This week in the news, California malls are wooing Chinese travelers from lower-tier cities, China’s First Lady Peng Liyuan is attracting attention for Chinese brands, China’s airlines are soaring due to the tourist boom, Chengdu is the darling of luxury retailers, and Jo Malone will debut in Beijing.
Shopping malls in southern California are going to great lengths to accommodate an important new clientele: tourists from China. According to the Los Angeles Tourism and Convention Board, Los Angeles had 570,000 Chinese visitors last year — double the number from three years ago and 20 percent more than in 2012. They are also big spenders, with Chinese tourists in California spending an average of $2,472 per person on each trip, according to Visit California. While Chinese tourists have a history of international shopping, demographics are changing. Many of today’s visitors come from second- or third-tier cities, particularly provincial capitals like Kunming, Xian, and Wuhan.
With abundant media coverage, First Ladies can attract a great deal of attention for brands that advertising dollars can never buy. China’s First Lady Peng Liyuan has been adept at promoting homegrown brands and boosting China’s image. The brands that have received the most attention are Pehchaolin cream, Zhejiang Ruans Pearl Co., ZTE Nubia Z5 Mini smartphone, Yijian school bags, and Exception and Wuyong clothing brands. Ma Ke, the designer of Exception and Wuyong, wants the label to redefine the meaning of luxury, not something defined by Western companies and standards but by timeless elements like “time, water and the human spirit.”
The current boom in China’s international tourism is causing rapid airline expansion. The rising number of Chinese tourists traveling overseas is linked to the country’s emerging middle class, and is projected to double to 200 million travelers each year by 2020. Hong Kong-based Cathay Pacific Airways is a prime example of Chinese tourism’s growing influence. The carrier recently ordered $29 billion of new aircraft to accommodate its huge influx of new travelers. Earlier this month, the airline began to offer daily flights to the New York area, each with approximately 1,500 seats. They also have two daily flights from San Francisco, and will soon have four flights each day from Los Angeles and ten each week from Chicago.
Chengdu, a city of 14 million and the capital of Sichuan Province, has been on retailers’ radar. Providing shopping for at least 250 million people who live in nearby provinces, Chengdu has seen rapid retail expansion in the past few years, and as a result, the Sichaun Province’s gross domestic product increased at an average rate of 13.6 percent between 2008 and 2012. Last year alone, retail sales reached 375 billion yuan (US$61 billion) in the city, and over 200 Fortune 500 companies now have their regional headquarters in Chengdu. The city’s factories also produce 70 percent of Apple’s iPads. It’s no surprise that Forbes listed Chengdu as the fastest growing city in China over the next decade in 2012.
Beauty brand Jo Malone London will make its mainland China debut in April with a counter in the Shin Kong Mitsukoshi department store in Beijing. The retail space will offer consultations, including gifting advice and custom scent creation, as well as hand and arm massages at the “Tasting Bar.” Estée Lauder global president Maureen Case announced plans for a stand-alone store in Beijing, which will open in December. Furthermore, she sees the potential for China to become a top market for the brand internationally, stating, “Forty-seven percent of Chinese women use fragrance already.” Case noted that she could easily foresee opening 50 Jo Malone stores in China over the next few years with a combination of department store retail space and standalone stores.
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