IADS Exclusive: Chinese tourists are back to Europe. Are you ready?
To the relief of many retailers, Chinese borders reopened in January 2023 after 3 years of closure. While they learnt how to survive during and after the pandemic by addressing local clients and other nationalities, they eagerly waited to see Chinese tourists back in stores, especially in Europe, where they represented 50% of luxury sales before the pandemic, according to Altagamma.
2022 was not bad for continental European retailers: Galeries Lafayette and Printemps in France almost fully recovered to their 2019 levels, while La Rinascente in Italy, Breuninger in Germany and El Corte Inglés in Spain all exceeded either their 2019 sales revenues or profits. This can be attributed to several factors, the strength of the US dollar (an incentive for US tourists to splurge into luxury purchases in Europe), European tourists criss-crossing the continent to spend their Covid-19 savings, the UK decision to scrap VAT relief channelling clients to Paris, Milan and other destinations, among others.
However, these conjunctural factors are not expected to last. In parallel, while the Chinese appetite for luxury has not faded, overseas retailers wonder if they will be able to get a piece of the pie, which is why anxiety about Chinese tourism is mounting. Knowing when exactly they will be back, and what they will be looking for, is key to make sure stores are properly prepared to welcome such customers again.
This article was first released on MindRetail as an op-ed.
IADS provides its members with a weekly in-depth analysis on retail-oriented topics. This is an example of the themes the Association regularly addresses, and the topic of an article from the IADS members-only newsletter date 07 June 2023.
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