The relation between the travel industry, China and Tesco. What is the connection here? China has influenced Tesco positively, due to the fact that as a country, china’s citizens have high spending power, also since Tesco has opened in China it has created opportunities for employment, with 124 stores open the firm would need thousands of employees which have a range of different skills. And so it has the travel industry, due to different reasons, one being the higher acquisition power of citizens allows them to increase their expenditure on trips and holidays. Many of these choose to travel to paradisiac holiday destination such as Spain, where they can find accommodation at the most high-end and luxury hotel in San Sebastian, in the north of Spain.
Boom is the opposite of the recession, boom is when employment of a country is high, confidence is high, GDP is high and spending power is high.
China’s citizens have a lot more money to spend due to the fact that the rate of unemployment is low, and this is precisely what is allowing them to travel more and to invest in tourism and holiday trips. In China, the unemployment rate is at 4.1%, in addition to this china’s population is very high and is at 1.3 billion this means that around 45 million people are unemployed which is an insignificant figure due to the high population.
Also china’s middle class citizens stands at 500 million, this means a good fraction of the population have high spending power and would be most likely to purchase in stores such as Tesco. This also means, as discussed, they have an increased spending power to invest in overseas holidays and travelling, as compared to the previous generations in the country.
During China’s Boom businesses like Tesco excel in their sales and profit because the public has higher spending power which means that the changes of the price in products would not bother them, in fact Tesco usually lowers the pricing of their products so the public would be willing to spend more.
Although Tesco prices may seem cheap the raw material are brought for even cheaper in bulk, the business makes sure they have make enough from the price of product to cover all the costs and expenses as well as the ability to make profit.
In this current state of economy businesses such as Tesco would have obtained high confidence would be looking to expand by creating more stores in the country and possibly create some in other countries that are currently in Boom. They would have obtained high confidence would be looking to expand by creating more stores in the country and possibly create some in other countries that are currently in Boom.
There has been rapid increase for demand of processed food in China, this can be very profitable for Tesco because that is one of the items they specialise in, they also have tailored the processed foods depending on countries, for example China processed meals would most likely include fried rice, sushi, rice cakes and other traditional foods from china.
