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World’s most influential shoppers

21When Ling Zhang, a 36-year-old engineer visited Europe for the first time she did not hesitate to make Paris her first stop.
“All my friends told me it was a ‘must-stop.’ They told me it was romantic, beautiful, full of elegant people,” she said, adding she will definitely return in the next five years.
France’s capital is China’s new favourite holiday destination. Between 600,000 and 800,000 Chinese tourists visited Paris in 2014, an increase of nearly 20% on the previous year. The Paris region tourist board is confident this trend will continue.
Even the recent devaluation of the Chinese currency looks unlikely to dent the Chinese passion for luxury shopping. While economists agonise over deceleration of growth, retail analysts aren’t convinced it will have a significant or immediate impact on the buying trend.
BNP Paribas group chief economist William de Vijlder draws a distinction between the super-wealthy, and other Chinese tourists in Paris. He said that although the latter will be more impacted by stock market declines in China, “at this level it won’t make a dent in their spending patterns.”
de Vijlder added that once “people decide to travel they have already looked at the numbers, they don’t then pause in front of a luxury shop considering which purse to buy, or not to buy.”
Paris is really rolling out the red carpet for its shopaholic visitors. The city as a whole has stepped up the charm offensive with hotel discounts; shopping experiences; Mandarin-language mobile phone applications and luxury products catered to Asian tastes from skin whitening creams to limited edition handbags and Cognac, some specifically launched during Chinese New Year.
To improve communication with Chinese tourists, the tourist board has recently published a booklet called Do you speak tourist for taxi drivers, hotels and restaurants with advice on how to be more welcoming.
Born to shop
What makes the Chinese traveller so worth accommodating in particular is their deep love of luxury shopping, from watches to leather goods and fashion.
And it’s taken very seriously, planned like a strategic operation. “I recall the first time I went to Paris, our group spent more than eight hours in shopping malls, including Galleries Lafayette,” said Wang Wei, 37, who visited in 2006 with a tour group and has since returned four times. “Chinese tourists look online, compare prices, see what products have not come out in China yet. They know exactly what they want to buy”.
The Comite Regional du Tourisme estimates that on average a Chinese tourist spends roughly 1100 euros per trip, more than any other nationality, the only other that comes close are the Russians, who spend around 1076 euros per person.
“It’s compulsory for them to come back with gifts made in France. A Chanel bag bought in Paris is just not the same as if it was bought in Beijing,” said Francois Navarro, the managing director of Comite Regional du Tourism.
Other incentives for Chinese travellers to spend more overseas, include lower sales tax, favourable exchange rates and the certainty that the product they’re buying is authentic.
Visitors can reclaim value added tax (VAT) back after leaving European Union countries. And, as luxury products are heavily taxed in China (with levies such as a consumption tax between 5-20% and import tariffs that can reach an eye-watering180%) this means some luxury goods can be up to half-price in Europe.
Chinese tourists currently account for a staggering 40% of all luxury sales in France, according to an HSBC report published in February, so many of Paris’ retailers will continue to do whatever it takes to draw them in.
The “grands magasins” – the equivalent of Harrods in London or Bloomingdales in New York – as well as the shops on the Champs Elysees, plus the luxury boutiques and jewellers around Place Vendome are all using a number of subtle and not so subtle tactics to cater to Chinese shopping whims.
They provide free wi-fi; Mandarin-speaking staff; VIP lounges and dedicated express shopping lanes. The space is reserved specifically for tourists and the lanes are decked with a selection of Chinese shoppers’ favourites. Often Chinese tourists are in Paris just a day and half which leaves little time to walk idly through the vast shopping malls.
“All Chinese clients are personally welcomed by a hostess speaking Chinese. Shopping items are delivered to their hotel directly. We continuously adapt so that their shopping experience is tailored to their needs,” said Marie Bart, deputy director of relations with clients of the Bon Marche, a high-end department store in the seventh arrondissement of Paris.
Their typical Chinese client is a high-net-worth individual who does not hesitate to splurge on niche French luxury brands such as Roger Vivier shoes or bags and accessories from Moyna, which are harder to find in China.
Bon Marche has created a VIP de-tax bureau, where certain shoppers can have VAT reimbursed on-site in a dedicated lounge. The store even offers extended hours in the in-house restaurant which allows continuous service for jet-lagged shoppers who need to refuel.
Similar perks are offered at Paris’ other big department stores such as Le Printemps or the Galleries Lafayette, (the latter is still considered the holy grail for the first-time visitor). According to consultant, 3E, Chinese tourists now represent more than 30% of the Galleries Lafayette’s total revenues. Galleries Lafayette declined to comment.
High-speed shopping lanes?
The months following Christmas and January sales used to be a slow time for Paris. Not anymore. During Chinese New Year, Galleries welcomes as many as 100 busloads of Chinese tourists a day. That’s potentially 4,000 tourists walking through their doors daily.
Treated as VIPs, they’re ushered through their own private entrance and offered a personal assistant. The shop is thought to pay some commission to the agent that accompanies these tourists but it declined to comment.
“These shops are going towards a model where shopping space is more and more segmented and efficient. There are the shopping tills for the first-time tourist which only has an allocated amount of time and a shopping list to go through, and the VIP lounge for the more wealthy consumer that does not want to mix with the crowd”, said Erwan Rambourg, head of consumer and retail equity research at HSBC and author of The Bling Dynasty.
The way these mega-brands show off their new products has also changed over the past five years, driven largely by Chinese buyers. These clients can now see the same items in shop windows in Paris, Beijing and Shanghai.
“Paris stores are selling very little to locals, and as travel restrictions [from China] ease, I believe this will only go one way,” Rambourg said.
He is confident the recent market volatility will have little impact on the trend. “A weaker currency obviously will have an influence on the propensity to buy from Chinese tourists, but not much at the current levels… as a less than 5% drop is likely to have a negligible impact given how much cheaper and how much more exciting Paris will seem to the Chinese traveller,” Rambourg added.
Some stores saw the Chinese takeover coming. A controversial redevelopment of closed department store, La Samaritaine, purchased by luxury holding LVMH (which owns Louis Vuitton), was proposed several years ago but has been mired for years in a planning dispute.
The business had planned a major renovation project to create France’s first downtown, luxury, duty free store complex with Chinese tourists in mind, as well as a palatial hotel. But this long-delayed 470 million euro ($559 million) makeover has ruffled feathers and remains on hold, at least for now. Source: BBC