Emerging markets in the spa industry: China


In the next two posts, we would like to take a deeper look into the opportunities that two Asian giants offer the spa industry: China and India. We would like to start this week’s post by exploring the opportunities the rapidly growing Chinese spa industry promises.

In a previous article we touched upon the subject of the great business opportunity that the growing outbound Chinese tourism presented to the spa industry.  In today’s post we would like to go a step further and talk about a recent article published in spa business.com, titled Moving target, where Leonor Stanton analyses the results of the McKinsey report – Luxury Without Borders: China’s New Class of Shoppers Take on the World, which talks about the increasingly sophisticated Chinese consumer and their purchasing habits in terms of luxury goods and products, and the major challenges that today’s luxury brands face. As Stanton states, “while the report isn’t directly focused on spas, it outlines some interesting parallels for any operator in the luxury business”.


Exclusivity and high spending power

Accodring to the McKinsey report, the sharp rise in the spending power of Chinese consumers has had an impact in the sale of products and services that offer something distinctive. The top end of the high-income earners in China’s growing economy feel the need to continue to differentiate themselves through the exclusivity that only a few industries can offer, those industries that are successful in designing unique and personalized services.

It is estimated that by 2015 34% of the demand for luxury goods will be from Chinese consumers. This consumer therefore is a great opportunity for those brands and services that can continue to make these high end clients feel particularly special, satisfying both their desire to discover the newest, greatest and most exclusive, and also the need to convey their status by using a highly identifiable brands.


High potential for the health and beauty industry

McKinsey’s findings, although challenging for luxury brands, indicate a promising outlook for the spa and wellness industries. The inherent flexibility of the spa business allows us to design unique experiences for even the most demanding of clients, and to also explore two key factors in creating a truly personal experience: a) the surprise factor and, b) the feeling of being absolutely special.

Another interesting point that Stanton makes is that the new lifestyle of the Chinese high class implies a greater socialization, and this has a direct effect on the desire and need to project a personal image of utmost health and beauty.


Embracing “Luxury 2.0” in the Chinese spa industry

In another relevant study cited by Stanton, conducted in May of 2013 by Bain & Company, which focused on the luxury market on a global level, three management principles were listed as the “key for winning in the luxury market over the next 10-15 years”. Only those businesses that “get ready for Luxury 2.0” and relentlessly focus on these three management principles will succeed.


So where does the spa industry fit in? If we take a closer look at these principles, it is evident that they can easily be extrapolated to the spa industry:

  1. Superior customer service – Clients with such a large spending power expect to be treated even better that in traditional VIP services. Spas have an advantage above other industries as a spa experience can satisfy this expectation at every level. Spas that pay attention to every detail: location, coherence of spa concept, quality of products used in treatments, customisation of the therapies offered, etc. – will be perfectly placed to meet the desires and expectations of  this new demanding consumer.

  3. Flawless [spa] management – Those spas that allow for no room for mistakes or for the unexpected when catering to this market will have a head-start. An extremely high degree of professionalism and customer service along with impeccable facilities will be a must. The experience this consumer will have while being in a spa must highlight the fact that they are enjoying unique, high-level services specially designed for them.

  5. Staff excellence – Training, training and more training will be key – from receptionists who greet the client as they walk in, through to therapists and attendants and management staff. Basic knowledge of the Chinese language and cultural practices, as well as the specific etiquette that this market expects, aside from a solid training in their areas of expertise, will set one spa’s staff apart from the rest.


Without a doubt, venturing into the Chinese spa industry and catering for this increasingly sophisticated consumer, implies an enormous challenge but, according to the finding of the reviewed reports, this market also promises to have a great potential in profitability and growing stability.


Next week we will delve into Asia’s other great market, India, and look at the differences and similarities between both luxury markets in Asia’s emerging nations.

By Sonal

Sonal Uberoi creates and delivers smarter spas around the world. Spas and hotel groups hire Sonal to help them design, set up and manage their wellness businesses. Her finance background and worldwide operations experience in the spa, wellness and hospitality sectors make Sonal the go-to expert for business optimisation solutions. Connect with Sonal on LinkedIn www.linkedin.com/in/sonaluberoi.

Join the conversation