middle-class’s feelings of well-being declines across the age group. Post-70s’ the least happy while post-90s’ the happiest. Furthermore, those living in tier-2 and tier-3 cities are happier than others.

Child care and education (45%), as well as financial management (42%), are the two biggest sources of anxiety among China’s middle-class.

The new middle-class in China also have such kind of worry about falling out of the middle-class if they fail to maintain or appreciate the value of their assets. On average, they have 1.08 million yuan (US$156.61k) investable assets. Their problem is how to manage those assets.

74% of them aim to steadily increase the value of assets and 23% just want to maintain the value of assets. Currently, they mainly rely on traditional financial products supplemented by internet finance. They have low intentions for real estate and P2P leading in order to avoid risks.

This article is an excerpt of CIW eBook “Meet China’s New Middle Class“.

Kantar’s social media report has found that Chinese respondents are generally happy with changes brought by social media. People born in 1990s (post-90s) showed more caution against negative impacts of social media. 

WeChat continues its dominance, however, its growth has largely slowed down. Weibo is making a comeback, many new and old social media platforms are managing to find value developing niche user groups.

Growth of Social Media Platforms in China

While usage penetration and daily active user base keep increasing among all WeChat users, its popularity among 18 to 25 years old had a slight decrease according to Kantar’s research.

Weibo penetration rate had a significant increase, and its influence among younger generation rose.

QQ penetration rate remains unchanged, but usage is increasing among younger users.

Old age groups represent the social media growth hotspots.

“Makeup before leaving home” has been accepted by more female social media users in China. Chinese social media users aren’t necessarily always on the go: they prefer to stay home if nothing special is going on. Inner beauty has a greater recognition among them, and they are more increasingly ready to join charitable causes.

Social Media is Everywhere

Social media not only refers to applications like WeChat, Weibo, QQ and Momo, but also includes thsoe with social functions in video, news, e-commerce, etc.

Mango TV, the video app launched by Hunan Satellite TV Station, is expanding quickly among the young users.

Mobile news app Toutiao grows rapidly

The most recognized positive feature of social media is to help people keep track of friends and family members, followed by following trending topics and learning new knowledge.

Female users feel social media is helpful in making purchasing decisions, relieving pressure and enhancing self-confidence.

Younger generations see social media as an important way of relieving stress. Older generations use it for effectively communicating with friends and family members.

Social media also creates negative impacts in China:

Younger social media users in China are more aware of negative impact brought by social media who are more cautious against impulsiveness, loss of concentration, negative values online, and etc.  90% have taken actions to control the damage, and self-discipline was the most chosen path.

Around 40% of the 90s respondents said they turned off social media app notification.

More than 95% users admit they pay attention to the level of personal information they share on social media according to the survey by Kantar.

Most social media users selectively pay attention to social ads, dominated by Tencent and Weibo. The most important factor is whether it is “humorous and interesting”. The second most important factor is the ads’ relevance with the audience.

Chinese consumers want ad (in all formats) with humor, music and interesting stories.

Most users feel social ads are quite relevant to them.

WeChat is the most satisfying app. Life service reviewing apps/sites, such as Dianping and Ctrip, ranked second at 81.7, followed by social functions on e-commerce platforms (81.2).

WeChat stands out in both usage rate and user ratings; and, dating social networks haven’t made an impact in China yet.

Weibo received particularly positive scores by younger generations: the younger the users are, the higher score they’d give Weibo. The post-90s gave it 79.3 score. Weibo’s monthly penetration rate grew by 3.7 percentage points in April from a year ago to 35.7%. While the penetration rate among the 18-25 age group jumped 13.7 percentage points to 45.9%.

Post-80s users give the highest rating for dating social networks, probably because it is most in demand among them due to their life stage (generally, marriage is a pressing and sometimes depressing issue in China when one reaches a certain age).

Social function within video/live streaming platform is popular among post-80s and post-90s.

Social function within news apps gets a score of 79.7, and are preferred by users in tier-1 cities in China.

