The power of China Union Pay cards readers

Wealthy Chinese tourists with money to spend don’t need an excuse to buy luxury goods, but they do need the plastic to facilitate their purchases. That’s why it wasn’t until Harrod’s installed special Chinese credit card readers in its stores earlier this year that the store could boast it had sold two bottles of £25,000 wine, and one £140,000 diamond to Chinese customers.
The store has seen a 40 percent increase in salesto wealthy Chinese tourists since installing 75 China Union Pay terminals into its London store.
Using data from VAT reclaim forms (UK sales tax can be reclaimed by visiting tourists at the airport), the luxury store has calculated sales to wealthy Chinese have risen to an average of £3,500 per tourist.
According to the recent statistics released by the ultra high-end travel club for rich Chinese “Shanghai Travelers’ Club”, 37% of Chinese travelers to the UK are ready to spend more than £54,000, and 12% of them is ready to spend more than £70,000 in London!
The increase is largely due to the fact that Chinese bank cards are not recognised outside of China because they use a separate card processing method via China Union Pay card terminals. According to one Chinese saleslady at Harrods, Chinese tourists visiting from the mainland have to bring “a lot of cash” when they travel abroad because so few places have CUP terminals.
In London, the only other store that has the terminals is Selfridges where sales to Chinese shoppers have seen “double digit growth” since the installation of CUP terminals last June, according to a spokesperson.
Making it easy for Chinese tourists to spend money with their domestic cards seems to be a no-brainer. Looking around the store, small groups of Chinese customers now feature prominently. So too do tour groups, who arrive at the store en masse. Harrods’ Mandarin speaking staff say they handle on average 20 to 30 Chinese visitors a day. During Chinese holidays like New Year in February, and two week-long holidays in May and October, coach parties with up to 70 tourists is standard fare.
Joined by telephone from Hong-Kong, Pierre Gervois, CEO of China Elite Focus declared “Luxury retailers should install China Union Pay readers and hire more Chinese speaking staff” He added “It’s the key to success to increase sales with wealthy Chinese tourists”
One Mandarin-speaking sales assistant told beyondbrics that Hermes is the most popular brand, followed by Chanel, Louis Vuitton and Dior. Speaking about their Chinese clientèle another spokesperson said, “they are some of our most discerning customers.”
On a recent trip to the store, one young Chinese shopper from Chengdu, studying at Manchester University, said Chanel was her favourite brand. Her male companion, who was carrying a giant Chanel carrier bag filled with her purchases, quipped: “It used to be Arabs who were the richest shoppers. Now it is the Chinese, isn’t it? Next, it will be the Indians.”

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Stretched Cadillacs, yachts and private Jets, new toys of wealthy Chinese CEO’s

The portly Wang Dong Qing sat in his office facing a wall stacked with toy fighter jets and military tanks.  On his desk, a “platinum” membership card of the Shanghai Travelers’ Club. Down in his parking lot, an eight-metre long Cadillac stood in a 40-vehicle fleet of Mercedes and BMWs rented by Chinese businessmen to impress visiting clients. “Ride my Cadillac,’’ urged Wang, waving a wrist circled with plump Buddhist beads. “For five minutes.”
The ceremonial limousine of American presidents — and lately Chinese magnates — is too long to manoeuvre the back alleys of Sanya where the only industry is luxury with Chinese characteristics. So the millionaires of the economy with a three-trillion-dollar stockpile land their jets land directly on the tropical golf courses of this southernmost island where they gamble away a fortune.
“Last month, one Chinese golfer lost 20 million yuan here,’’ Raymond Hau, general manager of the Sun Valley Sanya golf resort, told with a hearty laugh. “In one day.”

