China's tourism needs more than rice cookers

China's tourism needs more than rice cookers

The tourism boom brought on by Chinese outbound travelers during the recent Tomb Sweeping Day holiday has pushed hotel room reservations to more than 90 per cent in Japan where tourists rush to see the cherry blossom during April.

The news follows Chinese travelers' frenzy in purchasing electronic toilet seats and electric rice cookers from Japan during Spring Festival this year.

Heavy spending overseas by wealthy Chinese tourists has resulted in debates among Chinese tourism officials and industry players on how to stimulate the domestic tourism sector.

Shao Qiwei, former director of the China National Tourism Administration, and a member of the National Committee of the Chinese People's Political Consultative Conference, said during the top political advisory body's annual session in March that it is vital to enhance the development of travel equipment manufacturing in the country, and called for the integration of the tourism and manufacturing industries in order to develop tourism equipment that meets market needs and is technologically advanced.

It is estimated that by 2020, Chinese people are expected to travel 4.5 times per capita on average annually, or 6 billion person times with a total spend of 5.5 trillion yuan (S$1.2 trillion).

Peng Decheng, director of the administration's department of planning and finance, said that shopping accounts for 30 per cent of Chinese tourists' domestic spending, while the level is between 50 and 60 per cent in developed economies.

Peng said that it is important to enhance the country's tourism product branding, roll out a group of characteristic products and souvenirs for tourists, and encourage farmers to develop village and agriculture-related products.

Domestic tourism grew 10 per cent in 2014 with 3.6 billion travels made and inbound tourism fell 1 per cent with 128 million visits. There were more than 100 million outbound visits by Chinese tourists, according to official data.

The massive tourism market requires better services and quality facilities, creating opportunities for tourism equipment manufacturers to capitalise on it, from a wide range of sectors such as personal luggage and recreational vehicles.

Luggage sector

An increasing number of Chinese tourists are in need of stylish and convenient travel. As a result, the luggage sector has also been boosted due to the fast rise in outbound and inbound tourism in China. Frank Ma, president of Samsonite Greater China, said its business in China had grown 18 per cent last year, outstripping its expansion in 2013.

In addition to its existing traditional distribution channels, Ma said its active participation in e-commerce, which increased more than 100 per cent year-on-year in 2014, contributed to its impressive growth in China.

Multiple product portfolios, including a high-end luggage brand, Samsonite and American Tourist have also enriched its customer coverage.

The outdoors market, which is surging rapidly in China, is the company's next priority as it plans to market bags suitable for outdoor and leisure activities, he said.

Samsonite plans to open 140 outlets in shopping malls and department stores in China this year. Of these, around 20 will implement the company's multi-brand strategy.

As tourism becomes increasingly popular in China, the nation's travelers are requiring higher quality travel equipment and luggage, Ma said.

Caravan market

Although there is still a huge gap between the number of caravans produced in China and those in Europe and the United States, the Chinese market has great potential, according to industry experts. Total sales reached at least 800 million yuan at the 10th China RV and Camping Exhibition in March.

Figures from the China Association of Automobile Manufacturers show that the average annual sales of caravans are around 1,000 and the total number is expected to exceed 20,000 this year. Meanwhile, the market also offers great business opportunities for Chinese manufacturers.

As the world's largest automobile builder, caravan manufacturing is almost the last blue ocean in China's vehicle industry, said Dong Yang, deputy director of the association.

There were around 30 firms manufacturing RVs in China in 2013, according to the China Recreation Vehicle and Camping Association.

Airplane production

The recession in Western economies has given some Chinese companies the opportunity to boost their general airplane production capacity through purchasing manufacturers in the West.

China Aviation Industry General Aircraft Co Ltd bought a 100 per cent stake in US-based Cirrus Design Corporation in 2011, the first purchase of an aircraft manufacturer in a developed economy by a Chinese company.

More Chinese enterprises will partner with international builders and jointly explore the Chinese market, said Gao Yuanyang, director of the General Aviation Industry Research Center at Beihang University in Beijing.

"China will be not only a leading general aviation market globally, but an important part of the airplane manufacturing chain," he said.

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