With a national plan to grow Chinese tourist spending to 1.32 billion (£1 billion) annually by 2020, the city of London clearly should look at Chinese New Year (the lucky year of the pig) as a key period for drawing big Chinese spenders, particularly to its collection of famous luxury department stores. But are these retailers actually hitting the mark with their Chinese sales strategies?
Based on the website of the high-end department store chain Selfridges & Co., which merely states, “Stay tuned for our Chinese New Year 2019 events, coming soon,” one could be forgiven for thinking that the store -- and perhaps the entire luxury industry in London -- lacks a comprehensive marketing strategy for China’s largest holiday.
(Update: Selfridges notes that, while it had not replied to our initial request for comment, it launched a large menu of CNY events after this story was published. They include “New Years New Beginnings,”a specially commissioned editorial film by Alexandra Leese, exploring the New Year experiences of five London-based Chinese creatives.)
The inside of their flagship London store was slightly more impressive, where they’ve assembled a curated selection of Chinese New Year gift options, ranging from a red Gucci GG Marmont bag for 1,000 (£760) to a red Moschino sweatshirt at 612 (£465). But ironically, and somewhat disappointingly, there wasn’t a pig in sight.
Admittedly, Selfridges seems to be targeting the type of young, fashionable Chinese audience that’s less concerned with kitschy pig cartoons in a marketing campaign than they are the use of Chinese models or contemporary art and culture. According to Marie Tulloch, Inbound Marketing Manager at the Chinese marketing consultancy Emerging Communications, this is a tried and tested China strategy that’s proven to work for brands like Burberry in the past. “The level of marketing and customer experience for Chinese visitors to London during CNY has significantly improved over the last 12 months,” she said, “but this is from a relatively low baseline. Alipay as a footfall driving channel is being used far more widely now, though interestingly, promotions are smaller and less complex than those we witnessed during Golden Week or CNY last year.”
For years, Britain has ridden the wave of booming Chinese tourism, and experts in 2018 were optimistic that Brexit would do little to dent London’s popularity as a go-to shopping destination for China’s international travelers.
A pilot study commissioned by the New West End Company and PwC saw a 27 percent growth in Chinese visitors to London in 2017, with shoppers expected to spend nearly 58 million in the prestigious West End’s shopping area during Chinese New Year in 2018 (compared with 50 million over the same period in 2017). But fast-forward to this year with its slowing China market, and predictions seem to have gone suspiciously quiet. This suggests that the city has some serious work ahead of it in order to reach its £1 billion target in less than a year’s time.
Meanwhile, at one of Selfridge’s key competitors Harrods, the Chinese New Year celebrations appear to be more traditional. Harrods likes to boast that one in every five pounds spent by Chinese visitors in Britain is spent at its store, and as such, Chinese New Year is a key date on their calendar. Earlier this month, Harrods unveiled their dazzling Chinese New Year window displays, featuring shiny red lanterns, dragons, and of course, pigs. And the oinks keep coming inside the store, from a 513 (£390) Lalique crystal sculpture of a pig to the now-infamous Gucci "piggi print" clothing line.
But Chinese New Year at Harrods is not only about the products on offer -- the store is also producing various events to help Chinese tourists celebrate the season. On January 26, La Mer offered personalized gift boxes with lucky red envelopes that were hand-designed with Chinese calligraphy, and on February 1, the store is sponsoring a tasting event where guests can ring in the New Year for £50 a head to taste five varieties of high-end baijiu (a type of Chinese grain liquor), courtesy of the Chinese liquor brand Fen Chiew.
However, according to the Founder of Singing Grass Consultancy, Alicia Liu, offering traditional Chinese experiences won’t be enough to entice tourists to visit London for the holiday. “I advise a range of aspirational luxury brands who wish to connect with an affluent Chinese audience,” she said, “and we’ve noticed that more Chinese tourists are visiting the U.K. during Chinese New Year this year with an appetite for exclusive and sophisticated British cultural experiences. They want to order a Savile Row bespoke suit, visit art galleries, and commission unique furniture made by British Craftsmen.” In short, Liu suggests that Chinese tourists -- like many tourists worldwide -- don’t come to London for what they can get at home.
Harrods has found success with Chinese consumers by staying by staying ahead of the curve with modern Chinese marketing while simultaneously attracting them with their rich tradition of British heritage. For instance, during 2018’s Lunar New Year, Harrods introduced WeChat Pay to help facilitate Chinese travelers’ spending, and now this year, their luxury department store competitor Harvey Nichols is also leaning on WeChat by creating online 'red envelope' vouchers, personalized with the customer’s WeChat information for in-store discount use.
Another high-end department store, Liberty London, is also using WeChat to help harness Chinese tourists’ spending power this year. Their Communications and Marketing Director, Madeleine Macey, told Jing Daily that “celebrating Chinese New Year is the perfect moment to champion our international customer community. Having launched WeChat and Weibo -- after excitingly launching WeChat Pay and Alipay last year for in-store use -- we have worked to create a seamless shopping experience for our Chinese customers.” At Liberty’s, the company is running an in-store CNY promotion -- accessible only via WeChat and Alipay -- that offers £50 off when customers spend £250 or more from February 2 to March 3.
Tulloch believes that London stores are taking important steps to entice China’s tech-minded tourists. “Retailers are getting much more effective at understanding Chinese tourists and what communications or experiences work,” she said, “and in some ways, CNY offerings are more sophisticated than in previous years."
But despite these efforts, it just doesn’t seem like enough for many of the city’s retailers. London-based Chinese student Linda Huang hasn’t noticed any authentic advertising for Chinese New Year, stating that “this is my first year here for Chinese New Year, and I feel like there’s not much around, which is pretty sad. In my opinion, the marketing teams are not looking to actually celebrate Chinese New Year but just to sell unrelated products from a select group of luxury brands. We can see through it.”