On the trail of the spendthrift habits of the world’s new rich, we took a four-hour flight from smoggy Beijing where everyone’s talking about the rich-poor gap and unaffordable housing, to a former fishing village being marked up as the ultra-capitalist beachfront of communist China.
On this, Beijing wants to beat Bali and Monaco strip of half a million people (but eight million affluent Chinese tourists). This reporter took a spin inside a limo, scrambled aboard yachts and saw blueprints for floating villas and the costliest holiday homes in China. Officials were reluctant to discuss a Chinese media report that Asia’s largest hotel is being built here — with a greyhound racing stadium.
We wandered into the resort with China’s only par-6 golf course where Chinese billionaires are known to spend the wealth they made since the last three decades when it became officially acceptable to get rich.
We asked Hau what sets apart the Chinese tycoon from his western counterpart. “Since the last year and half, people show us wads of cash and demand to play golf right away without reservations,’’ Hau said. “Golf will not develop in China without gambling — up to 500,000 yuan per hole. When Beijing golf courses close in winter, they all come here.’’
China is a developing country, its leadership repeats in every global negotiation. It is also the fastest-growing economy and the second-largest luxury market where foreign designer stores post higher profits in upwardly mobile second and third-tier cities than Shanghai.
The ‘developing country’ slogan is misplaced in Sanya where the ragtag fishing boats and imported yachts sail on separate sides outside China’s largest yacht club.
Wang Dafu is not available but his Lamborghini is parked at the entrance of the Dubai-style Visun Royal Yacht Club. Da fu aptly means big fortune. “The reason you earn money is to spend it,’’ this owner of a 72-foot Pershing yacht told NYT last year.
Private yacht racing in the southern sea is getting so popular that this club has raised its membership fees and started expanding the port for hundreds more berths.
“The fishing boats will be moved out,’’ assured the club employees. We took off our footwear and climbed aboard yachts whose owners or renters are spread from Shanghai to poorer provinces like Shanxi. The interiors were plainly furnished with no signature statements. It’s the mere ownership of ‘Monte Carlo’ that matters.
Chinese eaves were the tradition of the first rich generation homes. The current second-rich generation shops for beachfront Spanish villas and bedrooms bordered with plunge pools.
“We call it oriental Hawaii,’’ said Xu Guorong, executive director of the Yalong Development Company. This Goa-like strip of silky white sand named Yalong bay — meaning Asian Dragon for its shape — was wetland 15 years ago. Few foreigners except Russians flock to this elite hideout, but every official who spoke to HT said that India – where Forbes estimates that the 100 richest have comparable wealth to China’s 400 richest — is their next big market.
We asked Xu to describe the taste of the affluent spender. He pointed his laser to the ‘dragon’s head’ on a Florida-inspired blueprint of villas and a floating five-star resort. “Hotel guests and villa owners will take yachts directly to the lobby or villa entrance.’’
“ The new generation of wealthy Chinese consumers loves boating and private jets” said Pierre Gervois, CEO of China Elite Focus, a specialized agency for VIP events targeting wealthy Chinese travelers.
State-owned companies are shadow owners in flagrantly lavish property being designed for China’s cash-rich underbelly and communist officials with a prerequisite for 170-cm hotel hostesses.
Our taxi zoomed down an empty highway with lamps powered by white windmills. The migrant driver from central China rubbed his fingers to indicate he moved here for the money.
“In the global travel industry, the community everyone wants to cater is the Chinese,’’ said Raj Mohan, the month-old Renaissance hotel’s food and beverage director.
On the eighth floor Presidential suite, we wandered into four bedrooms, two private pools and meeting rooms that look like Beijing’s great halls that await the Chinese mogul. The tag: 88,888 yuan ($13,700).
“Ninety per cent of our tourists will remain mostly Chinese for five years,’’ said tourism official Tang Sixian as he dialed a developer of an upcoming artificial island. The island will have only one oversize landmark. A row of four luxury high-rises and a luxury hotel with 360-degree sea views and balcony baths.
“When Sanya was a fishing village, I visited the developed world and saw its lifestyle,’’ Cadillac-owner Wang told us. “After many years, Chinese rich people have the ability to spend like that.’’

Chinese couples want personalized (and expensive) wedding, in China and abroad

Fitness club manager Liu Yaqiong nurtures dreams of being a movie star. Although she’s had offers to appear on television productions, she has never played a leading role until her wedding day. In September last year, the 26-year-old married her boyfriend Zhang Yin, a musician of the same age. The Western-style wedding cost about 700,000 yuan ($106,700), which included a Cartier engagement ring and a banquet of 15 tables at the European-style five-star Legendale Hotel in the heart of Beijing. On the big day, the happy couple sang, danced and played music for their guests. But what impressed families and friends most was a music video featuring the couple’s trip to Phuket island in Thailand.

The MTV had a theme song especially composed by a friend of the groom’s, presented as a wedding gift.
Production of the four-minute MTV cost about 10,000 yuan, not including the expenses for the trip itself. But Liu says it was worth every cent because the video reflected who they are and what they are good at, and made their wedding unique.
“We had prepared for the ceremony one year in advance,” she says. “It was an occasion of a lifetime and I did not want any regrets.”
To stand out or simply be different: That is what most Chinese couples aim for on their big day, a spillover, perhaps, from their everyday competitive urban lifestyle.
This pursuit of a personalized wedding by an increasing number of young Chinese has affected how much, and how, they spend on their wedding day. The demand has also created a mature, increasingly sophisticated and creative service industry.
Last year, 12 million couples tied the knot, and the fever continues this year, with an estimated 5-percent increase in the number of registrations at the Ministry of Civil Affairs, according to the Committee of Wedding Service Industries.
The growth in the number of new unions is spurred by the children of baby boomers, born in the mid-1980s and now of marriageable age.