Shopping of new year goods (a.k.a. “Nianhuo” in China) is a tradition of Chinese New Year (“CNY”) when retailers should get ready in advance. Data from Alibaba revealed some insights about this shopping season.

Tmall has sold 380 million new year goods with daily average transactions grown by 42% YoY. Taobao new year goods sales increased by 36% YoY; each user on average visited 5 stores. Rural users from over 28 thousand villages across China bought new year goods on Taobao.

Urban areas accounted for 83% of all sales during the new year goods sales 2017. 83% of orders were placed via mobile apps. Chinese millennials (post-80s and post-90s) are the main forces of Chinese New Year shoppers, accounting for close to 80% of total consumers’ spend.

Apparel and cosmetics are the popular categories among post-90s while electric appliances, household consumption, home supplies, and maternal supplies are the top spend categories among post-80s.

The Most Popular Online Shopping Cities

1. Shanghai
2. Beijing
3. Shenzhen
4. Guangzhou
5. Hangzhou
6. Suzhou
7. Chongqing
8. Chengdu
9. Dongguan
10. Tianjin

Purchase of air purifier during CNY has seen significant growth during the past two years.

The pet economy in China has seen an average growth rate of 48% since 2010 and became a 98 billion yuan (US$14 billion) market in 2015 according to Carat. At the end of 2015, the number of pets in China has reached 100 million in total. 

Chinese consumers are willing to spend an average of over 400 yuan (US$58) monthly on their pets; the millennials (post-80s and post-90s) spend higher than the average and closer to 500 yuan (US$73)  per month.

China is now ranked third in the world for dog ownership, behind the US (55.3 million) and Brazil (35.7 million), with a total of 27.4 million pet dogs according to The National Bureau of Statistics of China. China also ranks the second in the world for cat ownership.

64% of dog owners and 67% of cat owners feed their pets with pet food all the time to most of the time according to Carat.

China post-80s spent an average of 120,000 yuan(US$17,330) online in 2016; and, mobile payment accounted for 92% among China post-90s consumers.

Alipay mobile client released a function today to allow users to generate and check the annual spend statement in 2016; and, it generates a poster-like image to share in social media. Many users shared on WeChat and Weibo.

Alipay has 450 million verified users in 2016 according to Alipay; mobile payment accounted for 71% of total payment, comparing to 65% in 2015. Guangdong province ranks first in 2016by total annual payment, accounting for 16% and followed by Zhejiang and Jiangsu.

Related: Alipay is launching a special Hongbao campaign utilizing Augmented Reality to make it more interesting and engaging. Read more here »

Shanghai ranks first by total annual average online payment per person (148,000 yuan or US$21,400), followed by Zhejiang, Beijing, Fujian, and Jiangsu (each over 100,000 yuan).

Chinese millennials are the main forces of online payment market. Chinese post-80s, those born between 1980 and 1989, made an average online payment of 120,000 yuan (US$17,330) per person in 2016. 92% of post-90s’ online payment came from mobile.

Ant Check Later (or huabei, working like a virtual credit card), another consumer credit product from Alipay’s company Ant Financial, has about 100 million users; 86% are millennials. 3.2 billion online transactions used Ant Check Later in 2016, an increase of 344% over 2015.

As of 31 Dec 2016, over 60% of Alipay finance management users come from tier-3, tier-4, tier-5 and rural areas. Over 330 million users bought internet insurance service on Alipay in 2016.

Also check out China Online Payment Overview 2016 »

APASs, or Alibaba Passport, is a membership program in which members are assigned personal account managers and organizing special events like wine tastings and automobile test drives.

APASS members are Alibaba’s top shoppers who are mostly young, internet-savvy and increasingly affluent members of China’s rising middle class. Each member spends at least amount of US$15,000 a year on Taobao/Tmall. And, that’s also the requirement to qualify for the membership.

The average annual spend among current APASS members is about $45,000. During Alibaba’s recent Double 11 Global Shopping Festival, a 24-hour online sale, APASS members spent nearly eight times as much as the average consumer shopping on Alibaba’s platforms.

