Chinese Tourists' Luxury Shopping Habits See Post-Pandemic Shift

25.08.2023 - 14:25 / skift.com / Louis Vuitton

An end to China’s travel curbs this month is expected to revive demand in the global luxury retail market, which has been starved of mainland visitors for three years, but many consumers now see more reasons to do their high-end shopping locally.

Share prices of global luxury brands jumped last week after Beijing announced it would loosen travel restrictions from Jan. 8, effectively allowing Chinese tourists to once again flock to global shopping hubs from Paris to Tokyo.

However, analysts and luxury brands warn they are unlikely see an immediate return to pre-pandemic levels of Chinese travellers with airlines yet to fully resume operations and local prices falling. Just as importantly, big luxury brands are now investing more in the shopping experience in China.

One Shanghai shopper, surnamed Mao, said that she had visited boutiques around the world for years, but now believes she gets the best service in China.

“When I would go to Paris, I couldn’t ask the Paris sales people to keep a bag for me, but now here we can,” she said.

Before the pandemic closed borders early in 2020, Chinese shoppers bought 70 percent of their luxury goods abroad.

Under pandemic travel curbs, China’s domestic luxury sales boomed, doubling to 471 billion yuan ($68.25 billion) from 2019 to 2021, according to Bain & Co. Even so, Chinese consumers’ share of the global market fell to 21 percent in 2021 from 25 percent in 2019.

“It won’t go back to 70 percent,” said Jonathan Yan, a principal at consultancy Roland Berger in Shanghai. “I’m sure there will still be a portion of luxury spending happening in other countries, because it’s natural people like to shop when we travel, but it will be more like 50-50.”

Many luxury companies such as LVMH’s Louis Vuitton and Coach-parent Tapestry doubled down in China over the past three years, opening new flagship stores and hosting large fashion shows to reach consumers unable to go abroad.

This helped local staff cultivate relationships with China’s VIP customers, who previously preferred to shop overseas.

Research conducted by Hong Kong-based consultancy Oliver Wyman showed 70 percent of China’s luxury consumers used sales assistants to facilitate purchases while 40 percent communicate with sales staff at least once per week.

Oliver Wyman’s Kenneth Chow says that half of Chinese consumers who bought luxury in 2021 were doing so for the first time.

“It will be interesting to see how new luxury consumers will perceive the difference between domestic and overseas luxury shopping,” he said.

International travel restrictions and local policies to spur spending also drove many consumers to China’s tax-free island of Hainan as a luxury shopping destination.

In 2021, Hainan accounted for 13