Chinese consumers

Luxury market surge driven by Chinese tourist lift

Isaac Mostovicz writes that evidence of a thriving luxury goods market continues with announcement of high profits from Burberry. ...

The high-end luxury market is booming, and emerging market tourists are to thank for this. I have written before about how consumers in emerging markets are helping the luxury market to recover from its worst slump in decades, and also how brands are eyeing up ways to attract Chinese shoppers online.

Now luxury fashion brand Burberry has announced that its annual profits will be at the top end of market expectations, thanks largely to Chinese tourists. The brand, which counts six UK stores as well as concessions in Selfridges, Harrods and Harvey Nichols, posted a 27 percent rise in third-quarter sales to $480 million. Of this, there was a 68 percent revenue growth from Asia Pacific, bringing in £150 million. Last September, the fashion house acquired 50 franchise stores in China, and wants to increase that to 100 over the next five years. In the UK, revenues were lifted by the flow of overseas tourists to London. While the Chinese were the biggest spenders in the Burberry UK shops, they were closely followed by visitors from Russia, the Middle East and Continental Europe. Burberry has a 155-year record of making raincoats and handbags, whose trademark camel, red and black check pattern is synonymous with the image of wealth, tradition and heritage.

Looking towards the future, things look bright. Chief Executive Angela Ahrendts said, “Ongoing initiatives in retail, digital, product development and new markets underpin our confidence in the future.” The brand has plans for a digital store format, that will be unveiled shortly, to attract its customers in China.

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Wealthy Chinese travel West in search of luxury goods

Isaac Mostovicz writes that China's luxe industry continues to evolve rapidly, making it a key player in the Asian luxe industry's future development...


Here’s an interesting story about China’s pursuit of luxury goods. Agence France-Presse (AFP) is reporting that increasingly high numbers of wealthy Chinese people are traveling to luxury capitals such as Paris to purchase goods that are discounted.

I wrote previously that the global economic downturn has caused luxe companies and retailers to put products on discount in order the move product. It appears that the Chinese, who have become more involved in the Asian luxury market, are going where the deals are.

The AFP article offers more detail:

The Chinese bought tax-free goods worth 158 million euros (222.5 million dollars) in France in 2009. That was an increase of 47 percent from the level the previous year, according to Global Refund, a company specialising in tax-free shopping for tourists.

The article also notes that this has been part of a larger, growing trend:

Tax-free shopping by Chinese tourists has been increasing for the last two years, rising by 39 percent in 2007 and 23.3 percent in 2008. They now represent 15 percent of sales and 13 percent of transactions.

More Chinese people are going abroad to buy high-ticket items, which suggests a growth in the number of people who might be considered Theta personalities in China.

Year on year increases in the number of Chinese traveling abroad to do this kind of shopping suggest the figures will continue to grow. What will be interesting to watch is the impact this has on China’s burgeoning luxe market.

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