ITALY. Independent lifestyle magazine Luxe Life has highlighted the increase in affluent Chinese and Indian consumers travelling to Italy to shop for luxury goods.
This has been a key focus of a discussion during the recent China Day event hosted by Luxe Life, along with its partners, tax-free shopping specialist Global Blue and Italian retail company Retex.
The event offered insights into the shopping trends among high spenders from these key markets and Italy as the second leading tax-free retail destination, following France.
According to data by Luxe Life, the average spend by Chinese shoppers on luxury products rose by +42% to €2,669 in the second quarter of this year, compared to the same period in 2019.
Average receipts by Chinese high-end consumers also surged by +34% to €1,572.
The data revealed Millennials spent the most on luxury products in the second quarter, with purchases worth €3,590, up by +17% compared to 2019; while Gen X shoppers’ average transaction value rose by +11% to €3,380.
Chinese shoppers’ average spend on luxury brands grew by +42%, and premium purchases by +15%.
The ‘elite’ group accounted for 2% of the shoppers, with average spend reaching €32,100 (23% of the total tax-free sales) in 2019.
Among the most preferred items were watches and jewellery, with spending up by +17% to €5,161.
Nationalities with the highest growth rate and the largest contributions to tax-free shopping include China (+28%), India (+27%) and US (+31%), compared to pre-pandemic 2019.
Bain & Co Senior Partner Federica Levato said: “The VIC [very important client] demographic, while representing only 2% of total luxury consumers worldwide, accounts for a significant 40% of the market and is steadily growing. These top-end consumers remain relatively unaffected by economic uncertainties, making them a prime target for luxury.”
Luxe Life Global Brand Director Alexander Graham added: “It is our aim to develop and create an environment where our readership can find not only original content in their language to discover the destination but also benefit from practical services such as tax free refund.
“Our audience are on the lookout for soft and hard luxury limited editions, special collaborations and independent brands. One luxury VIC is worth 230 times more than one aspirational luxury customer. According to Altagamma, that represents from €50,000 to €1 million in annual spend on luxury goods vs €2,000-€5,000 for ‘aspirationals’.”
Luxe Life emphasised the importance for top brands to establish a strong connection with these top-class travellers through trusted channels. It also noted its “special interest” to promote Italy as a preferred retail destination.
During the recent major holidays in India and China, Luxe Life magazines were handed out via QR code on boarding passes for business class and premium economy passengers, and onboard private jets from China and India to Europe. The magazines were distributed at participating luxury hotels.
The publisher, which recently struck a three-year marketing agreement with Global Blue, noted its focus on Europe to broaden its portfolio of partnerships and raise awareness of the opportunities of reaching VIC travellers from India and China.
The partnership enables Luxe Life to distribute its magazines to 200 of the highest daily spenders across Global Blue VIP refund lounges.
The deal also provides both companies a platform to connect with VICs as well as what they call ‘aspirationals’ – the second biggest spenders seeking in-destination experiences to share with their friends and family during busy travel seasons. These include the Golden Week, Diwali, Lunar New Year and summer, as well as business trips and independent travels.
This collaboration allows the audience to benefit from tax-free refund services at luxury destinations including Via Monte Napoleone, Milan, Piazza Spagna, Rome and Venice.
Global Blue Managing Director Stefano Rizzi said: “The opportunity to connect with the Chinese and Indian travellers in a quality magazine that is carefully curated to showcase the destination is what we feel is beneficial to our brands, retailers, luxe hotels and strategic partners that offer our Global Blue tax refund scheme.”
In 2023, 76% of Indians’ purchases were directed towards luxury/extra-luxury products, compared to 69% in 2019, according to data by Global Blue.
Indian tax-free shoppers were also cited as the top ten highest spenders, noting a +37% year-on-year increase in luxury purchases, while extra-luxury climbed by +59%, compared to 2019. ✈
