February 21, 2011

Cosmetics, Surgery, Art: How Can South Korea Compete With Japan For Chinese Tourists?

Asian Countries Angling For More Free-Spending Chinese Tourists

Korea is looking to reach out more directly to potential Chinese tourists (Image: Korea Times)

Korea is looking to reach out more directly to potential Chinese tourists (Image: Korea Times)

With Chinese tourists heading out into the world in ever-increasing numbers (50 million last year, according to the World Tourism Organization), many of them with shopping on their minds, retailers in nearby countries like Japan and South Korea have been pulling out all the stops to cater to this lucrative demographic. However, regardless of the promotions that retailers dream up, and no matter how lavishly they roll out the red carpet for Chinese tourists, reality sometimes gets in the way.

In Japan, which had expected a bumper year for Chinese tourists in 2010, the tourism industry took an unexpected hit following the diplomatic spat that flared up between China and Japan Chinese and Japanese ships collided near a group of islands claimed by both nations. In the wake of this spat, dozens of Chinese tour operators, and thousands of Chinese tourists, cancelled their planned trips to Japan, many of them heading instead to South Korea, wallets in hand. As Jing Daily wrote following the China/Japan diplomatic incident last fall:

The potential for more Chinese tourists in South Korea is huge, barring any unforeseen diplomatic rows that could flare up in the future. Last year, 1.3 million Chinese tourists visited South Korea, a significant rise over the 1 million who visited in 2007 and 710,000 in 2005. Driven by the Japan dispute, “Golden Week” and a stronger yuan, the growth rate has risen steeply in the last few months.

Some 1.34 million tourists from China visited South Korea last year, compared to 1.07 million in 2007 and 710,000 in 2005.

According to the South Korean press, the growing spending power of these tourists is enough rationale for the country’s tourism authorities and retailers to reorient themselves to a simple new reality: that Chinese, rather than Japanese, tourists will account for an ever-increasing proportion of sales and tax revenue in coming years. In 2009, Chinese tourists spent nearly US$45 billion overseas, which is around the same amount that Koreans spent at domestic department stores and outlets that year. But how well is South Korea doing in its efforts to attract more Chinese tourists? This week, Korea’s JoongAng looks at this question:

For now, only 3 percent to 4 percent of Chinese tourists visit Korea. If the number is pushed up to 5 percent, as many as 5 million will come to Korea.

To reach its potential with Chinese tourists, a change in mind-set is the top priority. We should not be dismissive or selective and instead view Chinese tourists as valued guests. Furthermore, we tend to think of the service industry as a domestic-oriented one, but when factoring in 5 million foreign visitors, it is not. That is why we need corporate marketing and aggressive strategies to lure them.

We need the kind of products that tourists can buy and enjoy only in Korea. Do you know what the most popular Japanese goods are among Chinese tourists to Japan? Nail clippers with magnifiers and ceramic knives, and Burberry blue label clothing, which is sold exclusively in Japan.

Gaining insight from Japan’s case, how about launching package tours that combine Korean cuisine and shopping? Or how about publicizing the works of Korean artists? Moreover, Korea boasts many skilled aesthetic surgery clinics, including the world’s best hair transplant surgeons. Medical tours need to be developed strategically.

Whether Chinese tourists will increasingly view South Korea as a destination for “medical tourism” and an arts and culinary hotspot? We’ll have to wait and see if (and how) Korea would more actively promote these things in China, but considering Japan continues to promote itself as a luxury shopping mecca, and countries like Singapore are increasing their direct overtures to Chinese tourists as well, Korea will essentially have no choice but to differentiate itself in China as it transitions its own tourism industry to a more China-focused one.

Travel & Leisure
Tag: consumption, japan, luxury tourism, outbound tourism... , More
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