Is China’s overseas spending boom coming to an end?

by Avery Booker

What happened?

Nearly 60% of affluent tourists from China are signaling plans to rein in their shopping while overseas, according to Oliver Wyman ’s latest Chinese Travelers Survey.

Against a backdrop of slowed economic growth and reduced consumer confidence, the data highlights a profound recalibration among Chinese luxury consumers that could shift how international luxury brands engage this critical demographic.

The survey reveals that 57% of respondents plan to trim their overseas shopping budgets, while 45% expect to travel less frequently in 2025.

“Compared to previous surveys, we see little rebound in consumer sentiment around international travel, even among high-income households,” said Imke Wouters, partner at Oliver Wyman and the survey’s lead researcher.

This shift suggests a retreat from the discretionary spending that has traditionally defined Chinese tourism – a trend that will likely prompt luxury brands to rethink their strategies in key markets.

Among those destinations, Malaysia has emerged as a top choice for Chinese tourists, thanks in part to a new visa-free policy introduced in December 2023. Its affordability and accessibility have made it an appealing option for the price-conscious, with 44% of respondents citing the country’s culinary offerings and 33% highlighting its shopping options.

In contrast, Thailand – a long-time favorite – has seen a decline in popularity, driven by heightened safety concerns. This shift in preferences among Chinese travelers reflects a broader trend toward destinations that prioritize affordability, ease of access, and security, influencing how and where they choose to spend.

The Jing Take?

While international destinations adjust to a more cautious spending profile, China’s domestic tourism remains resilient. During Golden Week 2024 , domestic travel levels surpassed pre-pandemic figures, although average per capita spending remained 2% below 2019 levels.

And this trend toward conservative spending extends beyond travel. According to the Oliver Wyman survey, there is also growing demand for “dupe” luxury items among Chinese consumers, particularly millennials. As economic pressures reshape spending power, more consumers are opting for affordable alternatives in high-value categories like fashion, beauty, and jewelry.

This marks a shift in consumer values, with buyers now prioritizing value over prestige, challenging the dominance of established luxury brands. As Wouters from Oliver Wyman notes, “This signals a fundamental transformation in consumer behavior, driven by economic caution and changing perceptions of value.”

The survey’s analysis of 3,787 affluent Chinese consumers with monthly household incomes above RMB 30,000 ($4,100) suggests a redefined approach to luxury. Chinese consumers increasingly favor accessible products that convey perceived value over brand exclusivity, likely impacting brands that rely heavily on loyalty and status.

Additionally, the survey highlights challenges facing Hainan’s duty-free market, where sales from January to August 2024 dropped by 31% year-over-year, despite a 5% rise in visitor numbers during that period. The data also reveals that 41% of respondents now prefer shopping in Hong Kong and Macau SAR , where established shopping environments and attractive policies deliver a competitive advantage over Hainan’s offerings.

To maintain its status as a premier shopping destination, Hainan may need to revamp its pricing strategy, elevate the shopping experience, and strengthen its brand positioning, according to Wouters. “Strategic adjustments in pricing and experience could be critical to reclaim Hainan’s appeal,” she said.

The anticipated reduction in international spending, coupled with an increasing preference for value-based luxury alternatives, paints a complex picture for luxury brands seeking to capture Chinese consumer spending in 2025.

Oliver Wyman’s findings suggest that luxury brands may need to focus on promotional flexibility and tailored experiences that resonate with budget-conscious consumers. As Asian luxury hubs like Japan and Macau adapt to evolving preferences, they stand to attract high-value travelers through experiences that balance exclusivity with meaningful engagement.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Key takeaways

• Nearly 60% of affluent Chinese tourists plan to reduce their overseas shopping, reflecting a shift away from the traditionally high spending levels that have defined Chinese tourism.
• Despite the decline in international spending, China’s domestic tourism remains strong, with Golden Week 2024 seeing travel levels surpass pre-pandemic figures, although per capita spending remained slightly lower than in 2019.
• Chinese consumers are increasingly opting for “dupe” luxury items, particularly in apparel, signaling a shift toward value over prestige and challenging the dominance of traditional luxury brands.
• While Hainan’s duty-free sales dropped by 31% in 2024, Hong Kong and Macau have gained favor due to their established shopping environments and attractive policies, suggesting that Hainan may need to adjust its pricing and enhance the shopping experience to stay competitive.
• To appeal to budget-conscious Chinese consumers, global luxury brands should focus on offering flexible pricing, tailored experiences, and emphasizing perceived value over exclusivity.