LONDON, United Kingdom — It's no secret that new wealth creation in China has helped fuel the growth of the global luxury market in recent years. The Chinese are by far the most important national cohort of luxury consumers, responsible for about 30 percent of all luxury purchases, according to a recent report by Mario Ortelli, a senior luxury goods analyst at Bernstein. For some brands this number is even higher: Burberry (40 percent), Ferragamo (35 percent), Gucci (33 percent) and Bottega Veneta (33 percent).
“[Chinese luxury consumers] are more travelled, more sophisticated, more educated and more digitally exposed [than ever]. And they are young and they want some fun,” says Erwan Rambourg, head of consumer brands at HSBC and author of the book “Bling Dynasty: Why the Reign of the Chinese Luxury Shoppers Has Only Begun.” They are also spending again after a Chinese economic slowdown rattled the luxury sector.
A growing share of Chinese luxury purchases are completed in the domestic market, as pricing and assortment gaps continue to narrow. But Chinese consumers still do three-quarters of their luxury spending while travelling abroad, where luxury goods cost 20 to 30 percent less and come with the added emotional, experiential and storytelling value of buying, say, a Louis Vuitton bag in Paris.
A series of security threats in Europe had curbed tourist spending in the region, but Chinese purchases in key European capitals like Paris and London have bounced back. “[Chinese consumers] are back in Europe and especially in the UK because of Brexit. The new area is Spain — especially Barcelona — but [they are] also back both in Italy and France,” says Federica Levato, luxury goods partner at Bain. “Four years ago, they basically bought everything, big names… Then they evolved very rapidly and now they are more discerning and much more knowledgeable, not only high-end customers but also the middle class, thanks to exposure to social media and content brands are developing.”
BoF spoke with several travelling Chinese shoppers from a range of demographics at luxury shopping meccas in and around London.
Qian Sun, 23, a flight attendant at Tianjin Airlines, Dover Street Market.
“I was searching online for where I could find a Kris Wu Palace jumper. They said it's from Dover Street so that’s why we came here. I’m just browsing around. My budget is 20,000 RMB [$3,013 at current exchange]. My friends went to Bicester but I couldn’t find anything I wanted last time I went there. It's not fashionable. Burberry is cool now and Céline.”
Margaret Zeng, 18, Richard Hao, 15, and Kevin Xu, 14, Chinese students in the 30-person queue outside Supreme.
Margaret Zeng: “We come to London every three months to shop. It's half-term so we came. We’ll go to Harrods, Selfridges, Oxford Street, here [Supreme], Chinatown. Yeah, it's pretty cool.”
Richard Hao: “We’re on holiday, we study in Bristol. It's half-term. We’ve come to London to shop in our holiday,” he says. He has already bought some Commes des Garçons Play x Converse trainers and plans to spend more with a budget of £3,000 ($3,948). On Supreme he says, “The designs are cool, we like the new releases. We come here a lot.”
Shuo Yang, 18, a foreign student studying at the University of Leicester, at Bicester Village with friend Siqi Zhao, 24.
“We came because it's cheap. We’re buying for friends at home and for ourselves — shoes, bags and clothes, mainly Burberry, Prada and Gucci.” Those brands are “beautiful and fashionable.” Shuo describes them as “yangqi” literally meaning foreign quality. “The prices in the UK are very good. We also go to Harrods regularly too.” On “daigou” or buying gifts for friends back at home in China: “It depends on what our friends like, they tell us and we send things to them. They also buy the brands we wear. It's usually handbags we send to our friends.” She has done this daigou transaction a dozen times this year.
Ronald Chow, a retiree from Hong Kong, at Bicester Village shopping with family.
“We have no budget as long as it's good value. We buy from Moncler, Charles Tyrwhitt, Savoy Taylors, Christian Dior [and] Prada. Prada has the most updated items. We think this is one of the best outlets we’ve been to. We’ve been to quite a few in Europe, Spain and France. Every time we come [to the UK] we make a stop here. It is very good value. We spent £4,000 in Prada yesterday. It's very good for my son, he loves coming here to buy all his business clothes.” Chow says he is spending two days of an 11-day trip in the UK at Bicester, his fifth visit to the village this year.
Leaf Greener, 35, a fashion journalist from Shanghai, at Bicester Village.
“It's my first time here. Each brand has its own identity and personality when you shop here, you don’t feel like it has an outlet mentality. For me, luxury shouldn’t be about the discount. It is still luxury here. It's how you present yourself, they keep it very original. I’m going to look at Céline, Christopher Kane (the British designers I know, I really support them) and Prada and Miu Miu, of course. Balenciaga too, but I’m not sure if they have the archives from the Nicolas Ghesquière age.”
Liping Wang, 48, an accountant from China, on Bond Street.
“We’ve come here on a tour group. I don’t care about fashion, I’m here to experience the culture and the education, but my friend at home is very fashion forward. She wants us to buy her a Louis Vuitton bag so we can bring it back for her. I came here to experience the city, to have a look at Cambridge, Oxford and the University of Manchester. We will have a look inside Louis Vuitton.”
Feng Aoran, 26, a student, at Dover Street Market.
“I heard it's a cool shop [and] I wanted to check it out; this is [my] first time here. There was an I.T Beijing Market [DSM’s Chinese outpost] I went to that’s cool and I wanted to check it out here [in the UK]. I’m mostly looking for Commes Des Garçon. When I travel I always shop. It's my favourite pastime.” He plans to spend £1,000 ($1,316) on trousers and a jacket before visiting Supreme in nearby Soho and then going onto Selfridges. “I follow fashion news so I knew to come here. I’m also going to Supreme for hats, I really like streetwear brands.”
Zhu Zhu, 35, a fashion blogger from Guangzhou living in Belgium, at Dover Street Market.
“London is a very fashionable city. I’m here [at Dover Street Market] for Céline. I’ve just discovered this place. I come once or twice a year [to London]. Normally if I buy a designer handbag it's £2,000 or £3,000. I’m not hungry for products because I can get a lot [back home], so when I come I really enjoy special things, mostly at Harrods, Selfridges, Liberty and Bond Street. And now I shop online at Net-A-Porter and Mytheresa.com. Recently, I’m crazy about Scandinavian brands like Acne. [But] Céline is special, it's not online, you can’t get it everywhere.”