Unlike their parents who had gone through an age of austerity, the post-1980 generation only children consider the wedding ceremonies very important, Shi Kangning, secretary-general of the committee told China Daily.
Because parents of both bride and groom attach such importance to the event, “the scale of the wedding is bigger”, Shi says, and commensurate costs are higher. Not only that, but couples are also constantly finding new ways to make their weddings more unique and personalized.
There is no national survey available on the average expenditure for weddings, but Shi says the committee has estimated that a wedding in the bigger cities usually costs at least 100,000 yuan, excluding the price of buying a new home, a car or other indirect spending.
The committee has, however, seen a drastic change in how wedding expenditure is veering toward more rational and practical consumer patterns – something that is reflecting changing elements in the couples’ relationship.
“Expenses that show off wealth and status such as the rental of luxury cars for the wedding motorcade is no longer that popular,” Shi says. This has been gradually abandoned, along with costly photo sessions with innumerable costume changes at photography salons.
Instead, the newly weds are opting for wedding banquets with a theme or stylish cuisine, tailor-made wedding gowns and highly personalized wedding photos. To cater to these specialty requests, more and more small-scale wedding planners are offering their services.
“Chinese couples want now the very best for their wedding. They have now enough purchasing power to travel to New York or Las Vegas for their wedding”, said Pierre Gervois, CEO of China Elite Focus, a Shanghai based marketing agency specialized in promoting luxury destinations for wealthy Chinese tourists.

Liu Yaqiong and Zhang Yin had their MTV and wedding video made by 24 Frame Video Studio, a Beijing-based film and music video production company that has specialized in weddings since 2004.
Most of their clients were born post-1980, at a time when China was opening up to trends from the West, including wedding traditions such as white wedding gowns and honeymoons at beach resorts.
“The younger generation has always wanted to try new things to make their wedding as special as possible,” says Cai Jin, planning director of 24 Frames. The production company’s busiest period is in May and October. Although it may take up to three months’ waiting, most couples do not mind.
“We have a backlog of at least 40 to 50 videos waiting to be edited in our studio and the queue for a photo shoot is very long,” he says. The most popular destinations for an overseas shoot include Indonesia’s Bali Island, Prague in the Czech Republic and Phuket in Thailand.
Couples planning to get married are coming up with many new ideas, and these again spur the creating of specialized services. For example, most couples are getting bored with the release of colorful balloons or even a fireworks display. They are now going for living color – in the form of butterflies, which are regarded as symbols of affection and loyalty.
Some bridegrooms put the wedding band into a box with live butterflies, and when the bride opens it, a fluttering surprise flies out.
Liu Gang, a manager from Diezhilian, a company that specializes in releasing butterflies on special occasions, says demand for his company’s products has increased by about 30 percent compared to last year.
He is getting even clients from smaller cities.
Liu says the average cost for a butterfly is about 15 yuan ($2.30). An indoor wedding often uses about 100 butterflies and a ceremony outdoors may use even more.
Couples in their 20s or 30s with greater disposable incomes are willing to spend more on their wedding, creating opportunities for high-end and specialized wedding products or services, Shi from the Committee of Wedding Service Industries notes.

Even destinations as far as the Caribbean have now the favors of wealthy Chinese couples. According to the Shanghai Travelers’ Club,  a high end luxury travel club for wealthy people “ Wealthy Chinese couples are interested by the Caribbean for their honeymoon, not only because of blue water and white sand beaches, but also for having a meeting with their private banker and make smart investments”.
The most famous wedding website of the Caribbean region  www.marrycarribean.com has even now a Chinese version. According to Jacqueline Johnson,  the famous “Wedding Guru”, and also President of the the Caribbean Wedding Association “Chinese couples start to come to the Caribbean to find a high quality of service, and often link this trip to a shopping tour in the US before or after their honeymoon. This is a strong trend that is monitored in every Caribbean State”
Wei Min, 33, a public relations manager, bought an 8,000 yuan ($1,225) wedding dress for her wedding last month. The strapless floor-length gown made from ivory-colored lace cost the bride a full month’s salary, but she’s not counting the cost.
“I want to have my own dress,” Wei says. “I want to be the center of attention on my biggest day.”
Yang Xiaolu, marketing manager of Yumi Katsura in China, says the surge of China’s rich and middle-class has boosted his company’s business in China. The top-end Japanese bridal gown-maker is expected to open shops in more first-tier cities in addition to its present two facilities in Beijing and Shanghai, Yang says.
Chinese consumers now value their wedding gowns more as they come to a deeper understanding of what it represents.
“Only a few years ago, Chinese brides-to-be would rent a wedding dress. Now they are ready to own their own haute couture bridal gown.”
Yumi Katsura entered the Chinese market three years ago and their gowns are priced between 20,000 to 30,000 yuan for dresses made in China.
“This price range is the most popular among our potential customers,” Yang says. “Given the huge potential of the market, we are seeing more willingness to spend on our Japan-imported wedding gowns, which are priced at least 50,000 yuan.”

“A large number of wedding products from the West are actually made in China and many of them are of top quality. It is time for Chinese wedding consumers to realize that wedding products, though used only once, can be and should be of better quality,” sums up Stephanie Zheng, director of strategy and operations of the China office of The Knot, a US-based online wedding website.
As Zheng notes, Chinese consumers can only get more sophisticated, and they will begin to appreciate and demand better quality products, no matter if they are home-made or imported.