Targeting Rich Chinese Tourists: The Challenge for Luxury Brands

The impact of Culture toward Asian rich tourists habits

With the massive success of “Crazy Rich Asian” movie and the online premiere of “Ultra Rich Asian Girls”, a Housewives-syle reality show broadcasting the lives of four wealthy Chinese-Canadian women. While the reality TV did not reach any records, the show differs in its characters showing off a mix of English and Mandarin. By doing that, the show caters its content specifically for a Chinese audience located both in Canada and in China.

The Chinese have known a big period of migration in direction of Canada. More than 100,000 Chinese millionaires have moved to Vancouver especially, making the real estate market harder than it was. We still wonder if this was beneficial or not for the city of Vancouver.

To get back to the Canadian series produced by Kevin Li, it does not seem to have a great success among the Chinese, but it is definitely a topic of discussion. The Chinese would keep watching it as long as it provokes reactions, whether there are positives or negatives.

Chinese tourists love for luxury goods

Chinese tourists are taking into account their luxury goods budget as part of their travels. As luxury goods are lower-taxed abroad, there is a real opportunity for luxury brands targetting them. It represents a real opportunity: Chinese travelers have spent during their trip to Canada approximately $486 million in 2018. In 2016, they made 29,400 trips in the month of February alone (an increase of 31% from last year). 

Actually, travelers from Mainland China have steadily increased by 366% since 2000, making China one of the top five source countries for incoming tourists! Besides, 82% of the Chinese travelers list shopping as a major element in their travel plans, with a particular interest in apparel, accessories, cosmetics, art, and cars.

 Chinese are the biggest luxury buyers in the world! 

Chinese are the largest consumers of luxury goods worldwide. This comes from the economic boom of China in the last decade, helping the Chinese to get a higher purchasing power, and arousing their interest in luxury goods.  We can find approximately two-thirds of these luxury products bought by Chinese consumers outside of China.

Some reasons can explain this trend: first of all the high import taxes. Chinese have fewer possibilities to buy these products in local retail, as the customs duties make the product totally unaffordable. The fear of getting a counterfeit product is also a reason that can explain this trend, as China is the king in forgeries; this is sometimes difficult to find some genuine products.

It is also a cultural thing, it brings the Chinese to show off their wealth and get some more prestige. Some other reasons can explain why the Chinese are going abroad to buy some luxury goods, like the recent crackdown on corruption, etc… All these reasons said it makes the Chinese tourists a unique opportunity for high-end retailers in markets like Canada.

How can luxury brands leverage this trend?

So we wonder how the local retailers can get some market shares in this situation. And it goes beyond hiring Chinese staff speaking mandarin. Holt Renfrew is thinking far ahead in some different aspects: it implemented the payment through the China Union Pay card.

A similar initiative has been taken by Yorkdale Mall to penetrate this market. Tiffany & Co. in Toronto, partners with Pure Luxury magazine and with tour operators in order to hold shopping events at its Bloor St. store. It’s a smart move, considering many of these tourists often travel in tour groups, due to their language dependency.

Travels and luxury goods budget for Chinese tourists

Sometimes, the purchase decisions for luxury goods can be taken away before they even arrive in Canada, and plan their travel and routes in order to buy these products. They use Chinese travel magazines and branded Weibo pages for global retailers, in order to plan their routes and itinerary for purchasing their products. It is part of the process for them to have more certainty before they travel. It helps them to have fewer doubts and become less stressed by the travel.

The Chinese are known to act consciously and pay attention to details before acting. And reaching this market can therefore require expanding a multicultural strategy with a continuous extension to home country markets. Burberry and Harrod’s in the United Kingdom have done it with great results. There are some similar attempts from the likes of Hudson’s Bay, Pandora, or Swarovski which can lead to new opportunities for these retailers in Canada.

Chinese immigrants are changing

On the home front, it is important to note the profile of Chinese immigrants has also evolved drastically over the past decade. The “Ultra Rich Asian Girls” producer Kevin Li noticed, “Who’s driving those Ferraris and Lamborghinis at 22 years old?” – highlighting the influence of wealthy immigrants from Vancouver to Mainland China.

And while their fellows in Beijing and Shanghai will go to imitate them and purchase luxury goods (including shopping sprees to Hong Kong, or ordering through special retail agents called ‘daigou’), the young and affluent Chinese-Canadian market is equally affined to big-name labels. All that’s remaining is for big-name retailers to return the love with a targeted Chinese-Canadian strategy.

Get to know more the Chinese luxury goods market and habits!

Gentlemen Marketing Agency is specialized in cultural and digital practices for worldwide brands in order to establish their business in China. Our team of passionate and experts about China, its digital trends, and the fashion industry, can help you with various services: Chinese e-commerce platforms, Chinese trends, Chinese social media, distribution, reputation, SEO on Baidu… contact us and discover your opportunities in China!

Read more about luxury in China:

• Digital-Friendly Luxury Brands in China: The Dior x Bilibili Case Study
• Digital Marketing and Luxury in China: it’s possible!
• New Fashion & Luxury Trends to Know Before Launching your Brand in China