China represents a “truly enormous opportunity” for fashion retailers, and will only become more important, Michael Ward has said.
Speaking at Drapers’ Fashion Summit, the managing director of Harrods told delegates China was now the department store’s largest export market. Sales to Chinese tourists have gone from a fifth of that spent by US customers, to being five times that of their American counterparts.
“For the doubting Thomases on Asia we are very, very optimistic,” he said.
“We’re starting to see the transition of their economy from being export led to towards consumption, and I think the west has just got to get used to [that].
“It used to be that two-thirds of the growth in the world was generated in developed countries. Now more than two-thirds is from the emerging world. That is going to be life for the future.”
He also forecast that the number of Chinese, and nationals from other Asian countries, coming to the UK to purchase fashion goods will increase.
“At the moment there are over a million millionaires in China. Now there are more millionaires in Asia than there are in the whole of the US. Yet less than 1% of the Chinese has passports. The opportunity is truly enormous.”
Demonstrating the wider trend for emerging markets’ dominance, he revealed that Thailand is Harrods’ fourth export market, Malaysia seventh and Russia ninth. The US, once a core market for UK luxury sales, no longer even features in the top 10.
The government must support retailers in capitalising on these sales opportunities, Ward added.
“Now in the UK we have a small hurdle. We have to persuade the government that our visitors who frequent the most luxurious boutiques in our store, spending over £3,700 each, are not economic migrants, but representatives from the new powerhouse of the world.”
Harrods has been a market-leader in investing to reach out to wealthy Asian tourists, having previously invested in 150 China UnionPay terminals and employing more than 100 Mandarin speakers.