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

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.

Chinese shoppers are changing the face of retail

Chinese shoppers Gucci - China Elite FocusWen Zhong, a 28-year-old from Shanghai has already been to France and the Netherlands . He is now flying from Schiphol airport in Amsterdam to his final stop, Finland, where he hopes to see the Northern Lights (“very exclusive”). Mr Wen is typical of a new wave of Chinese tourists: young, affluent and travelling independently, rather than on a “20-cities-in ten-days” bus tour like those that brought his predecessors. Such tours still appeal to most Chinese tourists on their first trip further afield than Hong Kong, Macau or Taiwan. But a third are now organising their own travel, spending more and staying longer in each of their destinations.
Nearly one in ten international tourists worldwide is now Chinese, with 97.3m outward-bound journeys from the country last year, of which around half were for leisure. Chinese tourists spend most in total ($129 billion in 2013, followed by Americans at $86 billion) and per tax-free transaction ($1,130 compared with $494 by Russians). More than 80% say that shopping is vital to their plans, compared with 56% of Middle Eastern tourists and 48% of Russians. They are expected to buy more luxury goods next year while abroad than tourists from all other countries combined.
The dizzying pace of growth is expected to continue. Only around 5% of China’s population now own passports, and most of those who travel go to Hong Kong or Macau. But increased affluence, a trend towards longer holidays, fewer visa conditions and growing numbers of repeat travellers mean that every year more will take foreign trips, and more will venture farther. By 2020 the number of foreign trips made from China will double, predicts Aaron Fischer of CLSA, an investment firm, and spending by Chinese tourists abroad will triple.

Shops, hotels and other tourist businesses are scrambling to profit from the new arrivals. Schiphol, which has direct flights to seven Chinese cities, hands out presents in the arrivals hall around Chinese New Year and has a free translation app to point Chinese travellers to its luxury shops, all of which accept Chinese currency and Union Pay (China’s main credit card). Benno Leeser, the boss of Gassan Diamonds, a Dutch jewellery chain with 14 outlets in the airport, travels to China every year to schmooze with the travel agents who bring him his best customers.

Advertisement Banner Gervois Hotel Rating - May 2017 featuring Pierre GervoisNew destinations are trying to work out how to get themselves on the itinerary. After direct airline connections, the next step is to make getting a visa easier or, better still, to bring in a visa-waiver scheme. In 2013 Chinese citizens could visit just 44 other countries without a pre-arranged visa; Taiwanese citizens could visit 130, and Americans and Britons over 170. In 2010 the European Tour Operators Association found that a quarter of Chinese who had hoped to visit Europe for leisure had abandoned their plans because of visa delays. Britain, which is outside the European Schengen free-travel area, requires its own visa—the main reason it gets just a ninth of the Chinese tourists France does.
America has started to interview Chinese visa-applicants online and allows them to pick up their visas at any of 900 bank branches, rather than the American embassy. It saw a 22% increase in Chinese visitors last year. But places with visa-waiver schemes, like the Maldives, are really thriving: last year the number of Chinese visitors to the islands increased by 45% and reached nearly a third of the 1.1m total. A boom in Chinese honeymoons helps. Beach resorts are also popular with “6+1s”—young couples travelling with one child and two sets of parents. Parents and children do adventure activities; grandparents, who are less likely to speak English, go to evening shows and cannot get lost.

