Luxury Shopping Tours Gain Popularity

on June 29 2010 | in Lifestyle Trends | by | with 2 Comments

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Are affluent Chinese consumers willing to travel just to shop?

It appears the biggest spenders, generally from tier 1 cities like Shanghai and Beijing, will go directly to Paris, NYC or Geneva to buy luxury goods. Many luxury buyers also flock to Hong Kong, the shopping mecca that’s much closer to home. Going abroad (including H.K.) makes sense because of high Chinese import taxes on luxury goods, better selections, authentic goods, and better customer service. Of course, there is the prestige factor or the bragging right that you purchased your LV handbag from Paris.

In France, Chinese tourists surpassed all other nationalities as the biggest shoppers according to a recent French government survey. As a result, French travel companies are developing more shopping programs for the Chinese.

More Chinese are traveling abroad for business and for leisure, a result of the economic boom, growth in personal wealth and ease of travel restrictions. Even with the recent global recession, the Chinese tourists traveling abroad rose 5% in 2009 to 42.2 million from 7 million in 2001. Their total spending jumped 16% to $42 billion in 2009 from 2008. While the majority travel to Hong Kong and Macao, their growing presence is seen around the world. Analysts considered the rapid emergence of Chinese tourists as the most significant thing occurring in global tourism for a generation.

“Before 2003, the only destinations outside the Asia-Pacific area to which the Chinese government allowed its citizens to travel for leisure were Turkey and Egypt. Since then, Beijing has approved almost 100 countries as tourism destinations. The US was approved in June 2008 but only for citizens in a handful of China’s largest and most prosperous areas.”

According to surveys, the favorite activity of Chinese tourists is shopping and they like traveling in tour groups. Most are not concerned where they stay and prefer to save on accommodation so they can spend more on goods. “This is partly a cultural thing – I’m absolutely expected to bring back gifts for family and friends when I go abroad – but it is also because things like Hermès bags are just not available or are much more expensive in China,” says Yvonne Du, a young professional who regularly goes on shopping trips to the US and Europe.

Reinforcing this shopping mentality is the fact that tour operators make more if tourists shop and therefore, they structure their tours packages based on economics. “For now the system is based on commissions earned on the amount of shopping tourists do,” says Guy Rubin, managing partner at Imperial Tours in Beijing. “You have an odd situation where a great many outbound tour operators are breaking even or losing money until you factor in commissions for shopping. That means tours usually have to fit in sightseeing between visits to five shops a day.

Finally, Chinese tourists are relatively newbies to traveling abroad. Newbie travelers tend to concentrate on the tangibles or stuff (remember the Japanese and Koreans) to commemorate their trips while more mature or seasoned travelers focus on the experiential aspects of the destination.
 
[chinesetourists and ft.com]
photo credit: uggboy

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2 Responses to Luxury Shopping Tours Gain Popularity

  1. Paul Zhao says:

    Excellent article. Yes, Luxury shopping is n°1 activity for wealthy Chinese tourists. According to the prestigious Shanghai Travelers’ Club, Rich Chinese tourists prefer to buy in New York, Paris, and in London rather than buying in Shanghai flagship stores. The reason? They suspect luxury brands display “low quality” articles for the Chinese clientele and kep the top quality ones in western shops!

  2. tang says:

    I am intrigued as to know how tour operators get commissions from big retail houses such as Burberry,LV etc. Is it a % of what they buy?

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