As Asians’ love for shopping keeps cash registers ringing at outlets worldwide, travel consultants are becoming more creative too.

  04/10/2012 16:28

In recent years, the global outlet shopping industry has turned its attention on Asian travellers, whose penchant for shopping while holidaying abroad has been a well-documented phenomenon.

Shopping has become a particularly important driving force of China’s burgeoning outbound tourism sector. In 2012, 78.4 million Chinese are expected to travel overseas, spurring outbound tourism consumption to a new high of US$80 billion, according to a research paper by China Tourism Academy.

Data from the World Luxury Association also showed that the luxury spending of Chinese consumers abroad during the seven-day National Day holiday in 2011 was equivalent to three months of what they spent locally.

In addition, outlet operators are increasingly keen to set up shop in Asia, with established chains having launched or in the midst of opening branches in the region (read more in the sidebar below).




Clockwise from left: Chic Outlet Shopping’s La Vallée Village outside Paris; McArthurGlen’s Noventa di Piave Designer Outlet near Venice; newly opened Johor Premium Outlets in Malaysia; Citygate Outlets in Hong Kong
Europe remains the nexus

According to The Economist’s Globe Shopper City Index in 2011, Europe is the world’s leading destination for luxury shopping, with 44 per cent of the global receipts from international tourism spent on the continent.

Furthermore, Asia’s rapidly rising disposable income levels, coupled with stronger Asian currencies  relative to the euro and US dollar, have propelled both Western Europe and the US to become the top outlet shopping destinations, travel trade members pointed out, adding  that Asians generally prefer to shop at branded enclaves such as Chic Outlet Shopping Villages and Premium Outlets.

Jane Chang, marketing and communications manager, Chan Brothers Singapore, said: “Besides favourable exchange rates, Singaporeans on holiday can collect refunds from value-added taxes, which amount to substantial savings. Moreover, Singaporeans want more bang for their buck, and factory outlets offer exactly this as items can be discounted by as much as 60 per cent.”

“The outlets in Europe are usually more popular with PMEBs, while the ones in the US tend to also appeal to families, as they feature a wider variety of brands, including children’s labels,” revealed Eileen Oh, head, marketing & communications, ASA Holidays Singapore.

Besides hefty discounts, outlet stores in Europe and the US also draw Chinese tourists for its superior product quality when compared to homegrown stores, noted Ding Jianmin, assistant general manager of China International Travel Service (CITS) Shanghai. As a result, the majority of Chinese group tours now supplement their sightseeing tours with outlet shopping, he added.

For Indians, Italy holds the greatest fascination for outlet shopping as it is commonly perceived as an alta moda (high fashion) destination with a wide variety of designer labels.  

Said Alessandra Bolzagni, owner and president of Milan-based inbound operator, My Special Guest:  “Popular among Indian tourists are Serravalle Designer Outlet, Prada’s Space Outlet in Montevarchi, Fidenza Village and FoxTown Factory Store. We try to bring (Indians) in during the sales period between July and October, when products come from previous years’ collections, samples or overproduction. The April-August period is when we get most Indian clients.”

Manoj Saraf, managing director, Gainwell Travel & Leisure India, said: “The discounts available at the shopping outlets are outstanding and entice the Indian tourist, as a 50 per cent discount on a genuine Prada dress or a Bottega Veneta bag is an unbelievable bargain for the knowledgeable Indian shopper.

“Italy is the most popular (destination) as shopping tours are easily combined with sightseeing and gastronomy in the Milan-Florence-Venice-Rome-Bologna region.”


Cashing in on demand

Asian outbound tour operators remain buoyed by their customers’ growing appetites for outlet shopping.

Said CITS Shanghai’s Ding: “Sometimes, there would be so many tourists in the stores that stocks would run out, so we choose to visit large-scale stores in big cities such as Bicester, suburban Paris, Milan, Rome, Los Angeles, New York and Miami.

“We usually include one or two outlet stores in each (itinerary). However, such stores are often located in remote areas – which takes almost one to two hours to reach – so the shopping time given to our customers will differ, ranging from three hours to a day,” said Ding.

Ankur Khanna, director, Tristar Travel Services India said: “We tie up with shopping outlets in the Milan, Bergamo, Florence and Bologna areas, and earn good commissions from them. This segment of the outbound market is growing by 25 per cent annually.”

