Why Chinese New Year is Emerging as a Major UK Retail Opportunity

Why Chinese New Year is Emerging as a Major UK Retail Opportunity Image credit: Image credit: Marbury / Shutterstock.com

Bold brands may venture into China’s intimidating market but it’s not essential to have a local presence in China to take advantage of the opportunities from Chinese customers. Chinese visitor numbers to the UK are strong and there are also lots of Chinese expats in the UK who will mark Chinese New Year away from home. That’s two groups of Chinese consumers who are known to have high disposable incomes and are likely to be in the UK at what’s traditionally a high-spending period.

There’s evidence that Chinese spending in the UK is on the rise. There’s been talk for many years about relaxing visa rules for Chinese tourists to the UK and this now seems to be happening.

There’s also a strong trend for wealthy Chinese citizens to exit the country altogether, usually choosing to relocate to perceived safe havens such as Australia and the UK. Whilst this super wealthy group tend to be very international in their outlook and are hard to pin down in any one location, they are a high-spending segment wherever in the world they land at Chinese New Year – including the UK.

Tourist traffic

It’s really common for Chinese citizens to mark major domestic holidays with a trip abroad, particularly during New Year when most people have a significant amount of leave from work. And it’s good news for retailers that shopping is the preferred holiday activity for 80% of Chinese travellers. These tourists generally stay longer than a week and spend over £2,600 on average.

RELATED: How China Has Influenced the Rising Trend in Cross-Border eCommerce

There’s been huge growth in tourist volumes from China in the few years since 2012. During this period visitor numbers more than doubled, with more than half a million Chinese tourists coming to the UK in 2017.

Chinese visitors are now responsible for an estimated 25% of all tax-free spending in London’s West End, an area which includes major shopping destinations such as Oxford Street and Regent Street.

Selfridges hold annual in-store events for Chinese New Year, promote tax-free shopping for Chinese customers and offer free personalisation services for a week during Chinese New Year. Image credit: Willy Barton / Shutterstock.com

The most active times for festival-related spending is the Labour Day holiday (also known as ‘mini Golden Week’) at the start of May, at Lunar New Year (the date varies but is always in the first two months of the year) and Golden Week in October. There’s more likely to be a flurry of tourist visitors to the UK from China during these periods.

Expat shoppers

It’s not just short-term holidaymakers that are hitting the UK’s shops during Chinese holidays. There are also many expats, particularly students, that are based in the UK on a longer-term basis. Around 100,000 Chinese students are thought to study at UK universities and it’s thought their average disposable income could be as high as £1,500 each month.

There’s also a small group of expats with extremely high net worth who have chosen the UK as a base using so-called “golden visas”. Whilst this isn’t a large number of people, large numbers aren’t required to keep luxury stores open.

The increase in the number of Chinese residents opting for this visa type reflects a wider trend of Chinese interest in the UK for a variety of reasons, whether it’s a passing visit or a permanent residency.

We know Chinese people are particularly likely to invest in UK education for their children at either school or university level, and there’s a lot of investment in property. Chinese buyers tend to favour new build properties. Outside London, Manchester, Liverpool, Birmingham and Edinburgh are all popular choices.

This doesn’t necessarily mean they’ll become long-term residents (and shoppers) in these areas, as many are buying for investment purposes.

Missing home

Being away from home gets particularly emotional around holiday seasons. This can correlate to higher spending around the festival periods for UK-based Chinese. Chinese residents abroad tend to be highly discerning about what they buy – but they also tend to appreciate a bargain.

That means offers and discounts work. Not unreasonably, Chinese buyers in the UK expect to be able to access things they couldn’t get back home so exclusivity is a good selling point.

Remember that anyone based a long way from home is likely to be communicating with those left behind, particularly during holiday periods when the family would usually get together.

You can support this in various ways. For example, WhatsApp chose to create dedicated stickers to help people write their new year greetings. Chinese buyers in the UK tend to talk about their purchases on social media so finding ways to support that can boost your brand overseas with minimal effort.

Midsection of couple with shopping bags in city

Personalisation services are great at making your products feel special, especially if they are gifts for friends and family who don’t reside in the UK.

Hopefully, by now, all brands know to avoid the lazy efforts to adapt designs for Chinese audiences that have embarrassed the likes of Nike, Burberry, and Victoria’s Secret.

It’s important not to overdo the classic symbols (2020 will be the year of the rat) or use them in a thoughtless or tacky way, or overdo the colour red. The overall design and aesthetic still matter, and Chinese audiences are sensitive to stereotyping and crass use of oriental designs.

If you can get your proposition right, Chinese New Year can be a lucrative period for your brand whether you’re active in the China or just want to engage with Chinese consumers in the UK. With high-spending Chinese expats, tourists and students likely to be in the shopping mindset at this time of year, it’s important to be prepared.

Written by Demetrius Williams
Demetrius Williams
Demetrius Williams is a Digital Marketing Specialist at TranslateMedia and has previous eCommerce experience working with a number of luxury brands in the fashion and beauty industry. He enjoys photography, binge-watching Netflix and can often be found roaming around London with a camera in his hand.

Related posts

Subscribe to our newsletter