Paris Sees affluent Chinese Tourists Inject Life Into High-End Market

While a trip to Paris remains an unlikely dream for most Chinese workers, the growing number of outbound tourists — more of whom are from China’s burgeoning middle class — headed to the French capital has been an instrumental factor in the city’s once-again-booming luxury market. Though tourists from other Asian countries (as well as Americans and Middle Easterners) are again shelling out, Chinese shoppers, who can be seen crowding into high-end boutiques up and down Rue du Faubourg Saint-Honore, have emerged as some of the most motivated buyers. This parallels what we’ve heard coming out of London, where shop owners like Linda Pilkington of Ormonde Jayne tell Jing Daily that the Chinese are currently the biggest luxury spenders, following 18 months of steady growth.

But Paris has arguably benefited more than any other continental European city from the growth in Chinese outbound tourism and the country’s middle class. This trend very much parallels what was seen in previous decades from Japanese and Korean tourists, who first viewed outbound tourism as a glorified shopping spree before seeking out destinations more off the beaten path. As Chadha and Husband’s detailed in their excellent book The Cult of the Luxury Brand: Inside Asia’s Love Affair With Luxury,

Japanese tourist-shoppers first became a noticeable phenomenon in the 1970s and their numbers ballooned to gigantic proportions in the 1980s and 1990s. Europe’s luxury houses sat up and took notice, and started setting up shop in Japan — Gucci opened its first store in Tokyo in 1972 in responds to unprecedented demand from Japanese tourists; ditto for Louis Vuitton, which entered Japan in 1978. Soon the Japanese were not only turning in huge sales at home, but also shopping so maniacally in Europe that they were almost single-handedly supporting sales of luxury goods.

Now history repeats itself. Following the lead of the Japanese, Korean and Hong Kong Chinese tourists who came before them, many mainland Chinese tourists — particularly those who are there more for shopping than adventure — choose Paris as their first overseas destination, mainly because of the supremacy of French luxury brands in the China market. (Although a more favorable exchange rate doesn’t hurt, either.)  French luxury houses like Hermes, Cartier, Chanel and Dior were among the most popular brands for Chinese millionaires, and despite occasional hiccups, Chinese consumers generally favor French luxury goods over those from other countries.

From the National:

Parisians are betting on a new generation of Chinese shoppers willing to pay almost any price for the latest designs and it looks to be paying off. The country has become the “premier growth relay for French luxury Houses”, according to Elisabeth Ponsolle des Portes, the president and chief executive of the Comite Colbert, the French association of luxury goods manufacturers.

The numbers speak for themselves: for French luxury companies, the weight of the Chinese market in their aggregate world sales rose from 4.5 per cent to 8 per cent last year, with no sign of slowing. Still dynamic, the Chinese market continues to be a major source of revenue for Colbert’s members.

This article has been reproduced from the Jing Daily website www.jingdaily.com


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The House of Roosevelt, new U.S. luxury shopping mall and high-end restaurant in Shanghai.

America’s Roosevelt dynasty enjoys long-standing connections with China that continue to this day and the crowning family achievement is the recently opened House of Roosevelt for high-end shopping and dining on the Bund.

“The Roosevelt family has a unique connection with China,” said Tweed Roosevelt, chairman of the Theodore Roosevelt Association, at the opening. He is the great-grandson of US President Theodore Roosevelt and the nephew of President Franklin D. Roosevelt. He is chairman of the MUS Roosevelt China Pacific Fund and the Roosevelt China Investments Corp.

Among the family connections: Theodore Roosevelt’s daughter Alice, as a guest of the Empress Dowager Cixi, was the first Western woman ever to visit the Forbidden City. His wife and two of his sons visited China in the 1920s on a hunting trip. Another family member spent his honeymoon traveling for several months across China, mostly on horseback. Today members of the Roosevelt family continue to be involved in America’s relations with China.

