What Will Happen When Chinese Shoppers Return To Boost International Luxury Retail?

    Global Blue and Gusto Collective’s report predicts that 76 percent of Chinese luxury shoppers are willing to travel internationally in 2023.
    Global Blue and Gusto Collective’s report predicts that 76 percent of Chinese luxury shoppers are willing to travel internationally in 2023. Photo: Shutterstock
      Published   in Consumer

    to TraWhat happened

    Chinese luxury shoppers are ready to reconnect with the world, with 76 percent of those surveyed willing to travel internationally in 2023, according to a new report by Global Blue and branding, communications and tech outfit Gusto Collective.

    But while there’s much pent-up demand for luxury goods shopping in global destinations, the main obstacle remaining is the air capacity from China — currently, this is running at 22 percent of 2019's flight capacity. It will take a few months for outbound international flight routes to recover as airlines and authorities ramp up capabilities.

    Willingness to Travel
    Willingness to Travel

    The Jing Take

    These predictions offer hope to the world’s prime shopping destinations, once frequented and supported by mainland Chinese shoppers. Pre-COVID, they were the leading tax-free shoppers globally in 2019, accounting for a total of 4.25 million shoppers who spent “an average of €1,600 per shopper vs. €950 for other nationalities,” Global Blue reports. In 2019, Chinese travelers spent €6.7 billion on tax-free shopping, representing 33 percent of the total in-store sales.

    As for the most desired destinations by Chinese shoppers, France ranks the highest for Europe while Japan takes the top spot for the Asia Pacific, the report reveals.

    While some things seemed to have stayed constant, the patterns, values and motivations of Chinese consumers have most certainly changed. Optimistic, hyper-connected, savvy young shoppers will now lead the way. Though many still desire western luxury, Chinese pride and the “guochao” trends have increased their appreciation of their own heritage, aesthetics, and brands.

    Given that luxury goods can be 15-45 percent more expensive in mainland China than elsewhere, duty-free shopping remains a huge incentive. However, it also means that in the past three years, very important customers (VICs) and high-net-worth individuals (HNWIs) in China have been crucial in keeping the luxury industry afloat by purchasing luxury goods domestically with higher prices. The key role they play is unlikely to let up.

    Ultimately, Chinese travelers are hungry for newness, and their expectations for experiences and seamless integration are high.“China’s retail and digital landscape have continued to evolve and transform in a truly unique and innovative ecosystem," says Chloe Reuter, founding partner and vice chair of Gusto Collective. "For brands, reconnecting with Chinese consumers requires an in-depth understanding of what motivates and engages them.”

    The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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