France top destination for luxury travelers - Rupert Hoogewerf

Rupert Hoogewerf

France is the top destination of luxury traveler, followed by the US and Australia. The Maldives, Switzerland and Dubai are the fastest growing, tells Rupert Hoogewerf, founder of the rich list in the Shanghai Daily.

The Shanghai Daily:

FRANCE is overwhelmingly the destination of choice for well-heeled Chinese travelers going on luxury trips abroad while the US ranks close behind, a report from the Hurun Research Institute said yesterday. 

The Maldives, Switzerland and Dubai are the international destinations growing most rapidly in popularity as travel spots favored by the "Chinese luxury traveler," partly thanks to visa arrangements offered by the countries, the research by the institute found. 

The typical "luxury traveler" goes away for an average of eight days at a time, three times a year, and travels in groups of nine, according to the institute and International Luxury Travel Market Asia, which interviewed 150 Chinese millionaires in US dollar terms on their preferences. 

These wealthy travelers are holidaying more - 20 days per year, up five days on last year. 

Shopping is a prime motivation for travel, with each traveler spending an average of 813 euros (US$1,011) on tax-free goods per trip, according to Global Blue, the tax-free refund group. 

China's luxury travelers' "love affair with all things France" was unlikely to change any time soon, said Rupert Hoogewerf, Hurun's founder. More than 40 percent of those surveyed cited France as being in their top 10 preferred destinations to travel to. 

Within China, Sanya in Hainan Province, Hong Kong and Yunnan Province are the top three spots for luxury travelers to visit, the institute found. In addition, Tibet is becoming more popular.

More in the Shanghai Daily.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Chinese consumers are buying status - Paul French

Paul French

For many the purchasing habits of Chinese consumers are hard to gauge. Retail expert Paul French tells in The Telegraph why Chinese buy what and were. "Chinese consumers are still buying status." But what gives status, might vary from other consumers.

The Telegraph:

“For Chinese consumers, Confucian group-think is important and at the moment they are still buying status to show that they have achieved things,” says Paul French, founder of the market research company Access Asia. “So people don’t worry that they have had to spend the past six months eating nothing but pot noodles in order to afford the newest Louis Vuitton handbag.” A designer bag retails for between £800 and £3,000 in Britain but can be around 30 per cent more in mainland China because of high import tariffs. 

The lure of luxury brands is so strong that even provincial cities like Shijiazhuang, the unglamorous capital of Hebei province, in eastern China, boasts a swanky Gucci store. But, actually, it’s the appearance of mid-market brands such as Zara and H&M in second-tier cities such as Dalian, Nanjing and Chengdu that’s the surest sign of the growth of China’s middle class. 

H&M, which now has 77 stores nationwide, and Zara, which has 250, do a roaring trade in the sort of safe basics, like black suits and white tops, young Chinese women love to wear. Unlike their nouveau riche counterparts in Russia, the Chinese don’t go in for zany individualism. “Not all brands are equal,” says French. “The Chinese don’t go for Versace. They don’t want the lemon shirt and the orange pants. No one wants to look like Elton John.” 

Wanting to play it safe and also to make purchases which show clearly where you stand in China’s social hierarchy has its roots in the Chinese concept of “face”. This idea loosely correlates to how your appearance and conduct lead others to assess your status in society. So, coming to the office looking like Lady Gaga, when everyone else is dressed in black and white, would result in an enormous loss of face, with heavy social consequences. 

“With your purchases you want to tell people that you’ve urbanised, [that] you have a flat, a car, a husband or wife. And you can’t afford to blow [this image] by wearing the wrong tie. It’s not like you’d get a bit of gentle ribbing from your colleagues. It’s social suicide,” says French.  

But how do Western brands become products that give Chinese consumers the “face” they aspire to? It’s not as simple as sticking on a hefty price tag. Though this sometimes works. The American beer Pabst Blue Ribbon, which has a distinctly blue collar reputation at home, was successfully launched in China as a luxury product, costing 20 times the US price. 

Generally, though, the Chinese have deep-rooted cultural likes and dislikes. Companies have to adapt to local tastes and some have been defter and more nimble than others. High-end lingerie labels, for example, such as La Perla and Agent Provocateur, have failed to crack China. “Chinese women,” French explains, “don’t want to spend a fortune on something that only a man they’ve already snared is going to see.” With 124 men to every 100 women, women don’t feel they have to put on a vamp act to find a partner.

