You’ve heard of eco-tourism, and experience tourism? Well, in a report entitled “Around the World” (link to follow) HSBC has identified yet another sub-niche in the industry: accessories tourism, or the tendency of consumers from the emerging markets to plan their trips according to where the handbags are cheapest.
According to the HSBC report, there are “increasing incentives to travel from an economic standpoint as purchasing power and currency fluctuations can play an important role as well as relative price positioning”.
OK, we all knew this was true to a certain extent: all those lines outside Louis Vuitton in Paris full of non-Parisians clearly meant something, but according to the report, this is less about status (the chic of buying from the point of origin) than economic intelligence (the savings involved). And it has reached a critical mass that is pretty hard to ignore.
To wit: Chinese tourists are now the “third biggest spenders in the world” (Germans and Americans are first and second) but – and this is crucial – of the spending by Chinese visitors, “32 per cent of their budget” went on shopping. This is a bigger chunk than these tourists put towards on hotels or dining, and more than German or American visitors spend on stuff. As to why, well, exchange rates play a part, but taxes and duties play a bigger role.
Consider the following nugget from the report: last year, half of all handbags and 75 per cent of watches sold in Hong Kong were purchased by people from mainland China, and the savings in taxes and duties between buying in HK and buying in the mainland actually off-set the price of the plane ticket. Also popular, apparently, are watches in Switzerland, and iPads in the US.
And this isn’t limited to Chinese travellers: in Florida, “Brazil has overtaken the UK” as the source of the largest group of tourists, but those Brazilian visitors “spent close to twice as much as British tourists” on products, partly because a $100 pair of sneakers in the US could cost $300 in Brazil. Meanwhile, according to a survey on business improvement to New York’s Madison Avenue district, Brazilians are the district’s number one customers, followed by British visitors and then by Chinese tourists. It’s not about souvenirs; it’s about savings.
What does this mean? Well, HSBC concludes that “up to 50 per cent of sales of luxury goods in western Europe are generated by foreigners” and, in fact, “global travel could generate as much as 30 per cent of total sales of luxury goods.” Let the shopping safaris begin.
Luxury 360 – FT