Chinese tourist buses used to visit Los Angeles's luxury stores, no longer

Chong Hing Jewelers está visiblemente vacío. El personal que habla mandarín está parado ociosamente detrás de las vitrinas de la tienda de San Gabriel, esperando los autobuses cargados de compradores de lujo de China que tal vez nunca lleguen.

It is the same story at several jewelry doors, in the house of Italy - an empty store and apathetic workers, both say they just arrived from China.

David Lee, president and executive director of Hing Wa Lee Group, who has another jewelry store not far, said that Chinese tourists now represent about a fifth of sales in their jewelry businesses, less than half of previous years.

"I literally had hundreds [of Chinese tourists] with my stores," said Lee."That changed one or two years ago, and now everyone experiences less sales".

The reason: xi jinping.Although the president of China is not a fashion guru, its policies are defining a new luxury goods industry with a vision of the future worldwide.

In the past, Chinese luxury buyers made most of their purchases abroad, eager to avoid internal prices inflated by high tariffs applied to foreign high -end products.

According to an analysis of the BNP Paribas investment company, only in early 2017, luxury items bought in China cost 21% more than its world average.This historic price abyss had led to a flourishing high -end global retail business, since tens of thousands of Chinese traveled abroad with the intention of acquiring Gucci, Chanel and Coach bags on their way through shopping centers in Paris,New York and Los Angeles.The spending on luxury goods of the Chinese abroad, reached 70.000 millones de dólares en 2018, según Bain & Co, lo que representa casi una cuarta parte del mercado mundial de bienes de lujo.

Now these buyers are displacing their expenses to the east.The prices of luxury products in China fell last year after the government reduced tariffs to more than half, of an average of 15.7% to 6.9%.The cuts are, in part, an indirect effect of the commercial war between the United States and China and the demands of President Trump that China reduces barriers to their markets, but they are also part of a broader impulse from China to strengthen theinternal consumption.As the savings of buying abroad are reduced, Chinese buyers are increasingly choosing their luxury purchases at home.Bain predicts that by 2025, half of Chinese luxury expense will take place within China, in front of less than a quarter in 2015.

These changes are already affecting the industry. Tiffany & Co, a menudo considerada un punto de referencia para los productos de lujo, citó la caída de las compras de los turistas chinos como una de las principales razones del lento crecimiento de la marca en 2018.In a profit board in November, the Alessandro Bogliolo CEO said that decelerations in some markets were the result of “lower sales attributed to foreign tourists, particularly the Chinese”.

Many retailers had come to depend on the seemingly endless flows of Chinese luxury buyers to maintain their final results.Jewelry stores and luxury watch stores, such as those located in the shopping centers of the San Gabriel Valley, emerged around the most visited points by Chinese tourists.

"There were many people who came from second and third level cities [in China] and who made huge shopping tours," said Lynn Liou, founder and editor of L'Epired, a luxury lifestyle publication in Chinese and ChineseEnglish."For many of these people, it was their first exposure to the western world and their first time to have access to these brands".

An itinerary of the 2016 tour of the Chinese Travel Site Useitour, entitled Los Angeles Luxury Shopper’s Paradise, included no less than 15 purchasing destinations in a single day.Among them were Rodeo Drive, Melrose Avenue, the fashion district of the center of Los Angeles, the Grove shopping center, Citadel Outlets and the South Coast Plaza shopping center.

Chinese visitors on tours like these have brought billions to Los Angeles, spending almost $ 1.500 million only in 2016, according to the Los Angeles Tourism and Conventions Board (L.A Tourism & Convention Board).This prompted the city to launch the Nihao China program in 2014, a wide plan designed to help Los Angeles companies better serve Chinese buyers.

The initiatives included cultural training and certification courses for workers, websites and marketing materials in Chinese, tourist guide certification programs and a marketing chamber.

The Chinese visits to Los Angeles Count.But then the profits began to decrease.Chinese visits increased around 12% in 2017 and then less than 7% last year.

"You can't maintain two digit growth forever," said Julie Wagner, executive director of the Beverly Hills conference and visitors office."When retailers look at the numbers year after year, it is difficult for them to understand it because it seems that it is falling, but in reality it is just a return to normal after those moments of madness".

In addition to China's national policies, the changing luxury landscape is also being molded by changes in consumer preferences.Although luxury brands do not face the same Chinese competition that has ravaged high -end electronic products.UU, as Apple's iPhone, which has experienced a substantial decrease in sales in China, are forced to adapt their offers to an increasingly sophisticated and conscious audiences worldwide.

According to the luxury consultant Nancy Hsieh, who advises brands on how.

"There is a student who is buying not only for himself, but also for about 10 or 12 friends and family in China," said Hsieh.

Heather Zhu is a graduated student of the USC who was born and grew up in China.In past years, she made a lucrative resale business of bags, shoes and other luxury products to Chinese students throughout the country using Wechat, the most popular social platform in China.His supply was made through contacts in leading brands such as Saint Laurent, which informed him of the discount products that he could resell.Zhu rarely needed large -scale shopping excursions to satisfy his customers, but he was regularly dedicated to making personal purchases to create his own collection of luxury items.

During his student years, from 2014 to 2017, “my friends and I were about to buy [luxury] every or two weeks,” said Zhu."I think they probably spoiled us because our parents gave us a lot of money.".

Zhu said that demand in his resale business has fallen in recent years, since the relative lack of innovation in style among the main firms, as well as changes in Chinese tastes, have left their customers less willing to accumulateConsecrated brands collections.

"Many smaller firms are coming to light and sponsoring influential people in places like Weibo," said Zhu, referring to a Chinese social media network similar to Twitter."That is what interests me now.Those brands are more original.I already have a Chanel bag;I do not need more".

Kathy Smits, Vice President of International Tourism of the Los Angeles Tourism Board, said these changing tastes are modifying the way Chinese visitors relate to luxury businesses in southern California."It's not about‘ get on the bus and visit as many stores as possible, "said Sms."Now they want to" live as a local resident, try the cuisine in the region and have more original experiences ".

In South Coast Plaza, one of the largest shopping centers with the greatest boom in the United States, the Tory Burch store recently invited rich customers to an event with pampering, cocktail waiters and an artist to paint miniature portraits of guests with theirNew purchases.Buyers who speak Mandarin spent the afternoon taking photos to share on Wechat, champagne drinks rose above new bags.

Liou, from L’Epliced, qualifies these buyers as "Global Chinese".

"They are not immigrants in the traditional sense," said Liou."[Abroad] have been established in some way, in educational institutions or with investments in Western countries".

Many have properties in the United States, which serves as a second home to them and their families.

This new group, which many see as a pillar for the future of the international luxury retail market, has become an almost local customer base in southern California.

Many retailers have changed their approach to more localized Chinese groups, said Hsieh, citing as an example one of its customers, the manager of a prestigious watch company in Rodeo Drive.

“Now that China is trying to level the playing field, it is not worth buying those watches here.The price is usually more or less the same, ”said the luxury consultant."Today they are changing to concentrate on the local market".

Hing Wa Lee Group has also focused its attention on the Chinese local market.Lee, the owner of the company, said that the increase in sales to Chinese residents of Los Angeles County has allowed their jewelers to maintain growth, despite the fall in the Chinese business business.

"More and more rich Chinese choose to have residences outside of China," said Lee."Be in L.A is a good place.It is a very popular destination for them ".

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