UK urged to ease up on visa curbs
Updated: 2015-05-04 13:12
By MATT HODGES(China Daily)
Michael Ward, the managing director of the upmarket London department store Harrods, is lobbying authorities to remove roadblocks that hinder travel from China to Britain.
This comes as a clampdown on graft has caused luxury sales in China to sag while the consumption patterns of Chinese shoppers shift at the London store.
Ward said he thinks revenue would be higher for all British retailers if visa issuances for Chinese tourists were brought into line with the rest of Europe.
He has even proposed paying for a customs officer to have a post at Harrods so Chinese visitors do not have to wait in long lines at Heathrow Airport to reclaim their value-added tax before flying home.
The market is not insignificant. Reports show that Chinese conduct about 60 percent of their luxury shopping overseas, where they can avoid huge import tariffs and access exclusive products.
Harrods claims to account for 20 percent of their retail purchases in England, and Ward wants the pie to be bigger for everyone.
"China is now our biggest market. It's been growing for us by about 50 percent per annum for about five years. If I go back seven years, China was a fifth of America. Today, China's five times America in terms of our turnover."
Talking of spending patterns by Chinese shoppers at Harrods recently, Ward said: "We've had a little bit of a hiccup last year, but growth has still been exceptionally quick. We've seen multiple purchases going to single purchases, so we're now going back to intrinsic demand for the product as opposed to some of the old gift-giving.
"People used to buy five or six watches. Now they're buying one for themselves. That's a positive for industry and positive for us to have a very solid platform for growth."
Chinese are not the only national group Harrods has been seeing a lot more of in recent years.
Mohamed Al Fayed sold Harrods to Qatar Holding, the investment arm of Qatar's sovereign wealth fund, for a reported 1.5 billion pounds ($2.2 billion) in 2010.
Since then, Middle Eastern shoppers have become its No 2 revenue stream. Thais are the No 2 spenders from Asia, beating Japanese, South Koreans and Singaporeans.
But Chinese tourists fork out almost 650 pounds on average at foreign high streets but 4,000 pounds per spend at Harrods, according to a study last summer by the online booking site hotels.com and information supplied by Harrods.
"We get all the exclusives and exotics, and that's why the Chinese customer loves us," Ward says, citing as an example crocodile-skin products from Louis Vuitton that the store has a monopoly on.
Ward's efforts do not end there. He was in Shanghai with Prince William in March to promote British luxury brands and businesses abroad.
Before visiting Shanghai, Ward was in Beijing and Seoul taking cues from leading Asian retailers such as Sinsegae department store of South Korea.
"I used to go to America for inspiration. I now every year come to the Far East, literally because I see more innovation," he says, adding that Harrods is in the process of refurbishing one of its rooms.
"One of the concepts that we saw out here will be an essential part of it. It's how you create private areas in a room to engage with the customer. I saw it in China and in South Korea. Different, but we'll adapt it and make it British."
Early engagement with WeChat, Tencent's hugely popular mobile networking service, was another tactical move in Harrods' battle to win over social media-obsessed Chinese consumers. Harrods was the first big British retailer to open a WeChat account, Ward said.
"We have twice as many followers as our nearest-competitor department store on Twitter, on Facebook and on Instagram, so for this old fuddy-duddy brand we really embody all of this modern technology and social media," he said, adding that Harrods is the seventh-most Instagrammed building in the world.