Shopping Paradise: Are Mainland China Tourists Satisfied with the Shopping Service Quality?


Chapter 1 Introduction


1.1  Background     1.1.1  Tourism Development in Hong Kong

            Hong Kong is considered as one of the most successful countries in terms of tourism industry in the world. The prosperity of Hong Kong is paralleled by the active and rapid development of its tourism industry. During 2006, the country have received a total of 25.25 million tourists visits, including the visitors from mainland China, that had helped to generate a total of HK7.3 billion or US billion in income, that made the tourism industry as the second largest generator of foreign currency ( 2008). In 2007, the industry showed a continuous increase in terms of the number of visitors. In September of the said year, there are some 2,120,350 visitors that have arrived in Hong Kong, showing a great increase of 15.9% year-on-year, while the year-to-date arrivals have reached 20,363,764, showing an increase of 9.6% year-on-year (l 2008).


            Hong Kong is known as the central financial hub of Asia, furthermore considered as the Shopping Paradise that attracted thousands of travellers from all over the world. It is one of the most important pillars of the economy of the country. The said situation had improved due to the implementation of Individual Visit Scheme or IVS of the government of China, which allows the citizen of mainland China, to visit Hong Kong in individual basis. Prior to that, people of mainland China, travel by group or business visa. Since then, Hong Kong had become the favourite destination of Mainland Chinese tourists (2006). The said situation has created a tremendous business opportunities to the tourism industry of the country. In 2004, there are about 2.6 million of individual document holders from Chinese mainland that have visited the city since the implementation of the IVS. Furthermore, the scheme had already brought a total of HK.6 billon worth of revenues ( 2004). According to the   (2006), Mainland China reached 58.8% out of the total tourists in .the country by the end of 2006 (see Appendix I).


            The said growing influence of the Mainland Chinese visitors is the primary reason why different players in the tourism industry of the country is focusing on the behaviours, demands and desires of the Mainland Chinese visitors in the process of their decision-making.


 Figure 1.1   Comparison of Actual Number of Visitors (Extract from Appendix I)


1.1.2       Service Quality with Mainland China Tourists

            Shopping is considered as the most common and enjoyable activities undertaken by people during holidays, and in most cases, it provides a major attraction and basic motivation for travel. Due to the current growth and development of efficient transportation systems, the Internet, and widespread use of credit cards, people have been able to travel different places in order to shop ( 2005).


            Shopping plays an important role in the field of tourism. This is due to the fact that, according to, for many tourists, an integral part or even the entire purpose of their travel or visit is shopping. In addition, shopping is a major time-use for many of the tourists, despite of their primary motivation for travel (1998).


            Hong Kong is considered as one of the most fascinating, product-diverse, and accommodating shopping destinations in the world. These are the reasons why the city has been dubbed as a shopper’s paradise ( 2005, 1980).


            Shopping in Hong Kong is one of the most important activities for the Mainland Chinese due to the fact that, Hong Kong has no sales tax, luxury goods can be 10% to 20% cheaper than in China that raised its taxes towards the cosmetic products from 20% to 50% ( 2008). That is the reason why according to the figures that have been released by the Hong Kong Tourism Board, during the first half of 2008, the same-day visitors made up close to half of all the arrivals from the Mainland China from 41% of the last year (2008). Furthermore, people from Mainland China believe that Hong Kong is a major trend setter in terms of fashion and style.


            Tourists from mainland China, spend most of their money on shopping when they come to Hong Kong. During 1996, shopping took the 63% of the total expenditures. From 1996 to 2001, visitors in the city is spending more and more on shopping, that had increased to 64% during 2001. The second largest item of expenditure was hotel bills which took the 17% and 15% during 1996 and 1997; it shows that the spending in hotel bills had decreased in 2001. The third item that travellers spend their money on was meals outside hotels that accounted for 11% during 1996 and 13% during 2001 ( 2005, p. 74). This shows that shopping is considered as one of the most important motivation of the Mainland Chinese visitors in the city.


Chinese visitors are likely to stay in less expensive hotels and devote more of their money in spending for different luxury goods, dedicating a large 73% of their outlay to shopping ( 2008). It shows that shopping has a strong influence and motivation towards the mainland Chinese travellers in Hong Kong.     


