New trends in Chinese luxury shopping and overseas spending
While visitors expenditure in Europe in April was up 40.4% y-o-y, it paled in comparison to the 93% increase in other regions.
Travel expenditure worldwide surged 50.1% in April, marking a new high since February 2011. Chinese tourists’ overseas spending in April was up 92.4% y-o-y, whereas Russian travelers spent 31.3% less in the same month, according to data from international duty free shopping group Global Blue.
While overseas visitors’ expenditure in Europe in April was up 40.4% y-o-y, it paled in comparison to the 93% increase in other regions. Barclays Bank believes these figures are a strong indication of the contribution of the Chinese middle class to increased consumption in Asia.
Chinese luxury shopping trends
Tourists accounted for 70% of total luxury good sales in Europe.
While Chinese tourists have locked on to leather goods and spending on these items has increased 78.2%, the spending on luxury wristwatches and jewelry is still strong, having increased by 56.6%.
Barclays Bank said: “The data show that the trend of Chinese consumers turning from Hong Kong to Europe for luxury shopping is easing. For example, Cartier’s Hong Kong stores lowered prices by 5% on top of offering discounts, while its parent company Richemont Luxury Group has raised prices in Europe by 7% in the regularly twice-yearly price adjustments. This shows that the prices of hard luxury goods in Europe, China and Hong Kong have already leveled, but there still remains a price gap issue for soft luxury goods.”
Japan becomes new hotspot for Chinese splurging
Japan is enjoying record overseas visitor arrivals in 20 years and tourism has contributed 0.1% to the GDP. This is no small feat in a country endeavoring to pull out of economic doldrums for over a decade.
Tokyo-based Meiji Yasuda Life Insurance Company’s economist Yuichi Kodama said: “Tourism is a way of channeling the growing spending power of the Asian region to Japan. Facing population decline, Japan is hard put to expand domestic demand over the long term.”
Overseas visitors spent up to US$4.6 billion from February to April, according to Japan’s Cabinet Office data.
With the exchange rate of the yen against the dollar depreciated by a third, Chinese tourists are playing an important role in boosting spending in the Asian region.
Spending by Chinese visitors in Japan grew 113% y-o-y as visitor number reached a record of 1.8 million trips in April, according to Japan Tourism Agency data.
Bank of America Merrill Lynch forecasts Japan will receive 174 million Chinese with spending at around US$264 billion by 2019.(Translation by David)