Downturn? Not in first class, say China's globetrotting shoppers
SHANGHAI, Sept 28 |
SHANGHAI, Sept 28 (Reuters) - Rich Chinese tourists paying $40,000 to hunt elk in Utah or booking the entire first-class cabin for a family flight to France show China's economic slowdown has yet to thin the wallets or dull the appetites of its deep-pocketed elite.
China's "Golden Week" holiday, a popular time for overseas travel, starts on Saturday. This year it coincides with the Mid-Autumn Festival to create a rare eight-day break, and visitors to Europe will not be there to get a taste of austere living.
Helen Shen, a travel planner in Shanghai, said a private business owner had booked the whole first-class section of a Lufthansa jet to fly his family of four to Paris this month.
Shen is one of many luxury travel organisers who still see the money rolling in from executives and members of the "fu er dai" - the second generation of wealthy families - despite China's economic uncertainty.
"If you look at your affluent Chinese overseas, they are your tourist, your shopper, your investor all in one," said Christine Lu, co-founder of Affinity China, a Shanghai-based luxury travel firm.
"Even though there is all the talk of a slowdown in China, the luxury sector we are dealing with is a segment that can still afford to travel," Lu said.
This is good news for luxury brands facing the prospect of weaker demand within Greater China as Beijing cracks down on conspicuous consumption at home.
In the rest of the world, rich Chinese tourists are famed for their lavish spending. To avoid steep sales taxes at home, many of them unleash the cash on deluxe goods and premium cosmetics with every stamp of their passports.
"Most of the people who are going abroad already have quite a bit of wealth and buying things overseas is still much cheaper than buying things in China," said Renee Hartmann, a luxury retail consultant based in Los Angeles.
HOW MUCH FOR YOUR VILLAGE?
Tax-free shopping firm Global Blue said in July that Chinese travellers were the biggest spenders in duty free shops, racking up 2.1 billion euros ($2.70 billion) in sales in 2011, up 68 percent from last year.
"The (weakness) of the euro and the pound, plus the post-Olympic effect, is increasing the draw of Europe as a tourist destination and enticing wealthy Chinese to shop in Europe," said You Jinzhang, chief executive of HHtravel, a luxury travel brand under China's top online travel firm Ctrip.com International Ltd.
The firms that sell coveted brands do not see their Chinese customers suddenly discovering asceticism.
Italian fashion designer Brunello Cucinelli, whose eponymous firm sells cashmere sweaters for almost 2,000 euros ($2,600), shrugged off concerns about a slowdown, saying Chinese demand for old-world luxury remains strong.
Some of Beijing's better-heeled are not content with adorning their wardrobes with fine cashmere. Cucinelli told a story of a group of Chinese investors who once visited his company in its hilltop home of Solomeo in central Italy, and were so smitten by the place that they asked how much it would cost to buy the whole village.
"The Chinese love what we do, what we wear. They want to be like us. This is the Chinese century," Cucinelli said.
WINE AND SHOTGUNS
For this year's holiday, most boutique-bingeing tourists from China will still travel to Europe and the United States as those trips were planned months in advance, but the pure shopping jaunts in Asia may take a hit.
"(Overall) sales (for the golden week) can come down by 10 to 15 percent both in Hong Kong and China," said Lam Tung-hing, a general manager in the retail operation of Oriental Watch Holdings Ltd. He cited economic concerns, but also the preference of many shoppers for London, Paris and New York over Hong Kong and Macau.
It isn't just ringing tills in retail outlets that show the upper echelons of Chinese society are immune to the slowdown. Top-end tourists lap up exclusive experiences such as meeting the family of Swiss watchmaker Patek Philippe, or having their genes analysed in Munich.
Affinity's Lu said her company will host a trip for wine connoisseurs to Bordeaux in France, while Luke Song of Hua Luxury will take Chinese groups to race sports cars in Europe.
52Safari, a hunting club that caters to wealthy Chinese, is also having a good year. Scott Lupien, the club's American founder, will run three hunting tour groups this holiday. One couple, heading to the U.S. state of Utah for an elk hunting trip, is paying 250,000 yuan ($39,600).
"This is going to be our best October in four years of business, we have more demand than ever," Lupien said.
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