Pierre Gervois: What Chinese Travelers Want

Hospitality guru Pierre Gervois on how to cater to Chinese tourists.

PIerre Gervois TV Interview News China 2016

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Luxury Brands’ Value Shrinks $7 Billion as China’s middle class spend less

STC event pic 2Luxury isn’t what it used to be. The value of the top 10 luxury-goods brands fell 6 percent, or $7.1 billion, to $105 billion as companies from Prada SpA to Cartier grappled with slowing sales in China and Russia, research company Millward Brown said in the 2015 BrandZ study.

Only Louis Vuitton and Chanel saw an increase over last year. Vuitton gained 6 percent to $27.4 billion, placing LVMH Moet Hennessy Louis Vuitton SE’s biggest brand atop the luxury ranking for the 10th straight year. Chanel’s value rose 15 percent to $9 billion, propelling it to fourth in the list behind second-place Hermes and Kering SA’s Gucci.

Spending on gifts has fallen in China as the government clamps down on corruption, while Russia’s shoppers are suffering from the ruble’s depreciation and sanctions tied to the conflict in Ukraine, Millward Brown said. At the same time, efforts to appear more exclusive have created opportunities for cheaper brands such as Michael Kors and Tiffany, which finished in the top ten for the first time, the researcher said.

But this does not reflect the trends of High Net Worth Chinese, who still consume luxury goods overseas, during their business/leisure trips.

The brands who suffer the most are brands with low brand equity, in the eyes of Chinese consumers, as the most prestigious brands (in particular watches brands) continue to thrive with Chinese  affluent collectors.

Chanel, the maker of No. 5 perfume, and handbag purveyor Vuitton fared better than their peers thanks to their unique approach, according to Elspeth Cheung, Millward Brown’s Global Brandz Valuation Director.

Chanel has harmonized prices across regions, encouraging more in-store consumption, Cheung said. And Vuitton has successfully revitalized its brand with a fresh take on its original LV monogram.

The worst performers were Cartier, whose value decreased 15 percent to $7.6 billion, placing it sixth, while Prada slumped 35 percent to $6.5 billion, according to the study. An overly expensive product mix and lack of novelty at Prada have led shoppers to spend elsewhere, analysts at Exane BNP Paribas have said.

Gervois magazine - The new travel magazine for millennials travelers in the United StatesHermes’s value fell 13 percent to $18.9 billion and Gucci declined 14 percent to $13.8 billion, according to the study. Rolex fell 6 percent to $8.5 billion, placing it fifth. Rounding out the top 10 most valuable luxury brands were Burberry in eighth, Michael Kors and Tiffany.

The luxury ranking is part of a broader study commissioned by WPP Plc, the advertising-company parent of Millward Brown. The study is based on interviews with more than three million consumers and an analysis of companies’ performance.

 

In conclusion, Luxury brands should open less stores in Mainland China (and certainly close some of them), and focus their marketing efforts on Chinese outbound travelers who prefer now to buy overseas, to enjoy better prices, better service, and the social status which comes with a product bought in New York, London or Paris. “Bought in Beijing” is not cool anymore.

Source: Business of Fashion

 

Shanghai Travelers’ Club Magazine launches Men’s Fashion new monthly editorial feature

Shanghai Travelers Club - Men's FashionThe Shanghai Travelers’ Club magazine, China’s leading luxury travel magazine for High Net Worth global Chinese travelers, launches a new monthly regular section about Men’s Fashion.

“As Chinese entrepreneurs are becoming more and more international, they are more attentive to their personal style while in business meetings or in corporate events” said Pierre Gervois, Publisher and Editor-In-Chief.

The newly appointed Men’s Fashion Editor, Tyron Cutner, will be in charge of this new editorial feature.  An expert in men’s fashion, Tyron Cutner is a well known fashion adviser in New York City and will bring his expertise and style to the publication.

“I feel proud to be part of the prestigious Shanghai Travelers’ Club magazine. Every month, we’ll share with our Chinese readers the latest trends in Men’s fashion and accessories, as well as the basics that every international gentleman must have in his suitcase when traveling”, said Tyron Cutner.

Every month, starting in September 2015, the Shanghai Travelers’ Club magazine will feature a section providing fashion advice for the modern, style conscious, Chinese businessman.  Wether he’s attending a negotiation meeting in New York City, at a Charity ball in London, or attending a gala dinner in Paris.

According to a survey by China Elite Focus, 74% of Chinese male entrepreneurs and top executives aged 30 to 45 agree that paying attention to their personal style has a positive impact in conducting business.  And a staggering 81% think that they receive a “Disappointing” or “Very disappointing” welcome when shopping in the United States.

