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Chinese are now the largest consumers of luxury in the world, but over 60 percent of their spending happens outside China – and the UK has an opportunity to capture a larger share of the market.
In the afterglow of China’s National Day “golden week” of holiday shopping, George Osborne has announced changes to the visa application process for Chinese coming to the UK, making it a more attractive option.
Chinese are now the largest consumers of luxury in the world, but over 60 percent of their spending happens outside China – and the UK has an opportunity to capture a larger share of the market. The average Chinese visitor to the UK is reported to spend around £8,000, so a significant increase in visitor numbers could represent a windfall for well-prepared British brands.
“The visa reform is a long-awaited step that British industry has been lobbying on for years”, according to Roy Graff, Director of China Edge Ltd., and a China outbound travel specialist. But Graff feels it does not go far enough: “While it can help stimulate more business travel from China by offering priority, 24-hour visa processing (for a fee), I would call for the government to align itself with the Schengen visa application process in the EU, and also offer extended, multiple-entry visas to business travellers and other key groups”.
The changes to the UK visa regime come hot on the heels of changes to China’s own Tourism Law, which came into force on October 1, and regulates how operators manage activities including shopping – and related commissions. Tour operators will have to review and adapt their offers so as to abide this new law, and particularly Article 35, which states: “Travel agencies are prohibited from organizing tourism activities and luring tourists with unreasonably low prices, or getting illegitimate gains such as rebates by arranging shopping or providing tourism services that requires additional payment.”
Chinese tour operators face disruption to their normal business processes, and some traditionally popular destinations, which rely on commission-based shopping, may see a fall-off in visitors While operators seek to adapt to the new reality, there is an added opportunity for the UK to pick up on the existing demand for high-end shopping by leveraging improvements to the visa application process, and by getting brands to better engage and serve Chinese customers.
“There is much more that British luxury brands can do to effectively target, engage and serve the global Chinese consumer”, according to Jeremy Gordon of China Edge. Gordon notes that “few British brands take a strategic and structured approach to the Chinese consumer in the UK, as most have been focused on the country rather than the customer”.
According to Gordon, brands should review their strategy and the relevance of their offering for Chinese visitors, build engagement with outbound tour operators and through Chinese social media, and also enhance in-store services and training.
These issues are hot topics among brands and luxury shopping destinations in London and around the UK, and will be addressed during World Travel Market, in London in November, by China Edge, at their “Engage with Chinese Tourists” seminar on 6 November, at the Getty Gallery in London.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
