The ‘sixth continent’ in global luxury
As domestic luxury consumption continues to dip in key markets such as Brazil, China and Russia, a mobile luxury consumer is on the rise. These High Net Worth Individuals (HNWIs) are increasingly traveling abroad to consume luxury, and in doing so are changing the retail landscape from Via Montenapoleone to New Bond Street.
This group has become so influential that they’re referred to as the ‘Sixth Continent’, and yet they often prove elusive for brands to get to know. A recent Visa Affluent Survey across key markets including China, Indonesia and Singapore showed that 36 per cent of HNWIs cited shopping as their primary reason to travel abroad for leisure, catching up with the more traditional ‘lying on a beach’ (44 per cent) and overtaking ‘dining out’ (27 per cent).
VisitBritain has just unveiled plans to boost UK Chinese tourism to over £1bn annually by 2020 (up from £492m in 2013) with unusual campaigns including an online competition to ‘rebrand’ famous attractions for a Chinese audience. Suggestions include ‘Tall, Rich, Handsome Street’ (Savile Row) and ‘Star Plucking Tower’ (The Shard).
One of the other key areas of Sixth Continent impact is luxury airport retail. Growing 12 per cent a year since 2009, forecasts from BNP Paribas for the next two years put it at double the average luxury growth rate. East Asian hubs such as Singapore’s Changi still lead the way here, but European airports are catching up. Heathrow’s 38 personal shoppers process over 2000 customers a month, regularly recording single transactions of over £100,000. Luxury brands cannot afford to leave this mobile and elusive group out of their strategy for the mid-term.