Luxury Shopping in the United States: the 2016 big trend for Chinese shoppers

Shanghai Travelers' Club magazine Media Kit 2016The Shanghai Travelers’ Club magazine, the Chinese language publication read by China’s Elite global travelers has disclosed its much anticipated 2016 Editorial calendar yesterday. And clearly, Affluent Chinese shoppers love the United States! According to Pierre Gervois, the New York City based Publisher and Editor-in-Chief of this publication “The new generation of Chinese business travelers have clearly chosen the United States as their strategic country for their business browth. We have seen in the past two years a very strong interest from Chinese corporations – and wealthy Chinese invividuals- to invest in the United States. The more they come to the U.S. for business, the more they tend to come back with their family for a U.S. luxury leisure & shopping experience”

But It’s no more just about luxury shopping: Philanthropy and real estate investment are also hot topics. The January 2016 issue will have “Philanthropy in America” as its main feature. “Many Chinese CEO’s residing in the U.S. are willing to create their own philanthropic foundations in America, as they used to do in China. We’ll publish stories to help them to understand how to create a charity organization with all the necessary partners: banks, wealth management advisors & attorneys” added Pierre Gervois.

Driving a vintage 1960 Cadillac on Road 66 is also part of a true luxury American experience. (You can also rent a brand new Cadillac SUV). The march 2016 issue will feature a “Luxury road trip to America” story. Ralph Lauren ripped Jeans, Louis Vuitton beaten up keepall bag, vintage Rolex, Vincent Peach leather bracelet, a motel with neon signs, this is America.

After the success of the September 2015 men’s fashion issue “The Gentleman Traveler”, The September 2016 issue will also feature a Men’s fashion special edition, with in depth stories about America’s best fashion designers. “Having a tailor made business suit made in USA makes a statement for Chinese global business executives” said Tyron Cutner, the Shanghai Travelers’ Club magazine Men’s Fashion Editor.

“Winter Holidays in the American West” will introduce snow experiences in the American West: Colorado, Nevada or Arizona are beautiful in winter time and very desirable destinations for Chinese frequent travelers to the U.S. who had already visited New York and Los Angeles multiple times and want to experience a truly authentic American Christmas time. A lot of opportunities for U.S. luxury retailers to showcase their products and services to their Chinese customers.

Request the 2016 Editorial Calendar & Media Kit of the Shanghai Travelers’ Club magazine here.

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International retailers waiting for the US$264Billion Chinese spending by 2019

Young Chinese shoppers - China Elite Focus

Book your holiday now, before a wave of 174 million Chinese tourists snap up the best bargains.

Already the most prolific spenders globally, the number of Chinese outbound tourists is tipped to soar further as the millennial generation spreads its wings.

Here are the numbers: 174 million Chinese tourists are tipped to spend $264 billion by 2019 compared with the 109 million who spent $164 billion in 2014, according to a new analysis by Bank of America Merrill Lynch. To put that in perspective, there were just 10 million Chinese outbound tourists in 2000.

How much is $264 billion? It’s about the size of Finland’s economy and bigger than Greece’s.

“China-mania spread globally in the past few years, akin to when the Japanese started travelling some 30 years ago, when the world went into frenzy then, pandering to Japanese customers’ needs,” the analysts wrote. “In our view, this is going to be bigger and will last longer given China’s population of 1.3 billion vs Japan’s population of 127 million.”

Millennials, or 25- to 34- year olds, are expected to make up the bulk of Chinese tourists at 35% of the total, followed by 15- to 24- year olds accounting for around 27%.

“Chinese travelers now massively prefer to shop overseas. Buying a luxury product in Mainland China is seen as “Uncool” and shows that you can’t afford to travel to New York city, Paris or London to buy at the original brand ‘s flagship store” says Pierre Gervois, Publisher of the New York City based Shanghai Travelers’ Club magazine.

Only about 5% of China’s 1.3 billion populace are thought to hold passports, meaning the potential for outbound tourism is vast.Gervois Rating Banner 01

The projected boom could be good news for the global economy. The Chinese are the world’s biggest consumers of luxury goods, with half of that spending done overseas. Chinese visitors to the U.S. have risen more than 10% since 2009, the fastest pace for a destination outside of Asia. Australia, France and Italy are also popular.

Asian markets stand to benefit, with the biggest uptick tipped for Japan, South Korea and Southeast Asia, according to the research led by Billy Ng in Hong Kong.

Source: Chinese tourists Blog / Bloomberg / Bank of America

Japanese Department stores promote their brands to Chinese shoppers

Japan

With the number of Chinese visitors to Japan exceeding 2 million for the first time in 2014, Japanese store operators are racing to China to promote their outlets for prospective tourists to Japan.

Don Quijote Co., the operator of Don Quijote discount stores, which have been a popular destination for Chinese tourists to Japan, opened a liaison office in Beijing on Jan. 8.

While the company has not made marketing efforts in China, its outlets are known among Chinese tourists by word of mouth as stores where they can buy a bundle of electrical appliances, brand fashion items and cosmetics at discount prices.

