Lunar New Year, or the Festival of Spring, has long been the main celebration for the Chinese community in London each year. This Sunday, 22nd January, the spectacle at Trafalgar Square with the iconic lion’s parade, music, dancing and entertainment, will be a moment of tremendous joy as well as a riot of colour in a rather chilly, grey London January. Perhaps it feels especially celebratory this year, coming on the back of a loosening of the Covid-19 restrictions in China itself and the relaxation of the ban on international travel. I hope many Chinese families living in the UK will be celebrating with relatives who are finally able to visit after such a prolonged and painful period of separation.
As I’ve walked around London’s luxury centres in the West End, Sloane Street and Knightsbridge over the past few weeks, it’s also been rather nice to spot some of the special collaborations and limited editions that Walpole members have created to mark the Year of the Rabbit. The zodiac sign of the Rabbit is a sign of peace, prosperity and longevity in Chinese culture with 2023’s Year of the Rabbit predicted to be one of hope. As a creative device, the particular cuteness of rabbits hasn’t gone unnoticed by brands, creating products that not only mark an occasion of significance for the Chinese but also cross borders and cultures with the power to bring us all together.
Mulberry’s collaboration with Miffy has enormous charm – it’s witty, collectable and celebratory. Burberry’s playfully chic re-imagining of its Thomas Burberry logo works as cleverly on its successful signature Lola bag as it does on ready-to-wear or on its Scottish cashmere scarves. At the affordable luxury end of market, open a box of Biscuiteers delicious hand made and hand iced lemon biscuits and you’ll find a splendid Chinese lantern, a lucky red envelope and a very sweet rabbit. And Walpole member the London Philharmonic Orchestra will perform the UK premiere of Tan Dun's Buddha Passion at the Royal Festival Hall on Chinese New Year’s Day, 22nd January. Conducted by the award-winning composer himself, Buddha Passion combines the ancient music of Dunhuang, Chinese folk songs and Western symphonic music, bringing to life the theme of the Silk Road and the spirit of cultural exchange and mutual learning.
That sense of hope marked by the advent of the Year of the Rabbit is shared by luxury brands for whom the affluent Chinese visitor is an important customer group. Pre-Covid in 2019, 883,073 Chinese visitors came to the UK, spending £1.71billion, according to Visit Britain data. With the re-opening of borders, the question on every luxury brand’s lips is whether they’ll return in the same numbers – and return to pre-pandemic spending habits.
In the UK, the optimism around the return of such a significant luxury consumer group is tempered by concerns around the impact of the abolition of tax-free shopping on such a price conscious customer.
Brands have already noticed how this has affected the behaviour of other key high-end visitor groups. In answer to a question on VAT RES on Burberry’s earning’s call yesterday, the company's COO & CFO Julia Brown said that US tourist spend for the brand was up 102% in continental Europe, but only 14% up in the UK and for the Middle Eastern customer, spend was up 122% in continental Europe, but only 14% in the UK. For both groups that’s a significant shift - the allure of buying British in Britain seems to be very much dulled when one can buy British tax-free in the brand’s store in Paris or Milan - and the impact on skilled retail jobs in the UK’s big cities and on the manufacturing jobs in the regions which are supported by strong spending by high-end visitors is obviously a key concern. Walpole will never give up doing all we can in the fight to bring back the VAT RES scheme.
Incidentally, if the scrapped re-introduction of tax-free shopping has affected your business, our public policy team would love to hear from you for their upcoming pre-Budget conversations with the Government. Please email them here.
Talking to member brands about their hopes for their businesses in the light of the reopening of China’s borders, the consensus is that the high end visitor from China won’t return to Europe in significant numbers until the second half of 2023, not least for practical reasons of the availability of flights and the renewal of expired visas. But come they will. According to research group Agility, travel has been named by affluent and HNW Chinese as their top personal passion since the start of the pandemic, and the removal of restrictions will unleash a major wave of “revenge travel” to rival the “revenge spending” observed here in April/May 2020. What’s more, Agility notes that the US, the UK and Australia lead bookings for long-haul trips, which is an encouraging sign of the continued appeal of this country.
Lunar New Year is a timely opportunity to show high-end Chinese visitors how warm the welcome is that awaits them in the UK, whether in our cultural institutions, in luxury retail brands or in hospitality. But it must only be the beginning of a concerted mission to be properly ready for visitors coming in much greater numbers as we hop through the Year of the Rabbit. Habits on both sides will have changed during the long absence. Luxury brands in China have been very active in honing their offer to local customer’s needs, with consequent and significant changes in expectations. Let’s be ready to meet and to exceed those expectations.
Yours sincerely,
Chief Executive, Walpole