Bad news for Japan's retailers as Chinese tourists cut back on buying

They’re still coming in droves — but no longer buying in spades.

After propping up sales for overseas retailers over the past decade with a shopping-driven tourism agenda, Chinese visitors are no longer returning home with suitcases bulging like before.

A new survey by consultancy Oliver Wyman shows Chinese tourist numbers and holiday expenditure continuing to rise last year, even as shopping during overseas travel dropped 17 percent from a year earlier.

The average Chinese tourist spent about 6,705 yuan ($986) on shopping when traveling, down from 8,050 yuan in 2015. But overall holiday spending — including on hotels and sightseeing — rose 3.5 percent to 20,317 yuan from 19,635 yuan, according to the survey of 2,000 travelers from the mainland.

The sea change in spending habits is dealing a blow to retailers from Parisian department stores to Japanese duty-free operators and Hong Kong jewelers, but bigger numbers of wealthier Chinese may create other opportunities for leisure and entertainment operators in popular overseas destinations.

“Businesses globally have to adjust their strategy to think about how to capture the new Chinese tourist dollar,” said Oliver Wyman’s Shanghai-based partner, Hunter Williams. “It’s less about the outlet mall now and more about the national park.”

One reason for the change is the easier access to foreign goods in mainland China due to a booming $60 billion cross-border e-commerce market.

Imported items can now be ordered online and delivered in as quickly as a day, often exempt from taxes levied on goods from store shelves.

That’s damped the practice of buying overseas for the purpose of reselling locally, and the survey showed such resales falling to 3 percent of shopping expenditures from 8 percent in 2015.

Chinese outbound spending still ranks highest in the world. In 2016, travelers from the country spent $261 billion, a fifth of the global total, up from $249.8 billion in 2015, according to the World Tourism Organization.

But the portion contributed by shopping has fallen to 33 percent of overall travel expenditure, from 41 percent in 2015, the Oliver Wyman survey showed.

Chinese consumers no longer need to travel overseas to stock up on items from Playtex bras to Christian Dior lipsticks and Blue Nile diamond rings, which are now available on online portals run by firms like Alibaba Group Holding Ltd. and JD.com Inc. With foreign brands increasingly using the internet to reach Chinese buyers, foot traffic to malls and outlet stores in popular overseas destinations is slumping.

Duty-free retailer Laox Co. reported a 33 percent fall in revenue for 2016 as Chinese tourists spent less, while U.S retailer Macy’s Inc. is shutting 14 percent of its stores to stem sales declines.

Luxury houses like LVMH Moet Hennessy Louis Vuitton SE and Cie Financiere Richemont SA and brewer Kirin Holdings Co. have pointed to sales pressures from fewer Chinese shoppers visiting stores globally, said Bloomberg Intelligence retail analyst Catherine Lim.

The survey also showed that more Chinese tourists are traveling with children and spouses rather than going alone or with friends. That could benefit destinations that offer unique leisure experiences or entertainment options, said Oliver Wyman’s Williams.

“The number of Chinese tourists is still rising rapidly and at quicker pace than their overall spending,” he said. “This should give industry players some pause to think about how to make up for the loss of shopping-related spending through volume.”