The next step is to tailor language, products and services to the Chinese market. Printemps, a shop in Paris, has a dedicated entrance for Chinese tour groups; Harrods in London has 100 Union Pay terminals scattered throughout the store. Both are recruiting Mandarin-speaking staff and have Chinese-language websites and maps. Hotels increase their appeal by offering Chinese television channels, menus with pictures, and congee (Chinese porridge) for breakfast. Such details are seen as a sign of respect.
Appealing to the new Chinese horde means tapping into their love of a good romantic tale, says John Kester of the UN World Tourism Organisation. Thailand saw the number of Chinese visitors triple after a blockbuster film, “Lost in Thailand”, inspired a generation to come and sample Thai beer. Mauritius is hoping that “Five Minutes to Tomorrow”, a romance due out later this year featuring Liu Shishi, a popular actress, and partly filmed on the island, will bring it a similar bonanza.
Advertisement Tower - Gervois Hotel Rating May 2017 featuring Pierre GervoisThe new generation of Chinese luxury travelers don’t rely anymore on old fashioned Chinese outbound travel agencies: They prefer to carefully select their destination and hotels with the help of specialized luxury travel magazines, such as the Shanghai Travelers’ Club magazine of Luxury Hotels of America, both published by the fast growing publishing company China Elite Focus Magazines. “We opened a new office in New York City last year” said Pierre Gervois, the Publisher. “Our editorial team is based in Shanghai, and our sales office is now in the United States, to be closer to our advertisers, mostly luxury brands who want to use our media portfolio to reach directly independent Chinese travelers”
The toughest step is getting noticed by Chinese would-be travellers, says Frank Budde of the Boston Consulting Group and co-author of “Winning the Next Billion Asian Travellers”. Nearly half of China’s population is now online, and two-thirds of those planning to travel use online material when preparing their itinerary. Since they use different search engines and social-media platforms from everywhere else, success largely depends on being blogged about on these platforms. Here, destinations can make their own luck. Tourism New Zealand’s decision to host the fairy-tale wedding of Yao Chen, an actress with 66m followers on Weibo, China’s equivalent of Twitter, in Queenstown in 2012 was rewarded with 40m posts and comments on discussion forums, 7,000 news articles—and a surge in interest from Chinese lovebirds.

Source: The Economist

China Union Pay cards readers help Chinese shoppers in the UK

Wealthy Chinese tourists with money to spend don’t need an excuse to buy luxury goods, but they do need the plastic to facilitate their purchases. That’s why it wasn’t until Harrod’s installed special Chinese credit card readers in its stores earlier this year that the store could boast it had sold two bottles of £25,000 wine, and one £140,000 diamond to Chinese customers.
The store has seen a 40 percent increase in salesto wealthy Chinese tourists since installing 75 China Union Pay terminals into its London store.
Using data from VAT reclaim forms (UK sales tax can be reclaimed by visiting tourists at the airport), the luxury store has calculated sales to wealthy Chinese have risen to an average of £3,500 per tourist.
China Union Pay card - China Elite FocusAccording to the recent statistics released by the ultra high-end travel club for rich Chinese “Shanghai Travelers’ Club”, 37% of Chinese travelers to the UK are ready to spend more than £54,000, and 12% of them is ready to spend more than £70,000 in London!
The increase is largely due to the fact that Chinese bank cards are not recognised outside of China because they use a separate card processing method via China Union Pay card terminals. According to one Chinese saleslady at Harrods, Chinese tourists visiting from the mainland have to bring “a lot of cash” when they travel abroad because so few places have CUP terminals.
In London, the only other store that has the terminals is Selfridges where sales to Chinese shoppers have seen “double digit growth” since the installation of CUP terminals last June, according to a spokesperson.
Making it easy for Chinese tourists to spend money with their domestic cards seems to be a no-brainer. Looking around the store, small groups of Chinese customers now feature prominently. So too do tour groups, who arrive at the store en masse. Harrods’ Mandarin speaking staff say they handle on average 20 to 30 Chinese visitors a day. During Chinese holidays like New Year in February, and two week-long holidays in May and October, coach parties with up to 70 tourists is standard fare.
Joined by telephone from Hong-Kong, Pierre Gervois, CEO of China Elite Focus declared “Luxury retailers should install China Union Pay readers and hire more Chinese speaking staff” He added “It’s the key to success to increase sales with wealthy Chinese tourists”
One Mandarin-speaking sales assistant told beyondbrics that Hermes is the most popular brand, followed by Chanel, Louis Vuitton and Dior. Speaking about their Chinese clientèle another spokesperson said, “they are some of our most discerning customers.”
On a recent trip to the store, one young Chinese shopper from Chengdu, studying at Manchester University, said Chanel was her favourite brand. Her male companion, who was carrying a giant Chanel carrier bag filled with her purchases, quipped: “It used to be Arabs who were the richest shoppers. Now it is the Chinese, isn’t it? Next, it will be the Indians.”