There are about 100,000 APASS members, 59% of which were born in 1980s (post-80s); the second age group is post-70s (24%) and post-90s (11%).

Find out details in Guide to Alibaba’s three levels of retail membership program

Chinese millennial shoppers are shifting toward an emphasis on life experiences, convenience, and a healthier lifestyle according to a PwC report on China’s retail and consumer products sector.

The shifting demographics and consumer behaviour are leading the changes of retail in China with younger, urban, more affluence consumers according to PwC. Chinese millennials, a combination of post-80s and post-90s, composed roughly one-third of China’s total population in 2014 based on estimates from Goldman Sachs.

Luxury brands have to rethink their strategy due to downturn luxury retail sales, including an expanded online presence and creating ‘affordable’ luxury products. PwC thinks sales are likely to gradually rebound as cyclical trends turn positive.

Apparel and footwear sales remain resilient with the rise of ‘fast fashion’, ‘premiumisation’ products, and the continued popularity of sports and lifestyle brands with consumers.

Sales in personal and beauty care products remain buoyant in China. According to the PwC report:

Younger consumers’ interest in personal appearance, as well as an expanding line of beauty and environmentally-friendly products, is likely to promote growth in the segment over the short-term

Sales of consumer appliances are decelerating in China and remain sluggish in Hong Kong.

PwC offers a number of insights for companies in the retail and consumer products sector:

• Deepening coopetition: New market entrants challenge established business models;
• Transformative mergers and acquisitions: Moving up the value chain;
• Creating trust: A retailer’s online presence is not exclusively for selling or marketing;
• Data is value: Leveraging analytics and the proper use of data
• Increasing corporate social responsibility

Also read: WeChat Payment reached over 300K retail stores

China millennials, also known as Generation Y or post-80s and post-90s by Chinese marketers, account for 25% of the total population and 73% of outbound tourists in China according to GfK.

China had 109 million outbound tourists who spent a total amount of US$229 billion on shopping in 2015 according to GFK. The top five most popular travel destinations of Chinese travelers have been South Korea, Thailand, Hong Kong, Japan and Taiwan since the beginning of 2016.

China “Millennials” focus on good outbound travel experience, which is both spiritual and material. 15% surveyed by GfK enjoy the experience on luxury travel, 33% on gourmet food, 37% on history and culture, 49% on nature, and 44% on adventure and excitement.

In the recent 15 years, the consumption value of Chinese consumers has tremendously changed. In travel, group travel enthusiasm waned, and the free and easy trips are becoming mainstream. China ‘Millennials’ desire to integrate into the global culture makes destinations with historical and cultural attractions more attractive. Japan, Taiwan, and Thailand are in the top positions while Hong Kong, who has rich resources of shopping, continues to lose Chinese tourists.

China millennials tend to book their free and easy trips in advance; so, marketing campaigns targeting specific holidays should launch one to two months in advance. Chinese tourists to Japan and Taiwan booked their trips one to two months in advance; those to South Korea one month according to GfK.

A total number of 220 million Chinese residents will travel overseas with a total spend of $450 billion in 2025, up from 120 million residents spending $250 billion in 2015 according to Goldman Sachs’ report.

Read more: China Luxury Hotel Users Insight

E-commerce has changed the way Chinese consumers live and its influence keeps growing. China has become the largest online retail market; 1.3 yuan out of 10 yuan was spent online by Chinese consumers in 2015.

In Q1 2016, total online retail sales of goods and services in China was 1,025.1 billion yuan (US$158 billion), up by 27.8% year-on-year. A recent survey conducted by Tencent revealed some habits of China online users.

1. About 30% China online shoppers make impulsive purchase online

64.8% users only access online shopping websites when they know what they want to buy. And, 30.4% browse e-commerce shopping sites without a specific shopping list in mind.

2. Products recommendations in social media is more persuasive than traditional ads.

Social media is better than traditional advertisements triggering online shoppers purchase motivation. 13.2% online users made a purchase after seeing offers from online retailers social media accounts; recommendation from other social media users motivated 10.7% to make a purchase.