More in The Telegraph.

Paul French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.  

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Fine chocolate: the ideal China gift - Shaun Rein

Chocolate warriors

The Europeans, especially the Belgians and the Swiss, bring China the ideal gift for the wealthy: chocolate. Shanghai's World Chocolate Wonderland showcases. Fine chocolate is high on the agenda of affluent shoppers, tells business analyst Shaun Rein in the Financial Times. 

The Financial Times:

China's increasingly affluent consumers are boosting spending on fine chocolates, says Shaun Rein, author of The End of Cheap China: Economic and Cultural Trends that will Disrupt the World. 

More than half of China's chocolate sales are for gifts. Christmas and next month's Lunar New Year are the peak seasons. 

Rein says costly confection fills a gap in traditional present buying. "When you don't want to buy someone a Mont Blanc pen but you want to buy something more expensive than mooncakes [a traditional gift for the mid-autumn festival] ... chocolate hits a good market position. There just aren't that many other prestige gift items in the $50-$200 range."

More in the Financial Times 

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form . 

Shaun Rein

More on Shaun Rein and his upcoming book "The End of Cheap China" at Storify.

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China's rich get richer and more confident - Shaun Rein

Shaun Rein

Luxury good producers like Louis Vuitton and Porsche do not have to panic after Robert Frank's WSJ article suggesting China's wealthy stop spending. Frank looked at the lower middle class, argues business analyst Shaun Rein in CNBC. According to his research, the real wealthy Chinese spend more than ever.

Shaun Rein:

The results show the ultra rich, people worth more than $10 million, are actually getting richer and remain very confident about their earning ability and those worth more than one million dollars also reported being very confident. The vast majority reported that they planned to spend at the same or higher level in 2012.  One businessman in the services sector in Shanghai told me, “The economic problems are serious but we expect profits to rise by 30 percent next year. Even if profits don’t go up, I plan on spending at the same levels or more.” 

What do these wealthy Chinese want? Our research suggests that they are continuing to go for ultra-high end products and are looking to buy luxury cars like Mercedes and BMW. Restrictions on the number of houses one can buy and a weak stock market is also making the wealthy spend more and invest less. 

The result is that exclusive brands, like watch and jewelry brand Van Cleef & Arpels for instance, will continue to do well in 2012 as the wealthy start to differentiate themselves from others. Many wealthy Chinese told us they are tiring of the more popular luxury brands like Louis Vuitton because they are becoming too common.

 More in CNBC.  

Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch or fill in our speakers' request form.

More links to Shaun Rein and his upcoming book The End of Cheap China in Storify.

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Luxury spending moves to smaller cities - Shaun Rein

Shaun Rein

Spending on luxury products moves in China to the third-tier cities, notes business analyst Shaun Rein in an interview with AFP. Unlike the rich from Shanghai and Beijing, inhabitants of third-tier cities can travel less internationally.

AFP:

Chinese shoppers are expected to spend US$15.6 billion on luxury products this year, up 20 percent from last year, said Shaun Rein, managing director of China Market Research Group in Shanghai. 

But only 40 percent of the purchases are made in China. 

Many shoppers in Beijing and Shanghai prefer to travel to Hong Kong or Europe for their top labels to avoid a mainland sales tax of up to 17 percent, consumption tax of as much as 56 percent as well as hefty import duties. 

Rein said consumers in second and third-tier cities tended to travel abroad less often and so made their purchases in China. 

"Purchasing power is moving from first-tier to second-tier cities," he told AFP, adding that the Chinese luxury market was expected to grow a further 20 percent in 2012. 

"People don't know where to put their money so things are really going very high-end right now," he added, referring to government restrictions in some cities on car and property purchases, which are aimed at curbing chronic traffic congestion and inflation.

More at AFP

More links for Shaun Rein and China's economy at Storify.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.  

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Luxury dreams from Chengdu - Helen Wang

Helen Wang

Second-tier city Chengdu is betting on the high-end luxury consumption and wants to bring annually twenty world-brand luxury products into the city, writes author Helen Wang in Forbes. New targets for China's middle class. Helen Wang:

A cover story in Chengdu Today, “Global Luxury Brands Stride Forward in Chengdu,” reveals that Chengdu municipal government has set a goal to bring “twenty famous international brands to Chengdu every year” and “by 2015, primacy ratio of international first-tier brands will reach 80 % or above in western China.” Hurray and hurry, luxury goods companies! 

