This week in the news, Brazilian online shoppers are drawn to AliExpress, slow and steady wins the race for luxury brands in China, Hong Kong’s designers are moving from huate couture to ready-to-wear, Accor opens two luxury hotels in Xining, and Chinese tourists are the second-biggest spenders in the United States.
Despite the language barrier, long shipping times, and payment inconveniences, more and more Brazilians have been drawn to AliExpress due to the high cost of many items in Brazil. Even with import duties, which is higher than 60 percent, many products, including clothes and luggage, are cheaper on AliExpress by up to two-thirds. On last year’s Singles Day sale on November 11th, Brazilian spending on Alibaba’s websites was second only to that of the Russians. In volume, Chinese firms accounted for 55 percent of all Brazilian online shopping for a total of $2.1 billion last year, according to E-Bit.
Due to the complexity of the Chinese retail market, international brands looking to sell in China must be patient and do their due diligence if they hope to have success in the country, according to a report by CR Retail. Though companies often blame China’s anti-consumption measures for poor sales, it is more likely that a lack of understanding of the Chinese market is to blame. Despite the luxury spending slowdown in China, luxury brands would be wise heed the words of CR Retail’s report. According to A.T. Kearney, China’s retail market is expected to double the value of the U.S. retail market by 2022, reaching a total value of $8 trillion.
Since the rise of Hong Kong’s haute couture industry in the 1990s, it has faced challenges from cheaper mainland imports and western luxury brands, increasing rents, and now, the rise of online shopping. Many designers in Hong Kong’s old-guard of haute couturiers have evolved to keep up with the times. Arthur Lam has released a ready-to-wear line targeted at the mainland, and Cecilia Yau has opened a store at PMQ featuring her off-the-rack collection. Barney Cheng has gone even further afield, releasing a diamond jewelry collection. Young fashion designers are following suit, moving toward ready-to-wear, demi-couture, and others.
Accor has launched two new hotels in Xining, which includes the opening of the first Sebel brand hotel in China. Both hotels, Sofitel Xining and Sebel Xining, occupy a new luxury mixed-used development, the Xining Xin Hua Lian City Complex, which also houses a high-end shopping center, office buildings, and residential towers. The Sebel Xining will feature 197 apartment-style rooms, each with a kitchen and separate living area, whereas the Sofitel will add 492 luxury hotel rooms. The buildings will share many facilities, including 2,500 square meters of meeting space, an indoor pool, a gym and spa, and three restaurants.
According to the 2014 International Visitation to the United States Report, released by the U.S. National Travel and Tourism Office, approximately 2.2 million Chinese visited the United States last year, spending $2.3 billion in total. Spending rose 18 percent compared to 2013, reaching $140 billion in 2014. The Chinese Luxury Traveler 2015 by Hurun Report and ILTM Asia found that 65 percent of China’s outbound tourists are high-net-worth “super travelers,” and their second-favorite destination for the last three years in a row has been the United States. What’s more, these “super travelers” increased their travel days from 18 to 20 days on average within the past year.
image credit: accor