Getting ready to welcome back Asian tourists to our stores

One of the biggest opportunities for European retailers to grow revenue this year comes from high spending Chinese tourists. Everyone I speak to is really excited by this prospect.

Here are some of my thoughts on what we can do as an industry to make the most of this, and on what we’re learning as we start to see them return in-store again.?

What are we seeing?

In January, China reopened its borders to international travel after almost three years of confinement, relaxing its zero-Covid policy. Chinese citizens can now apply for visas, passports, and once again enjoy long-haul travel to Europe. Airlines are busy increasing their seat capacity to meet the increased demand for international flights and arrivals forecasts are showing an upward trend.

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We’re already seeing the return of Chinese customers to our European markets following the opening of China’s borders and easing of restrictions. It’s gradual now, but I expect this to accelerate from the summertime, with a further boost around this autumn’s Golden Week.

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Our latest February 2023 payments data shows a significant increase in Tax Free sales of almost 31% to Chinese shoppers compared to January 2023, with the Average Transaction Value (ATV) also rising from €1,195 to €1,415. They’re back in Europe and spending!

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Before the pandemic Chinese tour groups featured strongly across Europe, generating significant sales for retailers. This is reflected by the fact that 70% of Citrip’s bookings to Europe across the first half of 2019 were for tour groups.

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With group travel being extended to cover an additional 40 countries from this week, including Switzerland, Denmark, France, Greece, Iceland, Italy, Portugal and Spain, I’m expecting this to further boost outbound tourism from China to Europe. Like many others, I’m also hoping to see other European markets added soon, but it’s still a good sign that the authorities are prepared to offer a wider choice of destinations for Chinese citizens.

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The restriction on group travel has swung the balance to individual travel. I’m interested to see how this mix changes as group travel becomes available again, and what this means for spending patterns. Groups can offer potentially higher levels of footfall for retailers with the group members usually following the shopping behaviour of the group leader.

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EU countries are also increasingly easing Covid restrictions for travellers from China. France has already lifted its PCR testing requirements and other EU countries are expected to follow. I feel this will make it easier for people to travel freely and encourage more visitors. ?

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It’s great news for retailers and we’re looking forward to seeing Chinese tourists again in Europe in larger numbers and spending freely.

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How might this play out?

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While there’s air of positivity, I think there are still some uncertainties. The Chinese authorities still need time to process all visa and passport applications, and airline seats must be available before a flight reservation can be made. The political landscape is unpredictable and can change quickly, and ticket prices for flights are still high.

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It will take some time to return to 100% seat capacity vs. 2019, but the signs so far are good with predictions showing a return of between 50% to 75% of capacities, with a first acceleration happening as soon as in Q2!

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Where are the Chinese going?

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This month, our data shows that China has now moved into second place behind the US in the top 10 list of source markets for Tax Free shopping in Europe. This shows how quickly growth has returned following the resumption of travel and easing of all Covid restrictions.?

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Our most recent data also shows that France leads the way with a 49.1% share of Chinese Tax Free sales-in-store (SIS) across Europe. The next largest markets are Italy (15.1%) and Germany (12.2%), but France currently remains the clear destination of choice for Chinese Tax Free shoppers, as it has been for much of 2022, with Paris leading the way.

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Judging by these current trends, retailers in France, Italy and Germany are likely to benefit the most, with sales evenly split between department stores and luxury stores.

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Looking even further ahead, the 2024 Olympics in Paris is likely to attract an international business and premium clientele who may spend more on the overall experience, including hospitality. They’ll be keen to discover new stores, providing a boost for French merchants.

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What does this mean for shopping?

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While the Chinese want to travel again, I think it’ll be a lot different compared to 2019.

Last week, I had the pleasure of attending a VIP event we’d organised for our customers and partners at our Paris office. We looked at the return of Asian and in particular, Chinese tourists, to Europe and the steps retailers can take to maximise the growth opportunity

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We spent a lot of time discussing this at a round table and it was fascinating listening to the views of ShengLiang Yang , Co-Head Europe, 银联 and Emmanuel Suissa , Chief Partnership Officer, Printemps , particularly about how we evolve the purchasing process to meet the needs of this better educated audience.

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Payments was a hot topic. Chinese customers have their preferred ways to pay: China UnionPay, Alipay and WeChat Pay all feature highly on the list of essential payment methods to attract them in-store. And even in this digital age, it still pays to promote these payment methods on the storefront and on your terminals – stickers still work!?

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Retailers also demand the very latest in Tax Free too, so they can take out any friction during their shopping experience. Our goal should be to make payments easier and to simplify and digitise the Tax Free process, from issuing to validation and refund. Chinese customers, like others, value choice, convenience and speed. Get it right and they’ll post positive reviews.

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It’s a chance for us to shine. What a great opportunity to showcase the best retail has to offer for Tax Free, blending e-commerce with the in-store experience to add moments of quality and a feel-good connected commerce experience.

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Many Chinese tourists start to plan their shopping before they leave. We can now use our connected technology to allow customers to begin their shopping journey online at home, and then offer them a choice of collection point with Click & Collect or Delivery at store or at their hotel. It’s a great way of growing revenue by promoting and up-selling goods as they’ll spend more time browsing while in-store.

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Luxury retailers have a great track-record in pushing the boundaries and amazing their customers. I see this as an ideal opportunity to blend online and in-store into one seamless omni-channel Tax Free shopping experience that builds loyalty and repeat business.

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We’ve seen the progress retailers are making with e-commerce, with our latest Planet benchmark which studied 100 French brands on their e-commerce capacities. And with the Paris Olympics to look forward to in 2024, it’s a great opportunity to stand out from the crowd.

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Why not use the browsing, shopping and payments data to provide deeper insights that super-charge your loyalty programmes so you’re able to better recognise and welcome your Chinese customers back to your stores when they return to France next year!