Based on a recent report by Global Blue and Gusto Collective, it has been found that 76 percent of Chinese luxury shoppers surveyed are willing to travel internationally in 2023, indicating a strong desire to reconnect with the world. However, the main challenge that remains is the limited air capacity from China, which is currently operating at only 22 percent of the flight capacity seen in 2019. As airlines and authorities work to increase capabilities, it may take a few months for outbound international flight routes to fully recover and meet the pent-up demand for luxury goods shopping in global destinations.
These projections bring hope to the prime shopping destinations around the world that were previously frequented and supported by Chinese shoppers. Prior to the COVID-19 pandemic, Chinese shoppers were the top global tax-free shoppers in 2019, totaling 4.25 million shoppers who spent an average of €1,600 per shopper, compared to €950 for other nationalities, as reported by Global Blue. Chinese travelers spent a total of €6.7 billion on tax-free shopping in 2019, accounting for 33 percent of the total in-store sales.
According to the report, France is the most desired destination in Europe for Chinese shoppers, while Japan takes the top spot in the Asia Pacific region. However, the patterns, values, and motivations of Chinese consumers have changed over time. Young, optimistic, hyper-connected, and savvy shoppers are now leading the way, with an increased appreciation for their own heritage, aesthetics, and brands, alongside western luxury and the “guochao” trend.
Duty-free shopping remains a significant incentive for Chinese shoppers, as luxury goods can be significantly more expensive in mainland China compared to other regions, ranging from 15 to 45 percent higher. In the past three years, very important customers (VICs) and high-net-worth individuals (HNWIs) in China have played a crucial role in supporting the luxury industry by purchasing luxury goods domestically despite the higher prices.
Chinese travelers have a strong appetite for novelty, and they have high expectations for experiences and seamless integration. “China’s retail and digital landscape have continued to evolve and transform in a truly unique and innovative ecosystem,” says Chloe Reuter, founding partner and vice chair of Gusto Collective. “For brands to reconnect with Chinese consumers, it requires a deep understanding of their motivations and engagement drivers.”