3. Impulsive online shoppers rely more on mobile.

The main scenario for impulsive China online shoppers are browsing online shopping websites and buy what they are interested in (51.9%). In comparison, only 19.6% rational online shoppers do that.

Mobile shopping has the most impact on impulsive shoppers; 48.1% of them make a purchase while surfing on mobile.

4. Regular online friends’ recommendations are more influential than online celebrities

Once acquired a large number of ordinary users’ review information, the recommended products can be more persuasive than social online shopping experts’ recommendation to drive a user’s desire to buy.

Among purchases originated from online recommendations, online ordinary users’ review are more purchase (27.7%), followed by those from social online shopping experts (10.7%) and online celebrities (3.6%).

5. China online shoppers value unique features and experiences more.

Only 3.9% respondents deem “where to buy” informaiton valuable.  USP, use experience and pricing are much more valuable information.

6. More post-00s’ online shopping decisions are influenced by celebrities.

29.5% post-00s internet users, those born in and after year 2000, would buy products recommended by their favorite celebrities. That ratio is only 8.8% and 6.3% among post-90s and post-80s respectively.

7. China online users are less interested in popular products with low prices.

Only 21.3% respondents in Tencent’s survey would follow social media accounts or communities who recommend lower priced products; 40.9% would follow them for saving shopping time.

Also read: China Cross-border Transactions to Reach US$1 Trillion in 2016

Daily active Users of WeChat totaled 570 million in China in September 2015 according to Tencemt. Daily active users grew by 64%, compared with 49% in the same period last year. The majority of users were the post-90s and post-80s, and about 60% of users were the young generation from 15 to 29 years old.

As high as 93% of first-tier city citizens used WeChat, and even small counties and fourth-tier or fifth-tier cities had about 26% users. About 280 million minutes of audio chatting were made every day, equivalent to 540 years of phone calls. Users were most active at 10pm, 30 minutes earlier than the peak time last year. Japan, South Korea and the United States were common destinations of WeChat calls.

WeChat red envelopes were redefining new meanings that had become a new expression of love, happiness and even ways to celebrate festivals. On Mid-autumn Festival (Sep 27th 2015), about 100 million users received or sent red envelopes. On the eve of Spring Festival 2015, May 20th (a day to express love), Children’s Day, Chinese Valentine’s Day, Mid-Autumn Festival, etc. red envelope users were also very active. The driving force of WeChat red envelopes were the post-80s.

WeChat users on average read seven articles every day and one book every month. 20:00 pm to 10:00 pm was the peak time of reading. The post-90s liked reading news on entertainment gossip while the post-80s were more interested in national affairs.

Male users spent more on WeChat online shopping, 1.3 times higher than female users. Users had different shopping behaviors in different seasons. In September, users were more likely to buy mobile phone power bank, long johns, and selfie stick.

Over 70% of users played WeChat games every day and 15% of them played very frequently. Chess, puzzle and casual games are the most popular games.

Download the full e-book from Box.com or Baidu Cloud (passcode: mc3d).

Also read: The Value of WeChat Official Accounts

China users’ time spent on digital media has exceeded that on traditional media in 2015. Digital media is the largest media by ad revenue; online ad revenue will continue to grow, especially mobile ad revenues.

According to eMarketer, China internet users on average spend over 6 hours 8 minutes on media per day, of which over 3 hours on social media, 2 hours 40 minutes on TV, 11 minutes on  radio, 10 minutes on newspaper, and only 1 minute on magazine. 94.8% users over 18 years old watch television while spending less time is spent. 46% users use the internet (PC), 43.1% use smartphones, and 42% use feature phones.

The compound average growth rate (CAGA) of print media (newspaper and magazine) from 2011 to 2015 is -7.4%. The CAGA of newspaper is -5.1% and the CAGA of magazine is -7.4%. A report from Kantar shows the number of social media users in urban aras grow quickly from 28.6% in 2013 to 34% in 2014, which indicates that social media gradually become mainstream.

