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Thai retailers banking on purchasing power of Chinese tourists

By on Feb 05, 2013 in Property News

werfawThai retailers banking on purchasing power of Chinese touristsBANGKOK : Nearly 2 million Chinese visited Thailand last year, making them the biggest group of tourists to visit the kingdom.

Changes in their shopping habits while travelling could mean big business for luxury brands in Thailand.

Rising middle-class incomes in China mean more travel abroad and that means more shopping while on holiday.

These include not just souvenirs, but luxury handbags, cosmetics and watches that carry a hefty 30 per cent tax on the mainland.

Chinese overseas travellers spent US$72 billion last year, just behind Americans who spent US$75 billion.

With a boom in Chinese tourist arrivals that shows no sign of slowing, Thai retailers and developers are banking on their purchasing power, and gone are the stereotypes of the budget traveller on low-cost package tours.

Statistics have shown that last year, the Chinese bought 25 per cent of the world’s luxury goods, a sector poised for a big expansion in Bangkok.

James Pitchon, executive director of CB Richard Ellis Thailand, said: “The luxury brands, either themselves or through their distributors, are keen to expand and have seen the resilience of the Thai economy, and not just the Thai domestic economy, but the growth in tourism, and that they want to have a store or several stores in Thailand.”

For Central Retail Corporation, that means constructing a huge new luxury mall aimed at Asian and specifically Chinese tourists.

Expected to be completed by December 2013, Central Embassy in the heart of Bangkok’s shopping district will have 70,000 square metres of retail space.

Chart Chirathivat, managing director of Central Embassy, said: “The tourists are coming here and growing a lot. What they are looking for now is luxury products. So I think Bangkok does have a good potential.

“The numbers for last year, in my discussion with luxurious brands, is that the market has grown a lot. And out of all the Asian Pacific countries for most brands, the highest growth is achieved here (in Bangkok).”

One Chinese tourist said: “Compared to Hong Kong, I feel Thailand is quite nice. The Thai people are very warm.”

Another commented: “We heard from friends that prices here are lower than Hong Kong, we so decided to come to see for ourselves.”

Existing luxury malls know they will have to compete for the increasingly-sophisticated Chinese customers.

Many already offer concierge and interpreters to help but plan to expand.

Fafuen Temboonkiat, managing director of Gaysorn Property Co Ltd, said: “They help the Chinese visitors and on several occasions, translate and help our tenants…our concierges were able to be the mediators to that.”

When asked if the company has plans to expand these services, Mr Fafuen said: “Definitely, we will see that it will go to another level, and…even a step further in terms of personal assistance to our customers.”

Though Hong Kong and Taiwan are more convenient, Chinese tourists are increasingly looking to Thailand when it comes to luxury holidays.

Source : Channel News Asia 1 February 2013

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