by Richard Nicoll, Chief Strategy Director at Liquid Retail
As we embark on the Year of the Rabbit, Liquid Retail’s Richard Nicoll outlines how brands can ensure they draw the attention of returning Chinese traveling shoppers in 2023. One of the many things that have changed in the Dubai retail landscape in the past 3 years has been the prolonged absence of inbound Chinese shoppers.
In image above: Richard Nicoll, Chief Strategy Director at Liquid Retail
But in the wake of Beijing’s decision to relax border restrictions – allowing Chinese citizens to once again travel freely to more than 80 worldwide destinations – many global markets are eagerly anticipating the return of affluent visitors from Asia’s biggest economy. Before Covid-19, Chinese travelers topped the international league tables for spending. According to data from Colliers International, total outbound expenditure hit $277 billion in 2018, with the average spend in the UAE sitting at a healthy $1,459 per capita
The UAE welcomed nearly a million inbound visitors from China in 2019. They represented an important and much-welcomed segment and with this lucrative source market reopening its borders just weeks ahead of Chinese New Year, retailers and brands across the UAE are waiting with bated breath to welcome these shoppers back and offer them the best in-store.
Historically, Chinese tourists have tended to spend most in Dubai. In fact, before the pandemic, approximately one-quarter of luxury goods sold in the Mall of the Emirates was purchased by Chinese tourists. Retailers across the UAE will no doubt be looking to pick up where they left off.
Fortunately, the Gulf nation is well placed to cater to renewed demand from China. Its world-famous malls and shopping centres are home to some of the most popular high-end brands on the planet. These are exactly the types of offerings likely to appeal to Chinese consumers on their return to the Emirates, which may go some way to explaining why Statista believes revenue within the UAE’s luxury goods segment will reach almost $2.8 billion this year.
The final countdown
The Year of the Rabbit will commence on 22 January 2023, symbolizing longevity, peace, and prosperity within Chinese culture. UAE retailers will certainly be hoping that the latter proves accurate as they look to entice returning visitors with a range of tailored offerings.
Chinese New Year will be marked by a variety of events across the Emirates. Dubai initiated the festivities through its ‘Grand Parade’ earlier this month, with the help of approximately 2,500 Chinese residents, musicians, and dancers in traditional lion and dragon costumes. Indeed, Expo City Dubai hosted thousands of revelers as they gathered to mark Xiaonian, or ‘Little New Year’, ahead of Lunar New Year celebrations on 22 January.
Within the realm of retail, the Chinese New Year will also coincide with Dubai Shopping Festival, which many hope will offer the ideal launchpad for the months ahead.
A climate of optimism
In 2020, Chinese consumers contributed an eye-watering $12.29 billion to the worldwide luxury goods market – a figure that appears even more impressive given it was registered at the height of the global pandemic. And while the constraints imposed by Covid-19 will have led to some uncertainty in outbound Chinese, it seems likely that many will relish the opportunity to return to UAE outlets in person. With this in mind, expect to see retailers across the Emirates roll out product offerings and sales tailored to the preferences of Chinese consumers.
Retailers and brands looking to capitalize on the potential uplift in sales over CNY should make Chinese shoppers feel at home by using China-specific, language, utilizing China-preferred social platforms such as WeChat for influencer programs, and deploying more personalized marketing strategies as well as supplementing their UAE-specific ranges with the premium and in-demand Western products that this segment has been missing out on at home.
So, while CNY 2023 is certainly a tantalizing short-term prospect for brands and vendors in the Emirates, market commentators are expecting the strongest influx to materialize towards the end of the year. Consequently, retailers that wish to capitalize on the re-emergence of this much-missed source market must run sustained campaigns far beyond 22 January.
Following a lengthy absence from the international stage, inbound visitors from China will be looking forward to the types of world-class shopping experiences only the Emirates can deliver. Retailers that capitalize on this renewed appetite could well find that 2023 proves to be a proverbial rabbit’s foot for their businesses.