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Business

Solo Chinese travelers present new challenges -- and opportunities

The number of independent travelers is soaring, marking a substantial shift in the market

Chinese tourists at Asiatique, a popular night market in Bangkok. (Photo by Marwaan Macan-Markar)

HONG KONG An unofficial invitation from the Danish Embassy to feast on the country's unwanted Pacific oysters became a surprise sensation in China's social media in April. Some internet users volunteered to "eat them to oblivion," while others suggested issuing special visas for Chinese visitors to devour the invasive shellfish that have spread explosively in parts of the Danish coast.

Finland is offering a unique attraction of its own. Its agriculture minister said at a recent food expo in China that the Nordic country has free treats to offer Chinese visitors -- wild berries in its forests.

Off-the-beaten-track activities like oyster hunting and berry tasting are hardly typical for Chinese sightseeing tours, but they are gaining popularity among a new breed of Chinese visitors.

Free independent travelers, as they are known, dislike being herded around in package tours. Many of them are young professionals, often millennials, who can communicate in English and belong to a digital-savvy generation who plan their trips using online resources. The phenomenon is spreading throughout Asia, and a recent survey to be published by consultancy Fung Global Retail & Technology in late July found that China is the leader in this growing market.

China has been the world's largest outbound tourism market since 2012. According to data released by the United Nations World Tourism Organization this April, Chinese tourists made a record 135 million trips abroad last year and spent $261 billion, more than double the spending of U.S. tourists.

Independent travelers are also growing in number. According to its survey by Fung Global Retail & Technology, independent travelers accounted for 52% of all outbound trips from China, compared to just 35% traveling in tour groups. The number of Chinese independent travelers totals roughly 70.6 million, approximately the same as overall outbound travelers from the U.S. This translates into considerable spending power, noted Deborah Weinswig, managing director at the consultancy.

The survey, which polled 800 Chinese tourists, presents a detailed profile of the Chinese independent traveler. It found that those who traveled independently had spent an average of 16,527 yuan ($2,436) on their most recent trip, of which just 56% was for shopping. Japan was the top destination, followed by Hong Kong and Thailand.

About 80% of them used online resources as their main information source for trip planning, much higher than those in tour groups at 52%, according to the survey. While traveling, 65% used smartphones to search for shopping locations.

The survey shows something else -- many in this cohort travel abroad often and there are patterns to the destinations they select.

Chen Yangyang, 27, a lifestyle blogger from the southern Chinese city of Guangzhou, travels abroad three times a year and has visited 26 countries. Chen and her husband skipped their wedding banquet and spent their gift money on trips. "Traveling is my life -- 60% of my income goes to traveling," she said.

In May, Zhang Wen and her friends drove into the scorching desert in Dubai and went sand surfing. The 33-year-old makeup artist said she would rather spend 25,000 yuan for the trip than join a tour group that was much cheaper but lacked flexibility. "Living in stressful Shanghai, I need an occasional getaway to a different world," she said. "We wanted to relax and immerse ourselves deeply in the local culture."

Jane Sun, CEO of Ctrip.com International, China's largest online travel platform, downplayed the impact of geopolitics on their initiatives. "Travel is not political," she told a forum in Hong Kong in late June. "Travel in a way encourages international cultural exchange." But data reveals that geopolitics actually is an important factor. The rankings of Japan and Vietnam among Chinese travelers' top destinations showed sharp drops after events in the East China Sea and South China Sea in 2010. The ranking does not yet cover recent events, but the rocky ties between Beijing and Seoul recently hurt tourism in South Korea.

Garry Stasiulevicuis, president of the U.K.-based consultancy Counter Intelligence Retail, attributed the growth of independent travelers to the easing of visa restrictions and cheaper flights, thanks to the rise of budget carriers.

His consultancy estimates that an additional 161 scheduled international routes departed from Chinese airports last year, 16 of them never-flown-to-before destinations. Of those, half were in Asia and the rest in the Americas, Europe, the Middle East and Africa.

The challenge now is for retailers catering to Chinese tour groups to adapt to the change. Independent travelers typically seek more customized experiences. "Retailers should remember that social media is a driver and is therefore appealing to [independent travelers'] desire for something unique or memorable; this might give them an edge," said Stasiulevicuis.

Some Chinese businesses are expanding globally to make it easier for Chinese to travel independently.

Ctrip raised its stake in MakeMyTrip, an Indian online travel agency, last year. It also acquired the Scotland-based flight search operator Skyscanner for $1.7 billion, a move that will help Ctrip enter markets like Europe and the Americas with flight products.

EASY PAYMENTS The popular Chinese messaging app WeChat, operated by Tencent Holdings, has made cross-border payment available in 10 currencies, including Thai baht and Japanese yen. Its goal is to enable its 600 million monthly active users in China to shop abroad with the convenience of just a code scan on their smartphones -- a payment method used even by beggars to accept donations at home.

WeChat has also launched partnerships with selected businesses abroad. In Singapore, its users will receive discount offers at the Marina Bay Sands casino resort with a shake of their smartphones. Through its social ads function, WeChat mobile users can now preorder at duty-free retailer DFS Group and pick up goods at airports in San Francisco and Honolulu.

"Our current plan is to make this social ads platform available next month to all international businesses," said Stephen Wang, WeChat's director of user growth and engagement, on July 13. He added that the company's recent partnership with Silicon Valley startup Stripe will allow businesses in 25 countries to receive payments from Chinese travelers.

While concerns remain over Beijing's censorship of social media, WeChat's global expansion will count on Chinese outbound tourists and the businesses serving them, rather than foreign users in a new market. "As long as we can continue to serve out the connections they are seeking to people and businesses overseas, the natural demand is probably the best method to reach users overseas," said Wang.

China's digital payment systems are spreading beyond mainland China. The trend is certain to continue to grow.

The country's mobile payment services are scrambling to catch the wave of Chinese travelers going abroad. Alipay -- operated by Ant Financial Services Group, an affiliate of the nation's e-commerce leader Alibaba Group Holding -- ventured overseas in the summer of 2015, when it started operations in South Korea and Hong Kong. It has quickly expanded into 30 countries covering most popular destinations like Thailand, Vietnam, Japan, the U.S. and France. The e-wallet service accepts payments in 19 currencies. These digital payment platforms not only support cross-border e-commerce but also make shopping easier for Chinese travelers.

FOLLOWING THE FILMS Movies are also playing a role in where Chinese tourists go. In 2012, the low-budget Chinese comedy "Lost in Thailand" became a box office hit and prompted many Chinese, including Alex Yang, to visit the Southeast Asian country for the first time.

Yang, 38, the head of an internet company in southern China, now spends his vacations in major Thai cities like Bangkok and Chiang Mai at least twice a year. His budget is about 20,000 yuan for a week-long stay there, which he said is inexpensive compared with domestic travel. "During the Chinese New Year, a hotel room in Sanya [on China's Hainan Island] costs as much as 5,000 yuan for a night."

As for Mingyue from Beijing, avoiding the Chinese crowds is one of her top travel priorities. The 32-year-old owner of a small entertainment business chose her latest destination -- Sri Lanka -- after consulting a friend who she considers "a deep travel expert."

"Sri Lanka is pure, quiet and there aren't many Chinese people there," she said. "Wherever there are lots of Chinese tourists, whether inside China or abroad, it's completely commercialized. It hurts the environment and takes all the genuine local flavors out of a city."

Nikkei staff writers Mariko Tai, Kazumi Sakurada and Zheng Zhi in Hong Kong contributed to this story.

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