High-end stores from New York’s Fifth Avenue to London’s Bond Street and beyond are marking the year of the horse by hiring Mandarin-speaking staff, offering Chinese-themed merchandise, and featuring cultural presentations—all to attract the world’s largest luxury spenders during China’s biggest festival, which begins January 31.
“Chinese New Year is a chance for brands to draw traffic and establish long-term branding,” says Sage Brennan, CEO of China Luxury Advisers, which helps brands in the Americas and Europe attract Chinese shoppers. Brennan says it has only been during the last few years that stores began paying attention to the holiday, and this year luxury retailers are being especially creative in their pursuit of Chinese shoppers.
Bergdorf Goodman, for example, has set up elaborate window displays for the holiday, featuring items from Dolce & Gabbana, Dior, Tom Ford and Lavin, bathed in red light and flanked by papier-mâché horses. Bergdorf is offering a promotion with UnionPay, a Chinese payment system: Customers who spend $3,000 with a qualifying UnionPay card receive a $300 gift card, while those who spend $10,000 receive a $500 gift card. Bergdorf also has Mandarin-speaking greeters with Chinese name tags, a Chinese-language website, and an account on Weibo, a leading Chinese social network. Meanwhile, Madrid-based El Corte Ingles, Europe’s largest department store, has invited up-and-coming Chinese designers to exhibit their work. “Chinese consumers that we talk to love that kind of thing,” Brennan says.
Bloomingdale’s is expanding its Chinese New Year celebration following a successful campaign in 2013, the first time the store marked the holiday. Several Bloomingdale’s stores across the United States are debuting limited-edition pop up shops curated by the retailer’s fashion office and featuring Chinese-themed items, including a limited-edition reusable “Little Horse Bag”; a Longchamp Year of the Horse bag; a red chinchilla jacket by Carmen Marc Valvo Couture; and additional merchandise from more than two dozen brands.
“Chinese customers, including both tourists as well as Chinese Americans, are an important part of the overall Bloomingdale’s business,” says Tony Spring, Bloomingdale’s president and COO, and newly appointed chairman and CEO, effective February 1, 2014. Shoppers in some stores will be invited to select Chinese red envelopes with prizes such as a bMoney card in denominations of $8, $88, or $888 (eight is a lucky number in Chinese culture). Bloomingdales’ also has 175 Chinese-speaking associates across the country.
Over two-thirds of luxury spending by mainland Chinese was made overseas in 2013, according to the China Luxury Goods Market Study published by the consultancy Bain & Company. Because import duties and other taxes on imported goods in China reach as high as 60 percent, many wealthy Chinese plan shopping trips to destinations including Hong Kong, New York, Paris, London, and Switzerland. China is the number one luxury spender in the world, making up 29 percent of total global luxury spending this year, according to the Bain report. By 2015, Chinese tourists could spend as much as $194 billion a year in Europe, the United States, Asia and other destinations, according to a Morgan Stanley research note last November on luxury companies.
The rate of Chinese visitors to the United States has increased steadily by about 35 percent each year to 1.47 million visits in 2012, according to data from China’s National Tourism Administration (NTA), which predicts that Chinese tourists will become the leading foreign travelers to the United States by 2018. Chinese are predicted to make 100 million trips overseas in 2014, about 10 million more than last year, according to NTA statistics.
New York City is especially poised to benefit from increased Chinese travel, and retailers are eager to cash in. Jeweler Tiffany & Co., which recently said Chinese and European tourists drove sales at its flagship store on New York’s Fifth Avenue, employs Mandarin-speaking staff and has launched a Chinese engagement ring app for smartphones. Saks Fifth Avenue is promoting beauty products during the Lunar New Year holiday, while Macy’s flagship store features a visitor center with Chinese-language material. Barney’s has launched its first-ever Chinese New Year-themed marketing campaign this year, placing advertisements in Chinese magazines. The company is also testing campaigns around UnionPay.
In London, stores are working to broaden their appeal to Chinese shoppers for the Lunar New Year as well. Harrods department store is planning a themed display for the festival, featuring special products and menus designed for the holiday. Other stores on Bond Street are following suit. Last year, Chinese visitors spent 300 million pounds in Britain and the government has relaxed visa rules in an attempt to draw more Chinese tourists and investors.