Knowing your customers is vital, especially the Chinese
It is always wise to know your customers, but in tourist London these days, it would be well to know a smattering of Chinese.
The Tiger economy is continuing to provide enough funds for a rush of Chinese shoppers to the UK capital, outstripping Russians especially in the purchase of luxury goods from prestigious London boutiques.
A study of shopping trends in Mayfair boutiques by consultancy FDKG that helps UK luxury goods businesses to develop a foothold in the Chinese market, found that Chinese luxury goods shoppers are now outnumbering Russian shoppers by a factor of almost 15:1.
Russians, in fact, came fourth in the study, after Chinese (in first place), Americans and Japanese. Fifty-eight percent of luxury goods retailers polled said that Chinese were the most frequent visitors. Only 4% of retailers said that Russians were now their most frequent visitors.
The study underlines the growing importance of the Chinese economy internationally and the Chinese consumer to businesses with international aspirations.
Ken Grant, managing director of FDKG, said: “The strength of the Chinese economy, which is growing at 9% per annum, is now having a measurable impact abroad, with many luxury goods retailers and manufacturers benefiting passively from the enormous spending power of the Chinese ultra-rich. With UK economic growth likely to be fragile for some time, there are huge opportunities available for the businesses that have the wherewithal to enter this incredibly lucrative market.”
Ken Grant suggests that the key to successfully engaging with wealthy Chinese is a close understanding of their requirements. “Businesses that make assumptions will fail to find a market. Accept that across the country the characteristics, habits and idiosyncrasies of high net worth individuals differ, so be flexible in your delivery, and to do so, find a reliable source of information about these people.”
The FDKG study of the ultra-rich in China shows t hat in a culture where mistrust is commonplace, wealthy individuals choose to keep a low profile. They choose, therefore, not to provide answers to any questions unless they trust the interviewer, which makes surveying t hem a little difficult.
Based on a sample of almost 800 wealthy Chinese businessmen and woman earning on average 1,000,000 RMB a year (UK£ equivalent: £100,000), the report includes responses to 67 specific questions about their business ideals and aspirations, their personal spending and saving habits, and their perceptions of the outlook for themselves and their family over the coming years. Those interviewed range from their early 20s to the over 60s, and were distributed across 62 cities in mainland China. Their responses offer a deep insight into the aspirations and activities of the newly monied in China.
Some of the findings include:
· Stock is the preferred investment vehicle.
· 90.9% give money to charity.
· 59% think that an upper class exists in China; 21% think it should exist but does not yet. 91.3% regard the development of an upper class as a positive thing.
· The most popular watch brand is Rolex.
· After Hong Kong, Europe is the next most popular travel destination.
· 98% own property either as residential or investment. Almost half own two residential properties, and some own more than five. 38% own at least one investment property, and 93.3% own up to three investment properties
· 24.8% own domestically made Audi cars, and BMW is the most popular imported car brand.
· One third prefer to drink Dom Perignon Champagne.
· 40.6% are in favour of private education and 18.8% are not.
· After China, the UK is by far the most popular country to send their children to be educated in, twice as popular as the USA.