Luxury retailers hope Chinese new year tourists will leave them crowing

Shoppers at Burberry’s discount outlet in Hackney, east London Photo: Alamy Stock

On an icy weekday afternoon in Hackney, a part of east London not on most tourists’ itinerary, Burberry’s discount outlet store is bustling with tourists from China. There is much buzz around the footwear department, and shoppers are checking out ponyskin handbags at £649 – down from £1,295 – and trench coats discounted to around £900 from nearly £1,300.

As the year of the monkey gives way to the year of the rooster on Saturday, Britain’s retail industry is hoping for more visitors from the world’s second-largest economy. Flight bookings from China to the UK are up 88% on 2016 for the Chinese New Year holiday period, which runs from 18 January to 1 February, according to market research firm ForwardKeys.

Wen Ying, one browser at the Burberry outlet, cites the low pound: “Super brands are cheaper here than in our country because of the value of the pound and because of taxes. The local British brands are very attractive because of the high quality.” While they haven’t bought any Burberry goods yet, she reckons the Loake loafers her partner bought earlier are 30% cheaper than at home.

At a nearby outlet centre, with discount designer goods from Matches, UGG, Anya Hindmarch and Pringle of Scotland, nearly every shop has a Mandarin-speaking assistant and some stores say that up to 70% of their shoppers are visiting from China. Harvey Nichols, the upmarket department store on the other side of London, said that it had Cantonese and Mandarin-speaking staff on hand at its tills to accept China Union Pay, a popular Chinese payment service.

The post-Brexit vote fall in the value of the pound, which has made Britain 11% more affordable for visitors from China, has combined with an easing of the visa system and an increase in the number of direct flights to make the UK a hot destination.

Chinese shoppers are particularly good news for the UK’s retail sector asthey are big spenders, spending an average of £2,174 each during their stay – about three and a half times the average of other visitors.

Patricia Yates, director of tourism at VisitBritain, said the evidence was that the Chinese opt for mid-price accommodation so they can concentrate on acquiring luxury goods, particularly handbags and purses and other personal accessories. Watches and jewellery are also popular.

The New West End Company, which represents retailers on London’s premier shopping districts of Oxford Street and Regent Street, said sales to Chinese shoppers were up 121% year on year in the week ahead of the main holiday period.

“To put this into perspective, domestic and European spend in the same period were up by just 10.2% and 12.6% respectively,” said Jace Tyrrell, chief executive of New West End Company.

Many shops are now catering to these high spenders. Selfridges and Harrods are among a number of retailers now offering Alipay, the Alibaba-spawned payment system which is the most common way to pay for goods in China. Stores are offering Rooster-themed products, Chinese calligraphy or handing out treats in traditional red envelopes.

In general, British brands have been enjoying a boost from tourist spending since last summer’s Brexit vote. This month Burberry said sales in the UK surged by 40% in the final three months of 2016 with Chinese shoppers thought to be a major contributor.

Mark Henderson, chairman of Savile Row taylor Gieves & Hawkes and the London Luxury Quarter which includes St James’s and Bond Street, said retailers in the area were expecting “good double digit” growth this Chinese New Year compared with the last.

Gieves & Hawkes recorded a 35% uplift in sales in December compared with last year and Henderson expected that pace of growth to continue.

“Chinese new year is always good as there are a tremendous number of Chinese students in the UK and their family come over. The dip in the exchange rates made things markedly cheaper than anywhere else for a period until prices adjusted but it’s still 20% lower than in mainland China,” he said.

However, in Hackney one Burberry shop assistant says the outlet is not as busy as several years ago, when coachloads of visitors linked to the Chinese government would turn up. A crackdown on corruption in China has meant limits on luxury spending by such groups.

Experts say the latest wave of Chinese tourists are more sophisticated, travel independently and interested in visiting cultural attractions around the UK as well as doing some shopping.

Helena Beard, a consultant from China Travel Outbound, who advises organisations such as the National Maritime Museum in Greenwich on how to attract Chinese tourists, says: “There is a fast-growing affluent middle class and millenials, many of whom speak English and have a more adventurous spirit than their parents.”

She says luxury goods shopping will still be high on their list but they will also be looking for good quality restaurants, particularly seafood, and cultural attractions from Stonehenge to anything linked to the monarchy or flagged by celebrities on social media.

VisitBritain’s Yates adds that Chinese tourists are more willing to travel around the UK than visitors from other countries and keen to see Scotland, the Lake District or Oxford. Retailers hope places such as Hackney remain high on the list too.


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