Diversification is one of the most obvious features of China social media, the post-90s are the largest group whose average age in 2014 is 30.4 years old; the average age in 2013 is 28.8 years old, which indicates that more different age-groups begin to use social media.

The number of users in the second, third and fourth-tier cities has increased while the number of users in first-tier cities has declined. The ratio of high education users dropped.

Chinese users prefer to use mobile internet for social media. Most people like using WeChat and Weibo on mobile apps while browsing BBS on computers. And different age level users have different internet behaviors. The post-90s often watch videos, the post-90s often shop online, and the post-70s often read news on the website.

In 2013, China internet users use Qzone most frequently while in 2014 WeChat became one of the most frequent-used mobile apps in China. More original content were generated on WeChat Weibo for the first time in 2014, and the engagement on WeChat was higher.

Chinese users who only read information on social media tend to be more according to data of Chinamedia 360. In 2014, 46% social media users didn’t participate in topic discussion or leave comments compared with 39% in 2013. A majority of users expected to get instant and practical information from social media; and users were more concious of privacies. Thus interactivities turn to be less.

Let’s take Wechat and Weibo as examples.

The average age of WeChat users is 26 years old, 97.7% users are under 50 years old. Most of WeChat users are employees, freelances, students and staff in state-owned enterprises.

WeChat has become an important part of Chinese life. 25% users on average open WeChat over 30 times per day, and 52.2% users over 10 times. About half of WeChat users have over 100 WeChat friends, 62.7% users have over 50 WeChat friends.

WeChat official account is one of the major features of WeChat. About 80% users would follow official accounts, especially accounts of companies and media. 29.1% official account users follow WeMedia accounts, 25.4% follow verified media accounts, 18.9% follow companies, 5.9% follow marketing accounts, and other 20.7% don’t follow any account. Over 40% users want to get information from official accounts.

Official subscription accounts can be categorized in entertainment, health, news, beauty and fashion by content. 42% accounts would interact with fans. Entertainment accounts are most welcome.

Combined MAU of Weixin (Chinese version of Wechat) and WeChat were 600 million as of 30 Jun 2015. Weibo MAUs reached 212 million in Q2 2015. 72% are 19 to 35 years old, the post-80s and post-90s are major parts of Weibo users. Male users made up of 60.9%, and female of 39.1%. Users in South China and East China are more active on Weibo than users in other parts of China.

Also read: WeChat Offers 8 Solutions For Smart Devices

Since the start of 2015, the growth rate of Chinese automobile transaction volume had slowed down its growth. In June 2015, the growth rate of the automobile market was merely 1.4%, 7 percentage points lower than June 2014.

Less developed cities might make a breakthrough for the downturn market. Automobile market in first-tier and second-tier cities shrunk gradually, while buyers in third-tier to six-tier cities increased.

According to data from Alibaba, about 67% automobile buyers who were also Taobao users were from less developed cities. Mainland China has 657 cities while many third-tier, fourth-tier, fifth-tier and sixth-tier cities were small in size and dispersion in the location. Sometimes automobile companies could not obtain a clear and correct evaluation on local market. Social media could be used for penetrate third- to six-tier cities further.

The post-90s would be another important pillar in the future automobile market. In June 2015, the post-90s buyers accounted for 29%, 8 percentage points higher compared with January 2014. The ratio of the post-80s and post-70s auto buyers decreased.

Also read: China’s Mobile Car Calling Market from 2014 to 2015

China social media is now used by more age groups, by fewer educated people and by people in smaller cities according to Kantar Group.

64.7% of 13,341 participants in Kantar research said social media’s impact is positive, 12.1 percentage points lower than a year ago while 12.2% of respondents said social media made their lives worse, nearly doubling last year’s 6.7%.

Social media’s reach among urban internet users in China has increased to 34% from last year’s 28.6%. The post-90s has become the largest age group (37.7%) and the proportion of older generations also increased while post-80s dropped from 44.8% to 30.8%. Most post-80s in China are in early years or marriage, many of which have a child to take care and busy work life. Besides, this generation is more conservative than the post-90s. That contributes more or less to the dropped activities on China social media.

