It has been well over two years since Chinese visitors flocked to Europe and buoyed its high street and luxury retailers. Since early 2020, China’s government rarely let anyone out or into its country. Well into the second half of 2022 not much has changed in terms of Chinese visitor numbers. The Financial Times reported Chinese tourism will not return to pre-Covid levels until 2025.
A shift in spending power and the retail industry’s response to having a more localised mindset, means Chinese buyers are not expected to regain the dominant force on high streets they had in 2019. According to Pymnts, Shoppers are anticipated to spend more in their home market and luxury brands are increasing their China presence with new activations and regions such as second and third-tier cities.
Pre-Covid, Chinese shoppers used to purchase their luxury goods in Europe and the US, where tax-free shopping meant the prices were lower than in China, where retail markups are higher do to import duties. Yet Europe is missing Chinese visitors.
By region, Chinese tourists are the highest per-capita luxury spenders among all travelers, accounting for two-thirds of the luxury sales in Europe from 2015 until Covid, according to figures from Bain & Company. The data echoes that of duty free Global Blue and VisitBritain, which said in the UK visitors from China make up just 5 percent of non-EU visitors but 32 percent of all tax-free shopping.
Foreign visitors require less effort by retailers to make the sale, who the FT says are predetermined in their shopping requirements having a shorter window to make purchases before returning home. Locals, by comparison, can shop for price deals, and purchase over several store visits, having the possibility to come back.
While China continues to suspend entry of foreign nationals into the People’s Republic of China, Europe responds with reciprocity.
Louis Vuitton store in Milan at Via Montenapoleone
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