The liaison office will work with travel agencies in China to promote Don Quijote stores to be included as stops in package tours.

“We will promote our stores by letting people know that we are open until late in the evening for the convenience of tourists who have a limited amount of time,” said a company official in charge of overseas marketing.

Don Quijote also plans to open a special website in February, which will allow foreigners planning to visit Japan to reserve items they plan to buy beforehand.

The number of Chinese visitors to Japan totaled 2.22 million during the January-November period of 2014, up 82 percent from the total number in 2013.

While the soured diplomatic relations between the two countries continue, the rapidly weakening yen in 2014 has made Japan an ideal shopping destination among Chinese overseas travelers.

Also on Jan. 8, major credit card company JCB Co. announced that it will release credit cards in China that provide special services and offerings for users during their visit to Japan.

The holders of the cards will be eligible for courtesy tickets to various sightseeing spots in Japan, free rental of mobile Wi-Fi devices for Internet connection and other special offerings.

The company also provides a free smartphone app for Chinese tourists, which offers sightseeing information in Tokyo.

Among the operators of major department store chains, Isetan Mitsukoshi Ltd. will distribute brochures promoting its stores in Tokyo and Kyoto at its outlet in Shanghai from Jan. 16.

The Shanghai Travelers’ Club magazine will also publish special luxury shopping content about Japan’s premium retail stores to further promote Japan as a leading luxury shopping destination in 2015.

J. Front Retailing Co., the parent company of Daimaru Matsuzakaya Department Stores Co., has also distributed brochures introducing its 10 major outlets in Japan at about 360 travel agent offices across China.

Russia becomes unexpected hot shopping destination for chinese tourists

Chinese tourist in Moscow - China Elite Focus

Russia has become the most attractive shopping destination for Chinese tourists this season, surpassing Japan, South Korea, Thailand and the US, Xinhua news agency has reported.
Russia surpassed other countries in large part due to the devaluation of the ruble, which, together with the white winter, has made the country a “paradise for shopping” destination among Chinese tourists in the traditionally ‘dead’ winter season, RIA Novosti has explained. According to calculations by China’s “Ctrip” travel agency company, prices for Russian goods have fallen by at least 30 percent, turning Russia into what Guangzhou’s Southern Metropolis Daily calls a dark horse for tourism.

Moreover, as Xinhua has explained, travel agencies in Guangzhou, the capital of the southern Chinese province of Guangdong, have reported that the tour packages to Russia for the month of January have been almost completely filled. Guangzhou residents, who have never seen snow at home, have noted that they plan on going to Russia with two purposes in mind: as tourists and as shoppers. While in Russia, many plan to buy items such as mobile phones, brand name clothing and shoes, and cosmetics, items which many Russians had been bringing home from tourist trips to China not so long ago. Chinese tourists can expect to save up to four million yuan by booking trips in the winter months, Xinhua has explained.

Since the beginning of the sharp slide of the Russian currency last month, Chinese tourists were reported to have begun arriving in droves in Russian cities, both in the Far Eastern border areas and Russia’s European half, to take advantage of deals made possibly by the favorable exchange rate. “I have never seen so many Chinese people in Moscow; it feels like I am shopping back home,” an exchange student told Shanghai’s China Business News late last month. Chinese shoppers in cities such as Moscow were said to have focused then on the purchase of luxury brands such as Gucci, Louis Vuitton, Chanel and Cartier, allowing them to avoid steep import taxes on the luxury items at home.

Chinese credit card China Union Pay plans aggressive expansion overseas to better serve Chinese travelers

China Union Pay

UnionPay International announced plans to expand its overseas presence Friday, with the company’s services already available in 148 countries and regions outside mainland China.
Beijinger Yin Nan said her experiences in the South Korea this week were no different from at home. Up to 80% of her spending, such as flight tickets, hotels and shopping, was paid through UnionPay.
“It’s very convenient because I don’t have to worry about exchanging a large amount of local currency,” she said.
“However, I do carry some cash for little souvenirs or street snacks,” she said.

The company already has a heavy presence in South Korea since entering the market in 2005, with more than 10 million UnionPay cards issued in cooperation with local banks.
“South Korea is one of the easiest markets in terms of using the UnionPay card,” the company said in an e-mail interview with Xinhua.

“Apart from Chinese users, an increasing number of people from countries such as Japan and Mongolia and China’s Hong Kong and Macao SARs are using UnionPay cards,” the company said.Gervois Rating Banner 01
In Hong Kong and Macao, almost all ATMs and businesses accept UnionPay cards. Nearly 20 million UnionPay cards have been issued in the two areas as well.
The Asia-Pacific region may be the market stronghold but UnionPay has also become a big international bankcard brand too. In Europe and North America, UnionPay covers most of the tour sites frequented by Chinese travelers.
“With respect to the global trend in the payment sector, we will continue to expand our coverage… meanwhile, we will also improve services so that more foreign nationals adopt our products,” the company said.