The Kantar survey also found that 15 entertainment WeChat official accounts made the top 50 influential accounts and attracted 49% of total clicks followed. In comparison, the 10 news and information accounts of the top 50 garnered only 5% of all reads.

The average number of reads per post of the top 50 was 39,531 while the average number of likes was 154. On average, an account published just 21 posts each week. For the top three, the average was even lower at 16 posts according to Kantar survey.

On Weibo, Kantar also found entertainment still the largest category (25.4%), followed by news events 19.6%, health and beauty (15.7%), work and study (14.3%), travel (12%) and others (13%). The analysis of emoticons found 67% positive.

You can download the inforgraphic here (PDF).

Report download: Kantar China Social Media Impact 2015 (PDF)

In August 2014, total PPC user reach in China social media service were 470 million with an increase of 10.7% YoY and 0.8% QoQ. Continue reading here.

There are 20 million new babies in China every year. The total value of parenting market in China exceeds RMB500 billion involving over 10 industries. With the increase of family income and stronger consumption awareness for mom and her baby, the market can be seeing strong growth in China.

Among all new generation of Chinese moms, post-80s accounted for 85.1% which are the major group in China. Besides, post-90s are now becoming new moms; their consumption habits and can bring changes to China baby apparel market.

Among the Chinese moms with expectation for babies gender, post-90s favor girls more than boys in China. That’s against Chinese tradition that a boy is often preferred

Housing price in China can influence post-90s and they tend to have baby at an older age.

61.6% of new generation young Chinese pregnant mother have positive attitudes to having new babies. The younger Chinese moms are, and more anxious they tend to be.

Chinese moms who worry about the lack of knowledge and experience accounted for 60.9% in China, which is their primary concern, followed by the worry of whether someone can give a hand with babycare.

Chinese moms tend to trust mom & baby’s magazine, expert & doctor and parenting website & online community with more powerful and useful knowledge.

Also read: China Mother Care B2C Market Exceeded $3 Bln in Q3 2014

Chinese post-90s are the most active QQ users, accounting for 39% of total users, followed by post-80s and post-00s according to Tencent on Tencent’s Open Day in October 2014.

During period from 4 August to 10 August, Tencent QQ’s daily user coverage exceeded 220.75 million, accounting for 63.5%, ranking the top among China online instant messengers, and effective time on Tencent QQ went up to 759.33 million hours, accounting for 90.7% of total effective time in China instant messengers market.

Tencent QQ got into guinness world record for having the most number of simultaneous online users on an instant messaging platform on 3rd July, 2014.

QQ is making efforts to be featured with young design, colorful characters and social diversity. Tencent is establishing online community based on common interest on mobile QQ. According to research of Tencent and EnfoDesk, 40.89% of Chinese post-90s would like to make friends with ones who have common interest through online social media.

Smart device MAU of QQ was 542 million, more than WeChat which was 468 million in Q3 2014. This is a bit surprising considering the growth rate of QQ has been slowed down.

Also read: The Latest Stats on QQ and Wechat in Q3 2014

China outbound tourists on average spent RMB 20,000 (US$3,252) during travel per person and shopping is an important part of their spend in oversea trips (57.8%), according to a report released at Beijing Fragrant Hills Tourism Summit, organized by World Tourism Cities Federation (WTCF).

Outbound Chinese Tourists Love Shopping

Chinese tourists came out tops again as the world’s biggest tax free shoppers in 2011 who chalked up more than US$2.3 billion in tax free shopping transactions. Each Chinese shopper’s tax-free average spend more than US$1,041 per person, which was much higher than their Japanese US$681 and Russian (US$461) counterparts.

Australia is the latest country trying to attract well-heeled Chinese travellers, and has launched a new $250 million dollar advertising campaign including new broadcast, print and digital advertising showing key attractions such as the Bungle Bungles, Lizard Island and Uluru. That makes sense as China is now the second most popular source country for visitors to Australia, following New Zealand with 1.2 million trips from across the Tasman in the last financial year according to the Australian Bureau of Statistics.