All of the said facts and figure shows that shopping in Hong Kong, while travelling has become one of the most important activities by tourists in the city. Since the culture, consumer behaviour, and expenditure patterns of Mainland Chinese might be different from those from other countries, it is critical for the retail shops to provide tailor-made service in order to attract them to buy the products and services. It would be the primary concern of the Hong Kong tourism industry. Therefore, service quality plays an important role in increasing Hong Kong s’ tourism industry and attracting the largest inbound tourist market – Mainland Chinese. Previous observations indicated that customer satisfaction will lead to changes of decision-makers in the tourism industry ( 2004). It is necessary to analyse if this group of tourists are satisfied with the service quality experience in Hong Kong, and make recommendations to the retail shops on how to modify or improve their service quality in order to attract them.


1.2 Problem Statement

There are many retail shops in Hong Kong. There are no limitations or restrictions on which one can or cannot serve tourists. In fact, tourists have no limitation whatsoever in choosing which shop to buy from. Some service providers might be especially trained to deal with different nationalities of tourists, while some others do not focus in serving tourists. All of them are facing the same situation; where in, tourists from Mainland China can walk in and select whatever they want for as long as they are satisfied with the products and services. Therefore service quality in this research will apply to all retail shop service providers in Hong Kong whether their target customers are tourists or not. Although there have been a few studies exploring service quality in Hong Kong s’ many service sectors, such as tour guide (2004), travel agents ( 1999), and the hotel industry ( 2007), little attention has been paid to shopping service. As shopping has become one of the most important motivations for Mainland Chinese to travel Hong Kong, it is therefore critical to examine tourists’ satisfaction with shopping service and enrich the knowledge in this field.


1.3 Research Objectives

The aim of this research is to examine whether Mainland China tourists are satisfied with their shopping experience, and whether they are satisfied with the service quality in the retail shop of Hong Kong. The research is expected to achieve the following objectives. 


1)     To identify the critical success factors for retail service providers in servicing Mainland China tourists;


2)     To examine Mainland China tourists satisfaction with the service quality in the retail shop;


3)     To identify methods for the retail shop to build customer satisfaction for Mainland China tourists;


4)     To provide implications to decision-makers in the retail shop on how to enhance service quality to attract Mainland China tourists.


1.4             Significance of the Study

This study conducts a comprehensive approach in order to examine the Chinese tourists’ satisfaction regarding the quality of shopping service in Hong Kong. The result and findings of this study will provide both academic and empirical contributions. Academically, the findings of this study will help to enrich and extend the concept that customer satisfaction may push decision-makers in the retail shop to change the quality of their services. Empirically, this study serves as a valuable source of information on how the Hong Kong retail shop may change its service quality in order to cater the culture and consumer behaviour of the Mainland China tourists. Regarding the student, this research will enhance his knowledge and understanding regarding the service quality and tourism that will serve as a preparation for better career prospects in the future.


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 

 


 


APPENDIX I

COMPARISON OF TOTAL INBOUND VISITORS FROM CHINA


AND ALL OTHER COUNTRIES TO HONG KONG


 


Year


Visitors arriving from China


Annual growth


%


Total visitors arriving from all other countries


Annual growth %


Share of


China visitors


%


1984


214,854


-


3,303,719


-


6.1


1985


308,978


43.8


3,656,717


10.0


7.8


1986


363,479


17.6


4,052,641


10.0


7.0


1987


484,592


33.3


4,917,044


17.5


9.0


1988


683,604


41.1


6,167,221


5.4


10.0


1989


730,408


6.8


5,984,501


-3.0


10.9


1990


754,376


3.3


6,580,850


10.0


10.3


1991


835,062


16.0


6,795,413


3.3


10.9


1992


1,149,002


31.3


8,010,524


17.9


12.5


1993


1,732,978


50.8


8,937,500


11.6


17.2


1994


1,943,678


12.2


9,331,156


4.4


17.2


1995


2,243,245


15.4


10,199,994


9.3


18.0


1996


2,311,184


3.0


10,662,580


4.5


17.8


1997


2,297,128


0.6


8,976,249


-15.8


20.4


1998


2,597,442


12.9


7,562,204


-15.8


25.6


1999


3,083,859


18.7


8,244,413


9.0


27.2


2000


3,785,845


22.8


9,273,632


12.5


29.0


2001


4,448,583


17.5


9,276,749


0.0


32.4


2002


6,825,200


53.4


9,741,182


5.0


41.2


2003


8,467,200


24.1


7,069,639


-27.4


54.5


2004


12,245,862


44.6


9,564,768


35.3


56.1


2005


12,541,400


2.4


10,818,017


13.1


53.7


2006


13,590,000


8.4


11,660,000


7.8


53.8


Compound growth/annum


 


20.7%


 


5.9%


 


 


Source     A Statistical Review of Tourism, 1984-2006, Hong Kong Tourism Board


 


 


 


 


 


 


 


 


 


 


 



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