The nine-story House of Roosevelt features a bistro on the first floor, Shanghai’s biggest wine cellar on the second, a members-only club on the third, the Sky Restaurant and Bar on the eighth, and the Rooftop Lounge offering a spectacular view on the ninth. Close to the prestigious Shanghai Travelers’ Club, the House of Roosevelt will soon become the favorite place for an elite of wealthy Chinese. A first taste of U.S. luxury lifestyle before they go on holidays in the U.S….

The European-style building was constructed in the 1920s by Jardine Matheson, once one of the biggest trading companies in the Far East. It was renovated from a deserted office building.

“It didn’t really look promising when I first came here during the SARS period,” recalled Roosevelt, “However, from my perspective, the Bund is just like Fifth Avenue in New York with the river view. I was convinced that one day, it would become the most high-end street in Shanghai.”

Q: Why choose Shanghai for the project?

A: Shanghai is obviously the business center of China, but why we chose Shanghai is somewhat accidental. This building happened to be available, and we saw the potential. We think it would be the perfect location for us to start a brand in China, as the flagship.

Q: What are the building’s highlights?

A: We have created a fusion of old and new. The wine cellar contains more than 2,600 labels and over 20,000 bottles ranging from 65 yuan (US$9.70) to 500,000 yuan (US$74,570).

When I first came to China, the Chinese had no real appreciation of any wine. They didn’t know much about wine. And the local wines weren’t very good.

However, over the years, I could see that the Chinese are learning very quickly about wine. We think it is a good business opportunity. The rooftop lounge is another highlight. It offers a gorgeous view of the Huangpu River.

Q: Will people come all the way to the Bund just to buy a few bottles of wine?

A: The idea is that when people come to the Bund for luxury shopping or fine dining, they might as well visit our wine cellar. Or, if they like the wine they have over dinner at our restaurant, it’s easy for them to come to the wine cellar to bring some bottles home.

I always believe that if you want to make money in business, you either want to be the very high-end or you want to go with the mass market. You don’t want to be in the middle.

I want the House of Roosevelt to be the best, to be on the top. To be the best doesn’t mean that everything has to be super expensive.

We have a superb collection of wines, from the ordinary to the really high-end; and the fact that we have the whole range is what puts us on the top.

Q: Once you planned to bring Saks Fifth Avenue retail stores to China. Are you still working on it?

A: Unfortunately, Saks Fifth Avenue had its financial crisis and its problems. And, like most American retailers, it wasn’t ready to go to China yet because it didn’t really understand the market.
That is why we have switched from the Saks Fifth Avenue project to found the House of Roosevelt — with all the efforts, we’d rather set up a brand of our own.

Chinese investors love London Luxury properties

Naomi Minegishi, 21, a Japanese woman who lived in China for 10 years, recently took a job with the London property broker Felicity J Lord.
Nick Vestey, of Knight Frank in Knightsbridge, at a five-bedroom house he sold to a Chinese investor for more than $26 million. per oanda conversion
Ms. Minegishi was hired not for her experience in real estate sales — she is studying management at a London university — but for her language ability. She is fluent in Mandarin, an increasingly valuable skill in London’s residential real estate market.
With her help, the agency recently sold four three-bedroom apartments in a new development for £320,000, about $500,000, each to a different Chinese buyer and solely on the basis of photos and floor plans. The new construction is close to the Olympic stadium, and the investors are betting that real estate prices will rise before the Games in 2012.
Chinese clients are a dream, Ms. Minegishi said. “They are wealthy, they pay in cash, and they’re looking for good value.”
Chinese citizens require approval from their local authorities to invest more than the equivalent of $50,000 a year overseas. But many wealthy Chinese elude the restrictions with help from trust funds and foreign bank accounts, real estate brokers say.
The London property market might have shown signs of cooling recently, but investors from mainland China and Hong Kong are busier than ever — bidding, for example, on luxury apartments in the fashionable Knightsbridge district down the road from Harrods department store and on new homes near the Canary Wharf financial district.
In some parts of London, mainland Chinese investors have already replaced those from Russia and the Middle East as the busiest real estate buyers with deep pockets, looking for trophy assets and pushing up prices, some brokers say.
Buyers from mainland China are a tiny portion of purchasers of high-end real estate in London, accounting for 5 percent of all purchases by foreigners of London properties valued from £500,000 to £1 million this year. But they are a growing presence. They accounted for less than 1 percent of purchases in that price range last year, according to Savills, a real estate agency.
Europeans still make up the largest portion, Savills says, although it does not break down buyers by country.
Unlike clients from Russia and the Middle East, however, few Chinese buyers are looking for London apartments to live in themselves. A majority of them are seeking investments in a real estate market they perceive as more stable than their own and are planning to receive steady rental income for years, Ms. Minegishi said.
For wealthy Asians, fears that governments may impose more constraints on red-hot local property markets back home have made investments abroad more attractive.
Rapid economic growth and easy credit caused real estate prices in many parts of Asia to rise sharply late last year. In Hong Kong, for example, prices for luxury homes have jumped 45 percent since 2009, according to Savills.

