Recovery and Growth on the Horizon for South-East Asia with China Reopening

With growing ease of travel and pent-up intent and savings, many regions across the world are eagerly awaiting Chinese tourists to boost earnings. This signals the beginning of a much-needed period of growth for the global economy, and in particular key markets in South-East Asia. 

The China Tourism Academy forecasts that domestic tourism will recover by summer 2023, and international tourism to recover to 31.5% of pre-pandemic levels, a twofold increase compared to last year. Key cities in South-East Asia have been awaiting the arrival of Chinese tourists and the resultant rise in services and goods consumption. 

With data on consumer behavior and human movement, businesses can now visualize where people go, where they shop, and more. We studied Near’s consumer behavior data to better understand the impact of China’s reopening on key Southeast Asian markets of Singapore, Kuala Lumpur, and Hong Kong and understand:

• How the overall recovery is trending across categories 
• What impact of festivals and holidays have on footfall
• What the profile of visitors seen shopping or eating outside looks like
• How recovery has progressed for Chinese tourists at these destinations

Insight #1: Overall recovery and impact of holidays/festivals

Hong Kong Malls, Hong Kong Grocery and Hong Kong Chinese restaurants

Singapore Malls, Singapore Grocery and Singapore Chinese restaurants

Kuala Lumpur Malls, Kuala Lumpur Grocery and Kuala Lumpur Chinese restaurants

Graph: Footfall for week 1 (26th December) was taken as the base, the chart shows the week-over-week rise/fall. Timeline: 26th Dec to 5th Feb

• The overall trend for footfall across the three categories showed a positive increase with dips and lows during the period studied. New Year holidays fall in week 2 and Lunar New Year holidays begin in week 4 and extend to week 5. Both holidays led to a significant rise in footfall to malls and Chinese restaurants. Footfall to grocery stores during the Lunar New Year recorded a decrease in footfall as families chose to celebrate by eating out or celebrating at home with friends and family. Compared to Hong Kong and Kuala Lumpur, recovery is slower for grocery stores in Singapore but picks up during the Lunar New Year. 

Singapore ( 2022 - 2023 )   

Hong Kong ( 2022 - 2023 )

• Chinese restaurants in Singapore show a 50% increase in visitors a day before the Lunar New Year, but this could also be due to lower-than-average performance during the first two weeks. Comparatively Hong Kong shows a steady increase in visitors to restaurants, also influenced by the arrival of visitors from the Chinese mainland. 

Retailers and restaurants can expect the footfall to only increase as the summer holiday season approaches and Chinese tourists resume international travel. With an increase in visitors expected retailers and restaurants will have to ensure they don’t face logistics and supply chain issues. 

Insight #2: Profile of visitors

Consumers are eager to return to normal and resume pre-pandemic behaviors when it comes to shopping at malls and eating out. We assessed the customer profile of visitors seen at malls, restaurants, and grocery stores, Here are the key findings:

• Families enjoyed shopping at malls in Kuala Lumpur before the Lunar New Year.
• Consumers from affluent families enjoyed eating out at popular fine-dining Chinese restaurants in Hong Kong, comprising 48% of the visitors. 
• Consumers from the older age groups also enjoyed dining out at Chinese restaurants during the holidays in Hong Kong.
• Visitors to shopping malls in Singapore were likely to be from higher-income groups and belong to young professionals or affluent family categories.

Insight #3: Footfall of Chinese Tourists

The timeline of this study covers the reopening of domestic borders in China, so we assessed the recovery of visitors from the Chinese mainland in Hong Kong. 

 Graph: Percentage is calculated keeping the average footfall for the entire period as the base

As seen from the graph, a steady stream of visitors from the Chinese mainland visited Hong Kong, picking up from week 2 and reaching peak levels during the Lunar New Year. The numbers are expected to increase as the summer holidays approach. While recovery might not reach pre-pandemic levels, Hong Kong can still expect an increase in visitors fuelled by pent-up demand and favorable policies from the Chinese government to aid recovery. 

Outlook

Southeast Asian markets can expect China’s reopening to significantly boost recovery. Tourism-related sectors such as hospitality, restaurants, and retail can especially benefit from the return of Chinese tourists. Apart from leisure travel, Singapore, Hong Kong, and Kuala Lumpur will also benefit from increased business travel with the return of events, conferences, and exhibitions.  

This growth is likely to accelerate due to recent policy changes. On March 10th, 2023, the Chinese government issued a circular that permits travel agencies and online tourism companies to offer outbound group travels and tours for Chinese citizens to countries in Europe and South-East Asia. The government also relaxed another restriction by resuming accepting visa applications from foreigners, ending cross-border travel limitations from the Zero Covid policy. The U.S. CDC also rescinded the special Covid-19 testing regulations for travelers from China and its administrative regions on March 10, 2023. 

Watch this space for more data stories around recovery in key Southeast Asian cities, China’s reopening, and more.