Chinese New Year 2016: Social media millennials are good news for UK

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Chinese New Year 2016, courtesy Selfridges

Will the Chinese economic slowdown at home translate into slower spending among Chinese shoppers abroad? That’s a question lots of companies (especially in the luxury space in the UK) are asking. And the answer? Well the indications are good, according to the retail tourism intelligence specialists at Global Blue. Spending is expected to hold up well this year and Chinese New Year from February 8-14 will be the first test of this.

With predictions for domestic consumer spending being pretty tepid, retailers are getting ready to welcome Chinese spenders next week with special products, promotions and social media initiatives.

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Burberry, Chinese New Year 2016

Chinese tourist spend: The background

The evidence suggests their preparation should pay off. Global Blue said the Chinese are still happily travelling despite the weaker domestic economy and Western Europe is a key destination. The weak euro is an obvious factor in this, but the UK isn’t missing out. It needs to work hard to compete given the strength of the pound, but a newly liberal visa process and the pound weakening slightly this year mean it’s getting a boost.

And the market the UK (and every other developed economy) is targeting is well worth the effort. Market research firm GfK said 109m Chinese travelled abroad in 2015, despite slower economic growth in China that might have been expected to dent their disposable incomes. That was 9m more people than 2014 and the growth is expected to continue. In fact, by 2020 the figure is set to rise to over 200m.

Does that mean everything in the garden’s rosy? Not completely. The Global Blue Tax Free Spend Index 2015 revealed spending by Chinese shoppers in the UK slowed to just a 1% year-on-year increase in 2015, so growth may be guaranteed but it needs to be fought for.

Yet that’s really the extent of the ‘bad’ news. China stayed as the top international tax-free spending nation for the UK last year overall, with 24% of total spend. And individuals spent a hefty £742 per transaction.

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Fendi, Chinese New Year 2016

Chinese shoppers: Who, what, where

Back with Chinese New Year, Chinese spend in the UK rose 72% year-on-year in 2015, to which I have to say wow! We can’t be sure we’ll see that kind of growth this time. But is there anything we can be sure of? Maybe not. The Chinese consumer is evolving and the old idea of Chinese shoppers focusing on a) heritage, and b) ‘bling’, is perhaps outdated, experts say.

According to analysts at China Luxury Advisors, most Chinese travellers are now social media-savvy millennials. Yes, they have an appetite for luxury goods and experiences, but their focus is often on affordable luxury.

And their focus is on social media too, something luxury brands don’t all seem to quite ‘get’ just yet. Kim Urbaniak, Marketing Manager of Global Blue, said: “Luxury brands shouldn’t underestimate the fast changing behaviours and preferences of millennial travellers. UK luxury brands can look to social media to maximise engagement around Chinese New Year. Sharing on social media and partnering with key online influencers is central to any overseas travel experience for young Chinese travellers and an opportunity that luxury brands are yet to fully leverage.” 

One thing that is fairly certain is where much of the shopping activity will happen. London is the key destination and apparently the hotspot for Chinese consumers in London is Mayfair, Piccadilly and St James’s, an area that’s home to two-thirds of the world’s top 100 luxury brands.

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Chinese New Year 2016, courtesy Global Blue

Mark Henderson, Chairman of London Luxury Quarter, the initiative representing the businesses across the area, said: “Luxury brands are re-examining how they engage with Chinese consumers to maximise the potential of this core group. On-territory marketing, translated marketing materials, Mandarin-speaking staff as well as culturally relevant experiences in-store are now basic requirements to accommodate this powerful market.”

Brand activity

So what are brands doing specifically this Chinese New Year?

  • With social media in mind, Burberry is launching a WeChat app to for the two weeks over the Lunar New Year holiday and Agnès B has also taken to social media by signing up to the Chinese shopping app, Findiea aimed at luxury retailers. Chinese shoppers and Findiea users get 10% back on their shopping for the period. 
  • Vivienne Westwood has launched a Year of the Monkey necklace, Alexander McQueen and Amanda Wakeley have launched limited edition scarves, and Mulberry, Stella McCartney and Jimmy Choo are offering traditional Chinese red envelopes as gifts to shoppers who purchase.
  • Harrods is launching a competition on leading social media channel Weibo during the week of Chinese New Year in collaboration with HereinUK. Followers will be asked repost an edit of their Chinese New Year gift inspirations to receive a variety of gifts, including a 1oz Gold Bullion in the Lunar edition, in celebration of the Year of Monkey.
  • Selfridges will have Chinese New Year gift cards, fortune cookies, upmarket GWP personalised fans, special leatherwoods embossing, live musical and dance performances, and special Chinese New Year collections from a number of brands, including Fendi and Karen Millen.
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Chinese New Year 2016, courtesy Global Blue

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