Still Ravenous for Designer Brands, Chinese Tourists Proving Savvy Shoppers

      October 15, 2011 08:21

      As the numbers of Chinese tourists heading to Korea continue to grow by leaps and bounds, their spending trends are also changing. They have changed to become more selective shoppers, paying careful attention to products' country of origin and carefully cross-checking prices.

      Industry insiders said the Chinese are increasingly revealing their much-touted characteristics as born merchants as they acclimatize to Korea's shopping culture. As a result, they seem to be getting thriftier and more sensitive to information about sales than Korean customers.

      Chinese visitors get in a bus after shopping for Korean products on Oct. 3. /Newsis

      ◆ No More Sweeping

      According to the immigration office at Incheon International Airport, a record-high 53,342 Chinese tourists entered the country during China's National Day celebrations from Oct. 1 to 7. This marks an 18 percent increase from last year. At Lotte Department Store, sales made using China Union Pay, China's top cash and credit card, jumped 261.3 percent from the same period last year in those seven days. Hyundai Department Store saw an even bigger rise in profit as comparable sales more than tripled.

      Insiders said that while sales rose quantitatively, the key difference was in their shopping habits. Unlike in the past when they tended to buy everything in sight, now they first check the price differences back home and in other countries before making purchases. Their brand preferences are also shifting away from an exclusive devotion to Chanel and Louis Vuitton to include various luxury watchmakers and brands of jewelry.

      "They used to buy watches without asking any questions, but nowadays more people request a discount, saying they bought similar items at lower prices in Hong Kong," said an employee at Avenuel, Lotte Department Store's premium brand shop in Sogong-dong, Seoul.

      A majority of Chinese shoppers also seem to become more conscious about products' country of origin. A survey of 1,100 Chinese customers of luxury brand shops by global marketing research firm Albatrose Global Solutions found that 84 percent of them cite country of origin as the most important factor when shopping.

      "They don't just blindly pick up any foreign imports," said an employee at Lotte. "They check where they came from and purchase those made in countries like Italy or Korea."

      ◆ Merchant Mentality

      The travel industry is also reeling at the Chinese merchant mentality. They say customers from cities like Shanghai, Beijing and Shenzhen understand the profit structure of Korean travel agencies better than Koreans.

      "As Chinese visitors are increasing, package tour groups are starting to negotiate the cost of a tour beforehand," said one travel agency insider. "Duty free shops give travel agencies a 15-percent commission, at most, depending on prices and what items tourists purchase, and more Chinese tour groups are now asking us to give them the commission."

      "Until five years ago Chinese tourists had just followed a travel agency’s itineraries without any complaint, but as younger tourists in their 20s and 30s are on the rise these days, more collect travel information through the Internet and ask travel agencies to include what they want to see," said Seo Dae-hoon of the Korea Association of Travel Agents.

      "Moreover, travel agencies are willing to do anything to attract Chinese tourists because competition is becoming cutthroat as many new businesses join the industry," he added.

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