China outbound travelers spent a total amount of $128.7 billion during their trips overseas in 2013, an increase of 26.8% YoY according to the WTCF report. 43.93% surveyed traveled overseas for the purpose of shopping. On shopping of luxury products, Chinese travelers tend to make the purchase in oversea trips. In addition to Hong Kong and Macau (26%), Europe (23%) and US (10%) became the important destination of Chinese travelers for shopping.

Related: What International Hotels Need to Know About Chinese Travelers

Demographics of Chinese Outbound Travelers

China’s outbound travel market reached 98.19 million person trips in 2013, with an increase of 18% YoY. Primary outbound travelers in China came from Shanghai, Guangdong, and Beijing, followed by coastal provinces such as Jiangsu, Zhejiang and Shandong. Over 56% are post-80s, followed by post-70s (26.4%) and post-90s (11.3%).

The average monthly income of China’s oversea travelers is RMB 11,512 (US$1,872), which is three times of the average income in mid-size and large-size Chinese cities in 2013. And, the average monthly family income is RMB20,767 (US$3,377).

70% of the Chinese tourists surveyed will arrange oversea trip at least once a year; 37% more than once a year. 87.6% got help from travel agencies for travel planning out of convenience consideration.

Related: Chinese Travel Willingness Report

Chinese Travelers’ Favorite Outbound Destinations

In 2010, 85% of the 2.3 million Chinese outbound tourists in Europe traveled to 4 countries (France, Italy, Germany and the UK); the vast majority of the packages to Europe include France. For the Chinese, Europe’s attractiveness is a result of three factors: the presence of outstanding landscapes and natural sites, the overall hospitality and atmosphere and the variety of cities and places to visit according to a Roland Berger survey.

Cities in Japan and Korea were the most visited among Chinese outbound travelers. In long haul outbound travels, Paris, London, Rome, Berlin, Washington DC and Los Angeles are the most popular ones. By total spend during outbound trips, these are the top 10:

1. Seoul
2. London
3. Paris
4. Berlin
5. Zurich
6. Athens
7. Barcelona
8. Los Angeles
9. Toronto
10. San Francisco

The main things troubling Chinese travelers are visa application and language barriers. 31% respondents said the service staff at entertainment places could not speak Chinese; 38% compaint about the lack of road signs in Chinese language.

Easier visa approval, streamlining and speeding up procedures will drive more Chinese outbound travelers, said the report. Chinese hope that European countries and the US could set a lower bar for their visa applications; and, Japan and South Korea could provide visa-free trips, visa on arrival or visa-free transit.

Self-guided tours are increasingly popular among Chinese outbound tourists. Some travelers said they preferred trips that helped them learn more about new places. 67.98% of tourists thought tours based on local culture were most appealing.

79.31% of Chinese tourists wanted official Chinese websites for cities or regions. 53.66% said official Chinese would welcome Weibo and Wechat accounts from tourism boards.

Yesterday, Today and Tomorrow of China’s Outbound Tourism

Chinese outbound tourists have been increasing dramatically, in 2004, there were merely 29 million outbound travelers. The rapid development in China in the past decade created a large population of middle class, who held interest for exploring foreign countries. Besides, many European countries and Asian countries simplified Chinese tourism visa procedures, and expected to attract more rich Chinese tourists.

An increasing number of foreign hotels and shops tried everything to cater to Chinese consumers. For example, a world famous department store Harrods in London revealed that it had hired 70 Chinese speaking staff and installed over 100 Unionpay imprinter/POS.

The total number of China’s outbound travelers reached 54.1 million in the first half of 2014, up 18.7%, with a total spend of over USD 70 billion (YoY 20.7%) according to China Tourism Academy. Chinese oversea traveling is expected to grow by 18.2% this year to reach 116 million person-trips spending up by 20% to USD 155 billion.

WTO estimates that 100 million Chinese tourists will travel outside China by 2020.

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