Caroline Cook finds out why London Heathrow has pulled out all the stops for Chinese New Year.
London Heathrow, the world’s busiest international hub, has organised airport-wide Chinese New Year celebrations to appeal to the big influx of Chinese passengers expected during January and February.
It has put together a series of events incorporating traditional music, dragon dancing, taster classes in zhezhi (paper folding), dim sum sampling and customer service teams wearing traditional Chinese dress handing out fortune cookies.
So why has the airport invested so much effort into what is effectively a niche market?
In 2012, Heathrow handled 69,984,900 passengers, around 490,000 of which were Chinese, representing a mere 0.7% of the airport’s total traffic.
But while the numbers are relatively small, Chinese passengers are greatly valued at Heathrow, as the airport estimates that they account for around 25% of the luxury spend.
Passenger data shows that Heathrow’s growth owes much to its exposure to passengers from the expanding BRIC – Brazil, Russia, India and China – countries. In 2011, these passengers spent an average of £45.50 (US$71.5) on luxury items per visit, compared to £37.22 ($58.5) in 2010.
Internal research shows that brands such as Mulberry and Burberry are particularly popular with Chinese shoppers, who show a preference for buying British products on UK soil.
Many of them will buy more expensive items while abroad to avoid paying the luxury goods tax in China. This extremely high fee – made up of import duties, VAT and consumption tax – can add between 30% and 400% to the cost of certain products. Hardly surprising then that Chinese travellers now make up to 80% of all their luxury purchases overseas.
In response to the data, Heathrow and its retailers worked together to understand the preferences of its biggest spenders, identifying the groups who would benefit most from a tailored experience – and therefore deliver a stronger return on investment.
People born in the Chinese ‘Year of the Snake’ are said to be very stylish, fashionable and have exceptional taste – so Heathrow’s retail team was on hand to help them enjoy the optimum shopping experience.
Data on the purchasing behaviour of customers at the airport suggested that Chinese passengers spend a lot of time organising a shopping trip online before arriving at the airport. And once there, leaflets in Mandarin were handed out to help travellers find their way around the terminals and alert them to the special deals on offer, while multilingual members of the customer service team were also on hand to deal with enquiries.
According to Chinese horoscope predictions, this year signifies a period of steady progress and attention to detail, and Heathrow is doing all it can to ensure that it meets both criteria.