Southern California Retailers Benefit From Chinese Tourism Boom
Despite signs that the Chinese economy slowed down this summer, Chinese tourism in California is skyrocketing, and retailers are making efforts to make sure the tourists’ sightseeing includes spending a lot of money at the mall.
Leading retail centers Beverly Center in Los Angeles and South Coast Plaza in Costa Mesa, Calif., recently posted profiles on Weibo, China’s most prominent blogging and social-media site. As with everything else in the Chinese consumer market, the potential is big. Weibo has more than 503 million registered users.
Both retail centers’ Weibo profiles highlight what is new at the malls. For example, the South Coast Plaza Weibo site recently featured news of the luxury center’s new Brioni boutique. Social media is just the latest step in increasing outreach to Chinese tourists. More than 100 stores in the Beverly Center accept China UnionPay, the dominant bank-card organization in the People’s Republic of China. If some of the retail center’s retailers won’t accept China UnionPay, tourists can use the card to purchase Beverly Center gift cards. South Coast Plaza retailers have reportedly been accepting China UnionPay for the past few years.
Susie Vance, Beverly Center’s marketing and sponsorship director, said the Chinese tourist dollar is becoming dominant and increasingly crucial for the mall, in which 30 percent of its consumers are reportedly tourists.
“When Chinese visit, they are often buying gifts. Over 90 percent say they are coming here to shop,” Vance said.
Chinese tourists do a lot of luxury shopping in the U.S. to avoid the huge tariffs levied on luxury goods in China, said Christine Lu, co-founder and chief executive officer of Affinity China, a lifestyle platform for affluent Chinese travelers. Affinity China maintains offices in Shanghai and New York.
Tourism has long been an important part of Southern California’s retail business. Over 30 years ago, South Coast Plaza mounted an outreach campaign to Japanese tourists when that nation’s economy was skyrocketing. Lynn Liou, publisher of Phoenix International, a bilingual Mandarin and English luxury lifestyle publication for Chinese in the United States, said South Coast Plaza has been a leader in cultivating Chinese business. “They were the first to encourage their retail outlets to hire Chinese-speaking staff and introduced [China] UnionPay as an accepted form of payment long before other retail destinations,” she said.
Chinese tourist dollars are rivaling the leading consumers in this business, who are still the Japanese.
The Chinese visitor spends more than $1,300 per day in Los Angeles. That figure follows the Japanese visitor, who spends $1,761 per day in Los Angeles, said Susan Lomax, vice president of communications for the Los Angeles Tourism & Convention Board.
Chinese consumers shop for brand names, especially luxury brand names. Accessories and purses rank high on their shopping lists, Lomax said. “They have a huge affinity for all things Hollywood, and they love the Lakers, especially Kobe Bryant,” she said.
More are coming. In 2006, Southern California had 110,000 visitors from China. In 2013, 530,000 are forecast to visit. Over the next 10 years, more than 100 million Chinese will be issued passports for the first time, according to China Affinity’s Lu.
While attention to the Chinese tourist business is relatively new, few U.S retailers and mall managers are doing a great job in cultivating long-term business, Lu said.
“While engaging group-tour companies and Chinese tour guides is an effective short-term strategy for reaching Chinese tourists by the bus loads, I have yet to see any real effort in developing a strategy to engage the independent Chinese traveler, who, in many cases, spends more money, stays at a destination for a much longer time and is more likely to be a repeat visitor,” Lu said.
To build Chinese business for the long term, Lu recommended hiring a person or team to independently scout for and cultivate opportunities in China. She suggested this team be an integral part of a retailer’s business. “There is a lot of confusion in these companies as to how to allocate and effectively measure the impact of the Chinese consumer,” she said. But the results are undeniable. A $50,000 print ad in a glossy fashion magazine distributed in China can result in sales in Shanghai and here, Lu said.