In 2010, Chengdu’s retails sales reached $5.8 billion. Much of it went to luxury brands such as Hermes, Burberry and Prada. Louis Vuitton alone registered record sales of $138 million. Cartier generated more revenue in Chengdu than in any other city in China... 

I had an interesting conversation with the magazine’s editor Eureka Wang. Knowing that I have written a book about the Chinese middle class, she asked me if middle class Americans are also fanatically buying luxury goods. I said “very rare.” She was surprised. “Who is buying luxury goods in America then?” she asked. “The very rich,” I said.

More in Forbes Helen Wang is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch.

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Who are China's luxury shoppers? - Helen Wang

China's middle class looks definitely different from the American middle class. Author Helen Wang discusses with the editor of Chengdu Today the profile of China's luxury shoppers and analyzes their profiles on her weblog.

In 2010, Chengdu’s retails sales reached $5.8 billion. Much of it went to luxury brands such as Hermes, Burberry and Prada. Louis Vuitton alone registered record sales of $138 million. Cartier generated more revenue in Chengdu than in any other city in China. When I left China 20 years ago, I was considered too “bourgeois” because I liked to put on pretty clothes while others still wore Mao suits. Those days are long gone. Today, not being “bourgeois” is a subject of public ridicule. As the cover story describes, Chinese consumers consider buying luxury goods a symbol of “paying attention to details and pursuing quality of life.” You cannot argue with that. I had an interesting conversation with the magazine’s editor Eureka Wang. Knowing that I have written a book about the Chinese middle class, she asked me if middle class Americans are also fanatically buying luxury goods. I said “very rare.” She was surprised. “Who is buying luxury goods in America then?” she asked. “The very rich,” I said. This is the difference in luxury consumption between China and the United States.

More on Helen Wang's weblog (including profiles) Helen Wang is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch.

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Louis Vuitton strengthens brand at Beijing museum - Shaun Rein

Luxury bag producer Louis Vuitton has scored a major deal by cooperating with the Beijing National Museum, says retail analyst Shaun Rein in News Channel Asia. Linking to its own historical roots works very well in China.

"Louis Vuitton consumers are very interested in buying a brand with long-term heritage... and I think that's why Louis Vuitton is very smart to partner with the museum," Rein told AFP...

"Right now Louis Vuitton
is the dominant player but they are going to have massive problems in the coming five years" as people start to buy their second or third luxury handbag, said Rein.

"After you've bought Louis Vuitton or Gucci, do you go back to Louis Vuitton and Gucci or do you try something different?"

More in News Channel Asia.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting of conference? Do get in touch.

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Tariff cut needed to boost luxury sales - Shaun Rein

Shaun Rein by Fantake via Flickr

Chinese have spent last year 13 billion US dollar on luxury goods, but only 40 percent in China itself, says Shaun Rein in CNBC. Because of the high tariffs luxury goods, including cars, are 20-30 percent more expensive on the mainland. "They are shooting themselves in the foot."

Shaun Rein is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.

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Luxury sales, for the wealthy and not so wealthy - Paul French

Paul French

As the sales of luxury goods to Chinese spike, retail analysts try to figure out who is buying what. The profile of the buyers can vary a lot, tells Paul French The Guardian.

Many of these new consumers are executives and entrepreneurs, keen to show they have made it, or the offspring of wealthy families. Others, however, are the aspirational: "Secretaries who live on instant noodles for six months to pay for their LV handbag ... it's a way of saying, 'I have become part of this world,' " said Paul French of the retail consultancy Access Asia.

More about luxury sales in China in The Guardian.

Paul French is a speaker at the China Speakers Bureau. Do you need him at your conference or meeting? Do get in touch.

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Taiwan can catch China's luxury market - Shaun Rein

Shaun Rein by Fantake via Flickr

As growing crowds of mainland Chinese visit Taiwan, curious to see how pre-revolutionary China could have looked like, the island could capture a major share of the luxury good purchases, says Shaun Rein in CNBC. Sixty percent of those goods are bought now in Hong Kong or Europe.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your conference or meeting? Do get in touch.

