One of the most consistent themes in the world of luxury watches today is the importance of the Chinese market. I have written about it here, and mentioned the importance of this market both domestically, and in terms of the tourism dollar. You get the feel of it even ‘on the ground’ here in Sydney, and it seems that the PRC outbound tourism dollar is going, as expected, from strength to strength, with 2011’s spending expected to reach some US $55 billion, according to the World Tourism Organisation.
In 2010, Chinese tourists took just over 57 million trips, spending US$48 billion. They are now the world’s fourth largest spenders in international tourism.
According to the China Tourism Research Institute, the total number of trips for 2011 is expected to be about 65 million. Outbound tourists numbered 10.4 million in 2000, 31 million in 2005, and 57.4 million in 2010. With the number of tourists estimated to reach 100 million by 2020, this means that Chinese outbound tourists are the fastest growing market for international tourism expenditure.
The reason for this? Relaxing visa restrictions, a strengthening yuan, and better prices and selection for luxury goods are some of the major factors pushing outbound Chinese tourism. This growth has made mainland Chinese tourists among the most coveted international tourist demographics in major destinations.
Earlier this month Richemont, the world’s second largest luxury group, announced that it is going to develop a 2,250 sqm luxury watches mega store in Paris directly targeted at Chinese tourists. Estimated for completion by Christmas 2012, the group’s investment of 70 million Euros shows both their acknowledgement of the importance of this market, and their faith that the numbers can only go up. How it will pan out with regards to the availability of models (will the mega store get priority?) will be interesting to see.
So what about Australia?
According to the Australian Bureau of Statistics, visitors from China for the first nine months of 2011 jumped 23%, nearly offsetting losses from the US (-10.6%) and Japan (-16.3%), and Tourism Australia recently noted that in 2010, the China market brought in $3.26 billion (US$3.37 billion).
If Australia continues to remain an attractive destination, this figure is expected to reach between AU$7 to $9 billion by 2020. That many tourists are here simply to shop is not lost on many, and the Australian tourism bureaus have noted that both a shortage of Mandarin-speaking guides and that some retailers have been slow to employ Mandarin-speaking staff, are issues that need to be addressed.
From my own observations, the Chinese tourism dollar is already an important one in the luxury watch market in Australia, and a number of major retailers do have bilingual staff, but what do the stats say about the current state, amidst this year’s international economic woes, about the Swiss luxury watch market in Australia?
According to the FHS: Federation of the Swiss Watch industry November 2011 report on the world distribution of Swiss watch exports, Australia is ranked at 19. Interestingly the value in millions of CHF has gone down over the last year. The figure was 13.3 million CHF in 2009, 17.1 million in 2010 and 16.6 million at the date of this report for 2011 i.e. -2.9% for 2010/ 2011, but +24.5% for 2011/ 2009.
For Oceania as a whole :
Value in CHF 13,816,010
Value in CHF 18,597,571
Value in CHF 17,559,772
In percentage terms:
1. 2010/ 2011, units were -36.2%, and value in CHF -5.6%
2. 2011/ 2009, units were -3.9% and value in CHF +27.1%
Food for thought.