Not surprisingly, the property industry in Britain is adapting to meet the Chinese demand. Brokers are hiring Mandarin speakers like Ms. Minegishi, as well as Cantonese speakers to cater to people from Hong Kong.
Savills organized a seminar in Shanghai in July to teach 100 clients how to buy real estate in London. A rival agency, Hamptons International, opened an office in Hong Kong with four employees about two months ago.
Some London developers, meanwhile, are omitting the number four in new buildings because it is considered unlucky in Chinese culture.
“Most developers in London are including China in their marketing efforts,” said Matthew Tack, a director at Hamptons in London. “They’d be silly not to.”
The increase in transactions highlights a gradual shift in wealth to Asia, including mainland China. Free of the debt levels that still haunt Western households and governments, much of Asia began to recover rapidly from the global economic downturn last year.
And although a large majority of Asians still struggle to make ends meet, the booming growth has catapulted many into the ranks of the wealthy and superwealthy.
In mainland China alone, the number of people with assets worth more than 10 million renminbi, or $1.5 million, rose 6.1 percent, to 875,000, in a year.

Then there are the fabulously wealthy, like Joseph Lau, a Hong Kong real estate billionaire who recently spent £33 million on a six-floor mansion in Eaton Square in London, an address he shares with the Russian oligarch Roman A. Abramovich.
Even Shanghai Luxury clubs, such as the prestigious Shanghai Travelers’ Club, organize their own “Luxury Real Estate tours” in London for their wealthy members.
More typical, though, are Asian buyers spending £1 million or less. Because of China’s restrictions on overseas investments, most of the Chinese buyers pay cash to minimize the paper trail. None of the London brokers interviewed for this article were willing to disclose the identities of buyers or introduce them to a reporter.
Although Chinese are becoming more active in many overseas real estate markets, including the United States and Continental Europe, London remains highly popular for a variety of reasons, brokers say. Britain has almost no restrictions on whether foreigners can own real estate, and a fairly fluid rental market, which is attractive to buyers seeking income from their properties.

Cultural issues, especially the Chinese emphasis on education, also favor the acquisition of London addresses.
Education is generally the largest budget item in a Chinese household, and many families hope to send their children to elite universities in Britain, which tend to admit more foreign students than top universities in the United States, said Jeff Cao, head of the China sector for Think London, a government-supported agency that helps attract foreign investment to the city.
The number of Chinese students at London universities rose 9 percent, to 948, last year from 867 a year earlier, according to the Universities and Colleges Admissions Service.
For some Chinese buyers in London, Mr. Cao said, the idea is to find apartments big enough to provide the children with more comfortable accommodations than student dormitories and that have spare rooms that can be rented out. Once the children graduate, their parents aim to rent out the whole apartment.
One mainland Chinese investor who owns real estate in London and elsewhere said his London investments were his most lucrative.
“I bought a flat for my daughter’s use when she was studying in London and other flats I have rented out or sold,” Mr. Lai, the owner, who declined to give his first name to protect his privacy, wrote by e-mail.
“The U.K. traditionally has a very good legal structure with good law and order,” Mr. Lai wrote. “That, together with the city’s financial institutions and the British people’s love for owning their own homes, makes the property market extremely attractive.”

Source : http://www.nytimes.com