According to the Shanghai Travelers’ Club magazine, a travel publication for China’s richest “Even Chinese billionaires use their China Union Pay card to buy million dollars worth of jewelry in Paris or New York”.

Chinese travelers made more than 110 million overseas trips 2014, compared to less than 9 million in 1998.

Mandarin speaking sales associates are not enough to attract Chinese affluent shoppers: A good digital strategy is more efficient.

Chinese tourists- China Elite FocusOver two-thirds of luxury spending by mainland Chinese was made overseas in 2013, an increase from 2012, according to the China Luxury Market Study from consultancy firm Bain & Company released on Monday.
Chinese shoppers often wait for trips abroad, plan shopping sprees to Hong Kong or get friends or specialist “daigou” agencies to bring back luxury items from overseas because they are often cheaper due to China’s high import taxes.
“Sometimes I’ll go to a China store and look online for details about things I’ve liked, or try something on for size I’ve seen online. But when it comes to actually buying it I’ll always get a friend to bring it back from abroad,” said Fang.
China is the number one luxury spender worldwide, making up 29 percent of total global luxury spend this year, according to the Bain report. So Chinese consumers – wherever they may be – are a key battleground for firms from LVMH Moet Hennessy Louis Vuitton SA and Gucci owner Kering Holland NV to trench coat maker Burberry Group PLC , cosmetics giant L’Oreal SA and Cartier watchmaker Compagnie Financiere Richemont SA .
Chinese luxury spending slowed at home in the wake of a crackdown on corruption and shows of wealth, prompting warnings of a sales slowdown from liquor maker Pernod Ricard SA and Volkswagen-owned Bentley Motors and Lamborghini.
Luxury brand store openings dropped significantly in 2013, according to Bain, which estimated China’s luxury market will grow two percent this year versus seven percent a year earlier.

On London’s Bond Street and Fifth Avenue in New York, luxury stores have been getting ready to welcome Chinese shoppers, boosting China know-how ahead of peak seasons such as the week-long Lunar New Year beginning January 31, 2014.
London’s Harrods department store is planning a themed display for the festival, with special products and menus designed for the occasion, it said.
Chinese visitors spent 300 million pounds ($488.34 million) in Britain in 2012, while the British government has relaxed visa rules to attract more people from the world’s second-largest economy.
“Having a strategy for Chinese visitors makes a massive difference. Chinese spending in the UK was up 132 percent in the first half of 2013,” said Jeremy Gordon, London-based director of China Business Services, which helps UK firms target Chinese shoppers.
“That’s obviously going to have a massive impact on your bottom line at a time when overall retail sales are not growing at anything like that rate.”
On Fifth Avenue, jeweler Tiffany & Co said it employs Mandarin-speaking staff. Tiffany has seen strong growth in the China market as the allure of diamonds grows, and said last month that sales at its flagship New York store were driven by Chinese and European tourists.
Around 1.5 million Chinese travelers visited the United States in 2012, a more than five-fold increase from 2005, according to the U.S. Department of Commerce.

“Western luxury brands have now fully understood the necessity to have Mandarin speaking sales associates in their New York and London stores, but it’s not enough. The purchase decision is made well before the trip, when future Chinese travelers are checking their luxury travel magazines on their iPad and luxury lifestyle Weibo pages. The irony of this is even if the sales associates do not speak Mandarin, Chinese shoppers will still buy”  said Pierre Gervois, author of “How U.S. Retail, Travel and Hospitality Industries can attract affluent Chinese tourists”
Saks Fifth Avenue, the department store unit of Hudson’s Bay Co , has a Lunar New Year strategy to focus on beauty products, while the flagship store of Macy’s Inc has a visitor centre with Chinese-language material.
Barneys, meanwhile, is launching its first Lunar New Year-themed marketing campaign in 2014. The department store has increased adverts in Chinese magazines and is testing campaigns around Chinese payment system Union Pay, it said.

Luxury firms are also going online to woo Chinese shoppers. Tiffany has a Chinese engagement ring app while Chanel offers an online make-up “classroom”. Italian fashion house Fendi has held talks on China’s Twitter-like Weibo, while Prada SpA and Christian Dior SA have Chinese videos online.
Luxury travel clubs for wealthy Chinese travelers have also their iPad App: The Shanghai Travelers’ Club has its own App, entirely in Chinese Mandarin, and features articles about US$50M private jets, gold plated hand made laptops, or entire private islands for rent for discerning (and rich) Chinese tourists.
Luxury leather goods firm Coach Inc has a U.S.-focused campaign in Mandarin using popular Chinese social media app WeChat. The app, developed by Tencent Holdings Ltd , has 272 million users worldwide.
Coach tailors some of its U.S. products for Chinese shoppers, a spokeswoman said. Chinese are the fast-growing segment of the firm’s North American tourist sales, which make up a fifth of total sales in the region.
“This trend is going to continue because the Chinese are a lot more integrated in the global economy and really informed, especially about price,” said Bruno Lannes, Shanghai-based partner with Bain and lead author of the luxury market report.
“At the end of the day it comes to the same thing: shoppers will either travel or go online to buy abroad.”