Meat firms should target China’s tourists

By Mark Godfrey

- Last updated on GMT

Japan has been using Chinese social media to promote its popular Kobe beef
Japan has been using Chinese social media to promote its popular Kobe beef

Related tags: Hong kong, China

Hotel chains like Hilton, InterContinental and Sheraton and airlines like Air Asia, Air China and Cathay Pacific have been busy expanding their operations in China to capture the rise in outbound tourist numbers due to stronger incomes and a stronger currency, according to a report compiled by Hong Kong-based investment bank CLSA.

Chinese tourists are set to become a major force in global meat consumption, with numbers of Chinese visitors to Australia and Japan expected to soar due to recently devalued currencies and visa policies to lure them, while the US has come out as the number one destination goal for Chinese tourists. The UK also ranked in the top 10 most desirable destinations for Chinese tourists, said report co-author Aaron Fischer.

The report identified social media as a key influencer of destinations and spending patterns by Chinese tourists. A survey of the popular Weixin and Weibo microblogging platforms showed numerous photos and reviews of Australian establishments Kingsleys Australian Steakhouse in Sydney and the city’s Prime Steak Restaurant posted by Chinese tourists.

Top Japanese beef restaurants, meanwhile, have been using Chinese social media as a way to draw visitors. As well as regularly-updated profiles on Weixin and Weibo, renowned Tokyo wagyu beef restaurants, such as Kobe Beef Kaiseki 511 and Ginza Yoshizawa, have also both added Chinese-speaking staff to take orders in Mandarin, judging by calls to both establishments.

High steaks

With American beef still restricted from mainland China, a flood of Chinese tourists into the US could boost consumption at source. “Dining at restaurants is good because certain foods, particularly red meat, are much more expensive back home,​” explained Kevin Yao, a Beijing-based tourist who in late January returned from a two-week trip to the US. America’s huge Morton’s The Steakhouse chain has an outlet in Beijing, but prices are “considerably cheaper” in the chain’s US outlets, noted Yao, an aviation equipment salesman who dined in Morton’s outlets in both New York and Los Angeles.

Likewise, the presence of Burger King and McDonald’s in China has been an aid to the UK outlets of the chains, which draw Chinese tourists familiar with their menus. However, beefburgers are cheaper in China, though Burger King prices are comparable, noted Chinese tourist and assiduous blogger Yang An, one of a new wave of Chinese tourists choosing to travel independently rather than in tour groups.

China spending to rise

Annual growth in China’s outbound tourist numbers averaged around 20% over the past five years, but growth from 2016 to 2020 is set to average 9%, as the market matures, noted CLSA which compiled its data from surveys of panels of tourists drawn from various regions of China. The trends look set to continue as China continues to urbanise and shift the economic growth model to one based on consumption and services. Wage growth is key. Incredibly, average Chinese urban wages rose from US$3,000 in 2006 to US$9,000 in 2014. That has spawned a whole industry of hotel developments and leisure parks catering for tourists, with Disneyland Shanghai a high-profile opening later this year.

Alicia Garcia Herrero, chief economist at the Hong Kong office of French investment bank Natixis, is confident Chinese spending overseas will continue to rise. “Up to now, despite high-income growth, household consumption has been surprisingly low in China, largely because of a capped bank deposit rate, import tariffs on consumer goods and the cheap renminbi policy,​” she said. “However, all of these bottlenecks have been either removed or alleviated. Thus we expect more expenditure on discretionary items in particular, such as travel.​”

Related topics: Markets, East Asia, Industry growth, Meat, China

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