This past Tuesday morning I attended an interesting session at the SUNY Confucius Institute for Business in midtown Manhattan. I was invited by my friend and colleague Michael Zakkour of Tompkins International (who is co-author of the 2014 book China’s Super Consumers). The session was part of the China Business Series and entitled “China Going Global”.
Introduced by SUNY CIB Director Maryalice Mazzara, Michael had just returned from a trip to China. The audience was primarily executives and even nearby Madison Avenue store executives and personnel whose stores have one or more significant customers from China.
Mr. Zakkour’s remarks included updated information from his 2014 book (in China information updates so fast that what was written last month is out of date at times!), and noted that there are soon to be 700 million online shoppers in China alone up from 550 million today.
Today’s luxury Chinese consumer is a worldwide shopper – Shanghai and Beijing yes, but also Paris, London, and New York City are increasingly important to the luxury Chinese buyer who is interested in exclusivity and a great customer experience.
One question from the audience was posed regarding how to best communicate with Mandarin speaking shoppers in New York City (but it could be any non-Chinese speaking major city). Mr. Zakkour was quick to answer that the need was to hire one or two Mandarin speaking sales associates and to have one on the floor at all times. This makes total sense to me as one big sale to a Chinese customer could cover that expense for months.
It also will not be long before China’s economy is the single largest in the world supplanting the United States. China now invests so much all over the world that the country is a net positive FDI investor – that is more money for investment flows out of China around the world than into China. That was unthinkable not so long ago.
Some other interesting bits from Mr. Zakkour,
Age 57 – Average age of American millionaires
Age 37 – Average age of Chinese millionaires
This is important since catering to a 57 year-old American millionaire is vastly different to catering to a 37 year-old more recently minted Chinese millionaire. At the least it would present a substantial merchandising challenge.
Mr. Zakkour rounded out his comments by mentioning that 1 out of 3 luxury purchases are made by Chinese citizens. And 70% of those purchases are made outside of China. U.S. luxury retailers had better be paying close attention to these details in order to not miss what is a great opportunity.
It’s not too late. Yet.