“It’s also important that fashion brands realize that they need to substantially improve the way they interact with affluent Chinese customers in the United States. We hope that this new editorial content will encourage U.S. retailers to implement long awaited changes in the customer service towards Chinese travelers”, Pierre Gervois added.

The Shanghai Travelers’ Club magazine is a China Elite Focus Magazines LLC publication withg offices in Hong Kong, Shanghai and New York City.

Chinese outbound tourists adjust their spending: More luxury experiences, less luxury shopping

art-Chinese-Tourists-Sydney-620x349China Confidential, a Financial Times research service, estimates that total spending by Chinese travellers on outbound trips hit Rmb3.1tn ($498bn) in 2014. Spending by Chinese tourists is now greater than total spending on household consumption of around $436bn in Indonesia and $442bn in Turkey. And this figure is even more remarkable given that the Chinese outbound tourism trend is at a relatively early stage. Although the number of Chinese outbound trips grew 20 per cent year-on-year to 117m in 2014, according to official tourism statistics, less than 6 per cent of the population hold a passport.

China Confidential’s estimate for total spending is higher than the official estimate of $200bn, which excludes spending on flights, visas and other items. But the figures are in line with those from other external sources. They closely match estimates of non-educational spending by Chinese visitors to the US, for example, by the US National Tourism Office.
However, while the amount of current spending and the potential for growth remain enormous, there are signs that many travellers are starting to cut back on spending while overseas as their priorities change.
In particular, China Confidential’s latest annual report on outbound tourism, released this week and based on a survey of 1,288 outbound tourists and 40 travel agencies nationwide, identified a 6.2 per cent year-on-year slowdown in per capita spending on travellers’ outbound trips during 2015, following a 9.4 per cent decline between 2013 and 2014. The most recent contraction was led by an 8 per cent year-on-year decline in spending on shopping.

 

The lower spend on shopping is in part related to domestic conditions. The general macroeconomic slowdown may have prompted some travellers to rein in their spending during overseas trips, while Beijing’s anti-corruption drive has resulted in a marked reduction in gifting purchases among wealthier travellers in particular.
However, it would be wrong to view this slowdown purely in macro or policy terms. Instead, lower spending on shopping is part of a broader shift in spending priorities, with wealthier travellers increasingly prioritising experiences over luxury purchases. On average, travellers in the high-income cohort spent 31.1 per cent more than they had a year earlier on entertainment and 78.6 per cent more on other services including car rental and excursions. Those making purchases are increasingly opting for more affordable or lesser known brands, echoing trends seen domestically.

STC magazine - Gervois Hotel Rating CoverThese shifting priorities should broaden the potential beneficiaries of the Chinese outbound trend beyond the luxury retailers that have been the chief winners to date. Rising spending on experiences should benefit hospitality, entertainment and tourism service industries to a far greater extent than in the past, when many Chinese overseas travellers scrimped on hotels, food and activities to spend more at the shops. And the beneficiaries will not just be the big-name hoteliers, restaurateurs and tourist attractions, with many travellers seeking to ditch the growing crowds of fellow countrymen and venture off the beaten track.
China’s outbound journey has plenty of mileage left to run. Understanding rapidly shifting tastes and spending patterns will be key to capitalising on this long-term growth story.

Copyright : The Financial Times Limited 2015
Source: Matthew Plowright, article published on April 28, 2015 in http://www.ft.com

China’s trade deficit in services sector widens as Chinese tourists spend overseas

Bicester VillageChina’s trade deficit in services widened to U$18.3 billion in May, as Chinese tourists continued to spend more abroad than foreigners visiting the country, the foreign exchange regulator said on Tuesday.
The deficit was led by a US$16.2 billion gap in spending between Chinese and foreign tourists, according to data from the State Administration of Foreign Exchange.
The country posted a US$17.3 billion deficit on trade in services in April. The services sector had a deficit of US$10.2 billion in May last year.
For the first five months, China had a deficit of US$76.7 billion in services trade and a surplus of US$207.8 billion on trade in goods, producing a combined surplus on trade in goods and services of US$131 billion, the data showed.
Beijing has promised to further open up China’s services sector, which is dominated by Chinese companies, to foreign investment but the process has been gradual.
The government has been trying to boost the services sector to create more jobs at a time when factories are struggling, but analysts warn that clumsy attempts to force the transition could do more harm than good.

Source: http://www.scmp.com

Chinese tourists bring cheer to retailers in US

Chinese tourists - ManhattanYin Jie, a 35 y.o. Chinese tourist from Beijing, is looking at the Niuyue Mag black and blue sticker on the window of a fashion designer store in SoHo “If they have been recommended by Niuyue Mag, I know it’s a very creative brand” she says with a big smile, watching her iPad with the Spring issue of Niuyue Mag.