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Who buys the luxury goods in China? - Shaun Rein

Shaun Rein by Fantake via Flickr

The luxury goods market in China is growing fast, says Shaun Rein in CNBC, but retailers often focus on the wrong kind of customers. The rich grab a visa and shop in Milan and Hong Kong. Aspiring young buyers still want their Gucci bags, but have to buy it at home.
China might take over Japan soon as the major luxury market, as it grows annually 20 to USD 13 billion in 2010, but the rich Chinese buy outside the country, warns Shaun Rein:

One, there’s more prestige in buying a Bulgari bag in Milan than in Beijing. Two, prices are also 30 percent cheaper abroad because of taxes and tariffs. Even billionaires don't want to waste money.
Only 40 percent of the $13 billion worth of luxury items sold to the Chinese last year were transacted in the country. That explains why Chinese tourists in France are now the highest per capita spenders there.

So, who can the luxury brands sell to?

The aspiring class – often younger people under the age of 30 who cannot afford to travel abroad and who still live at home rent-free, or those who live in second and third tier cities where it is hard to get visas to go abroad.

It is common for 25-year-old secretaries making $600 a month to save two months’ salary to buy $2,000 Gucci bags or drop $200 on a La Mer facial cream. Wealthy mining tycoons in fourth tier towns often cannot get visas, so they buy in China.
Many luxury brands are likely to fail in China as they only stock products that the elite buy when they should also be offering entry-level products for the younger, aspiring class.

More in CNCB.

Shaun Rein is speaker at the China Speakers Bureau. Do you need him at your meeting of conference? Do get in touch.

Second wives key for luxury consumption - Tom Doctoroff

Tom Doctoroff by Fantake via Flickr

China's second wives account officially for one third of the country's luxury consumption, says Tom Doctoroff in the Huffington Post, and elaborates on the distinction between marriage and sex in China.

Because China has never had a humanist revolution, sex and marriage have always been relatively divorced. That is why many Asian cultures have an immensely commercialised and categorised [sex industry]. The way they separate the two is quite stunning - the choices are up on neon boards like a McDonald's menu... 

Second Wives [like flashy brands] because they have to display that their man is dedicated to them. They lead very insecure lives. They are not independent and need to advertise the fact they have a sponsor.

Much more in the Huffington Post

Tom Doctoroff is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.

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Companies better in targeting Chinese consumers - Shaun Rein

Image by Getty Images via @daylife

It took them a while, but luxury brands are becoming better in targeting the Chinese consumer, especially the young women, says Shaun Rein in CNN. One of the side effects: more work for Chinese models.

"People are savvy now, they dress to impress," said Shaun Rein, managing director of CMR, a company that closely tracks China's luxury consumption. "Everyone knows someone who was a pig farmer who now drives a Mercedes." 

"Companies are no longer saying, 'whatever works at home will work in China,'" Rein said. "Luxury companies want to create an emotional connection with Chinese consumers, show respect and set themselves apart. So they're trying to feature models who Chinese consumers will aspire to."... 

In China, companies are focusing on targeting a younger demographic that is spending their cash at home.
"To increase their sales, companies are targeting younger women, for example, a secretary making $800 a month but hoping to purchase a $1,000 Gucci bag," said Rein of CMR. "They'll save three or four months of their salary to buy an item."

Despite their limited spending power now, experts predict that winning Chinese customers' attention and trust when they are young will pay off.

Much more about the Chinese models in this article in CNN

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Shaun Rein by Fantake via Flickr

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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Nike shifts focus to China for sales - Shaun Rein

Image via CrunchBase

Nike, the world's largest manufacturer of athletic shoes, is shifting its attention for sales to Asia and especially China. With success, tells Shaun Rein BusinessWeek:

Chief Executive Officer Mark Parker is counting on China and emerging markets to provide the most growth over the next five years as Nike gets 65 percent of sales outside North America. The company has widened its lead in China over Adidas AG by expanding in cities beyond Beijing and Shanghai, said analyst Shaun Rein.

“As consumers are getting whttp://www.china-speakers-bureau.com/profiles/940592.htmlealthier here they are buying special items for the gym, for the weekend, for going out,” Rein, managing director of China Market Research Group in Shanghai, said in a phone interview today. “Nike are doing the best because they have the best brand loyalty.”

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Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or 

Shaun Rein by Fantake via Flickr

conference? Do get in touch. 

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