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Are retailers ready to reap the rewards of Golden Week?

Are retailers ready to reap the rewards of Golden Week?



In 2016 Chinese tourists spent $99.6 billion globally during Golden Week, with this figure forecast to rise this year.

5th October 2017.

 

In 2016 Chinese tourists spent $99.6 billion globally during Golden Week, with this figure forecast to rise this year.

Record numbers of Chinese tourists continue to arrive to shop in the UK ahead of the Golden Week (1st – 8th October) public holiday period, according to analysis by Premier Tax Free, the tax free shopping company.

Approximately six million Chinese tourists will travel abroad this year for Golden Week thanks to this year’s holiday dates falling in such a way that they can use the weekend to travel for longer and further –prompting many more to choose a long-haul journey to Europe.

 

As demonstrated in the latest Premier Vision report, Chinese tourists make up a significant proportion of tax free shopping across all of the top five European countries, with France (21%), the UK (30%), Italy (35%) and Spain (41%) already all reporting noteworthy year-on-year increases in tax free sales in 2017.

 

For many, the appeal of iconic destinations London and Paris coupled with luxury shopping are a key reason to travel. According to recent research from Premier Tax Free, of those Chinese tourists planning to visit Europe in the next six months, 19% plan to visit Paris and 15% are headed to London.

 

The data shows the majority (60%) of Chinese tourists arriving in the UK head to London’s most famous shopping streets to purchase their luxury goods, while one in five (20%) head to Bicester Village. Regent Street is the most popular destination in London, followed by Bond Street and Oxford Street. Edinburgh, Manchester, Glasgow and Birmingham are next in the queue, demonstrating that retailers across all major cities should see a boost in revenues. In France, Paris, Serris and Cannes top of the table, with Milan, Rome, Florence and Venice being the cities of choice for Chinese tourists in Italy.

 

Premier Tax Free CEO Patrick Waldron said: “ Next week’s significant influx of Chinese tourists is a massive opportunity for retailers given that all the indications are that domestic sales have been lagging behind expectations. Chinese tourists in particular enjoy European luxury brands and their associated heritage. Providing these products and delivering a seamless shopping experience will help retailers boost sales.”

 

New research from Premier Tax Free provides insights that retailers can use to inform their Golden Week plans to capitalise on this opportunity:

 

Chinese tourists are tech savvy – The vast majority use the internet to plan ahead for their trips abroad (85%). One in every two Chinese tourists will use an online travel agent and 35% book their overseas trips with Ctrip and also use them to research their destinations and work out where to shop in advance. We are also seeing an expansion in payment and VAT refund methods used by Chinese tourists with Union Pay, Alipay and WeChatPay challenging traditional credit card providers for market share. Retailers offering a wide range of payment and refund methods will be more successful.

 

Balance value and the experience – Chinese tourists allocate most of their holiday budget to shopping (27%) and continue to demonstrate a love of luxury in their transaction behaviour. However, Premier Tax Free’s research reveals although they spend a lot in a short space of time, they remain cost conscious and look for variety in product ranges.

 

Heritage, authenticity and quality are very important, Chinese tourists are often concerned about the provenance of the goods the seek to buy and have clear associations of certain products and destinations. For example, they associate the UK with high street clothing offer, while Italy is the destination of choice for handbags and luggage and France for luxury clothing. A retailer demonstrating cultural awareness is also crucial and our research shows that the availability of Chinese speaking staff is a motivation to spend more when abroad.

 

Provide tax free shopping services – New research data from Premier Tax Free shows that 84% of Chinese tourists use tax free services and 72% say it encourages them to spend more. Providing these services will help retailers to capitalise on the revenue opportunities that the Chinese market provides.

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