Chinese tourists abroad. Picture courtesy chineseshoppers.wordpress.com/

We learnt last week that Chinese shoppers pulled back on their relentless spending frenzy abroad last month. And today we’ve found out a lot more about why and just what they’re doing.

Global Blue’s latest in-depth analysis of tax-free spending, Globe Shopper Report: China Edition, shows that something happened in March to make Chinese shoppers apply the brakes.

They spent 58% more on duty-free goods abroad last year, then 11% more in January and 5% more in February. The growth was already slowing, therefore, when March went into reverse with a 24% fall.

The reasons? Tough comparisons with March 2015 when sales had risen 122% due to Chinese New Year falling during the month, and fears over terrorist attacks in Europe. Visa issues also played a part.

But it’s not all doom and gloom, especially given the way Chinese New Year skewed the figures. And Global Blue said May and October will be big opportunities to grab the Chinese shopper because of holidays linked to Labour Day (May 1-4) and Golden Week (October 1-7).

May is expected to offer a bonanza for Europe, Japan and South Korea, while October will boost Asia-Pacific destinations like Australia and Singapore.

Favourite places

Paris shopping

UK retailers have more to worry about than some after the March spending fall as spending there dropped a massive 30% during the month and the Chinese said they prefer to shop in France. Is the UK so unappealing? Maybe it’s the weather, or the fact that the euro being so weak makes other countries much cheaper than drizzly London.

Global Blue said 41% of regular Chinese travellers planning a holiday this year intend to visit Europe with 16% favouring France, 8% Germany and only 6% Italy or the UK.

But Asia is the key place to go with 73% of Chinese travellers planning to stay within that continent. 26% will go to South Korea and 23% to Japan.

Those figures matter because, despite Chinese shoppers reining-in their spending, they’re still the highest-spending group overall. They account for a third of sales globally as shopping is a key focus for travellers, more so than for travellers from some other countries.

As many as 81% of those planning international travel in 2016 will shop during while they’re out and about with an average shopping budget of €3,544 per trip to Europe and €2,517 to Asia.

How to come out on top

Harrods offers Union Pay to please Chinese Shoppers

Global Blue said retailers must focus on value and convenience to attract Chinese global shoppers this year and make sure they give them what they want.

So what do Chinese shoppers look for in a good shopping destination? Well, 35% of regular Chinese travellers who shop abroad want a good selection of malls or retail parks, 33% look for famous international brand stores, and 31% want lower prices than they’ll find at home.

The research also said the top five services that should be offered by retailers are tax-free shopping (65%); ability to pay with China Union Pay (55%); ability to pay in China’s own currency (46%); staff who speak the customer’s language (39%); and wifi in-store (26%).