Chinese shoppers are expected to provide the much-needed momentum for retail sales in the US on Friday, even as most Americans celebrate their country’s 238th birthday with fireworks, cookouts and parades.
“We have received calls from several Chinese shoppers about July 4 sales,” said Jim Anderson, marketing director of the Chicago-based Fashion Outlets. “Many US retailers have already started Independence Day sales, and we expect the deals to continue through the holiday weekend..
A manager at the upscale-luxury South Coast Plaza in Costa Mesa, California, who did not want to reveal her name, said that the number of Chinese tourists, especially independent travelers, goes up during the Independence Day period.

GERVOIS magazine Advertising and sponsored content opportunitiesThe Fourth of July week is considered to be a boom period for retailers in New York. “Short-term four-day travel packages, especially ones with Woodbury Common on the route, have become extremely popular with Chinese tourists,” said Jasmine Xu, assistant manager of EWorld Tours, one of the largest Chinese-owned travel agencies in New York.
Woodbury Common Premium Outlets, located in Central Valley, New York, about an hour and a half outside of Manhattan, has 220 high-end stores and is owned by Premium Outlets, a subsidiary of Simon Property Group. This year, Woodbury’s sales will run until Sunday, and offer an additional 25 percent to 65 percent discount on top of their everyday savings on brands like Armani, Fendi and Burberry.
“On Monday, we had 15 Chinese tour groups at the Woodbury outlets, and on the first day of the sale, there were more than 20 tour groups from China,” said Jean Guinup, the regional vice-president for the northeast region at Simon.

“We may see even more than that, and it’s the same for all the Simon Premium Outlets on the East Coast and West Coast,” Guinup said.
“I’m sure there will be a lot of Chinese people going to Woodbury during Independence Day, based on our experience last year,” said Laurie Heller, marketing manager of Coach USA Short Line. “Many of them come especially when there are big sales, like Memorial Day or the Fourth of July.”
“I got to know about the huge sale happening there and decided to go and shop for brands like Coach, Tommy Hilfiger and Juicy Couture,” said Wang Xinji, a Chinese tourist from Shanghai, who was waiting with her boyfriend at the Port Authority Terminal in Manhattan for the shuttle bus to Woodbury Common on the first day of the sale.

Source: China Daily

Harrods boss criticises Chinese visa proposals

Chinese tourists Harrod's - China Elite FocusThe boss of Harrods, the prestigious London department store, has warned that proposals by the Coalition to simplify visa applications for Chinese tourists are “smoke and mirrors”.
UK retailers have pressed the Government to overhaul the Chinese visa system because of concerns that the UK is missing out on spending to other European countries.
However, Michael Ward, the managing director of Harrods, said that measures unveiled by George Osborne, the Chancellor, during a trade mission to Beijing are likely to have little impact.
Speaking at a breakfast for the chief executives of luxury brands organised by trade body Walpole, Mr Ward said the Chancellor’s proposals were “smoke and mirrors” and would not help wealthy tourists travelling independently.
Business leaders have warned that the UK is losing £1.2bn of sales each year because Chinese visitors are put off by the complex visa process. Tourists travelling to Europe from China must apply for a separate UK visa alongside the Schengen visa system, which is cheaper and allows Chinese tourists to visit more than 25 other countries in the EU including France.
In October, Mr Osborne introduced a new pilot scheme that will allow tourists to secure a UK visa by only submitting the EU’s Schengen visa.
However, the scheme only applies to selected Chinese travel agents and Mr Ward said the proposal will “do nothing” because the government in China is clamping down on tour groups.
As part of a corruption crackdown, Chinese authorities have passed a law restricting tour groups because of concerns that the tour guides were taking bribes to take visitors to certain places.
Mr Ward said that regulations should boost the UK, but that it means the visa proposals will have minimal impact.
The Harrods boss said that most of the company’s Chinese shoppers were young consumers travelling independently of tour groups. “The Chinese consumers are very young, aged 20 to 25,” he added.
Giles English, the co-founder of watchmaker Bremont, also called for the Government to streamline the visa process for Chinese visitors.
“Anything that makes it easier is only going to help us all,” Mr English said.
The UK China Visa Alliance, which has led calls for the system to be reformed, has calculated that only 6pc of Chinese visitors to Europe obtain two visas, while 85pc obtain only a Schengen visa and just 9pc get a UK visa.
Source: The Telegraph, article by Graham Ruddick