Koushik Goswami, general manager-outbound, Travelcorp India, said: “We create new itineraries by combining shopping at outlets with gastronomy tours in the region like wine and balsamic vinegar tasting in Tuscany, and prosciutto and parmigiano reggiano cheese tasting in Emilia Romagna. These tours are becoming increasingly popular with upscale Indian travellers, and we have seen a 20 per cent growth in 2012.”

For others like Sunway Travel Malaysia, outlet stores are the clincher when choosing incentive destinations for some clients, according to the company’s operations manager, Agnes Loh.

She added: “Most popular destinations in Europe are Italy and France. If there happens to be a factory outlet at the destination visited, clients will suggest we include it in the itinerary.

“We will inform the outlets in advance to let them know that a group is coming over and suggest that they prepare a small welcome gift, such as a shopping voucher or a souvenir for participants.”

However, selling standalone shopping packages can be tough. “Some customers do not appreciate the effort travel firms invest to put these trips together and think that they can do it themselves. They overlook the fact that consultants are better connected, offer time-tested itineraries, economies of scale and take care of all (transport) logistics,” said Chan Brothers Singapore’s Chang.

Despite the challenges, booking volume for Chan Brothers’ 10-day Los Angeles and Las Vegas Shopping Spree and nine-day London and Paris Shopping Express have so far climbed by 20 per cent year-on-year.


High value for shoppers

Although highly popular  among their clients, most travel consultants TTG Asia spoke to said they did not receive commissions or substantial profits from shopping tours.

Tie-ups with local operators to offer value-added services, such as reserved parking lots, extra discounts on shopping items and discount coupons at restaurants located within the shopping complexes are more commonplace.

“Although there isn’t any commission, the inclusion of shopping outlets is still important as it adds value and variety to our tour packages. For long coach journeys, it is a superb way to break the journey up as it provides time for what Singaporeans love to do – shopping,” said Alicia Seah, senior vice president, marketing & PR, CTC Travel Singapore.

Similar sentiments were expressed by Abdul Rahman Mohamed, deputy general manager channel management of Mayflower Acme Tours Malaysia, which includes a Chic Outlet Shopping Village as a half-day programme in some European itineraries.

He said: “We don’t earn commission from it, but the shopping element provides added value to the itinerary. It appeals to travellers who are not concerned about buying last season’s fashions, as discounts are up to 70 per cent. For FIT travellers, we include a Chic Outlet Shopping Village as an option.”

Tang Jiye, general manager, American region, Shanghai Spring International Travel Service, also pointed out that he was unable to obtain commission from outlet stores in the US, but said his company continued to include such stops in his itineraries due to the high demand among Chinese tourists who want to shop at such discounted rates. Outlet stores around the world bag Asian shoppers

La Reggia Designer Outlet near Naples, a McArthurGlen outle

  Chic Outlet Shopping Villages 

China is the top visiting nationality for its nine Villages in Europe, while South-east Asia is ranked the fourth largest market overall, with sales up by 41 per cent year-on-year compared to the second quarter of 2011. South Korea, Hong Kong, Taiwan and Japan also feature in the top 10. For the first two quarters of 2012, the top three Asian growth markets were Vietnam, China and Indonesia.

Chic Outlet Shopping works closely with the travel trade across China, Malaysia and Singapore through joint marketing initiatives such as the co-sponsorship of prizes and advertisements in brochures. Partner consultants are offered net rates for various products, including Shopping Experience packages and Chauffeur Drive services.

The first Chic Outlet Shopping Village in Asia is due to open in Suzhou, just outside Shanghai, in 2014.

McArthurGlen Designer Outlets

With nearly 900 brand partners across 21 outlets in eight European countries, McArthurGlen offers savings of 30-70 per cent, with further VAT refunds available at the discretion of individual stores. An additional 10 per cent savings is available for group tours, an incentive that has enticed hordes of Chinese who want to avoid China’s luxury sales tax. 

Premium Outlets

Premium Outlets, which has a stronghold in the US, has ventured into South-east Asia with the debut of Johor Premium Outlets (JPO) in December 2011.

JPO boasts close working relations with Malaysian operators to include the outlet in their itineraries before these are promoted to overseas travel consultants.

JPO general manager, Jean Marie Pin Harry, said:  “JPO also works closely with various local hotels in the state of Johor to offer Shop and Stay Packages, ensuring a complete visitor experience, including discounted room rates and access to additional savings at JPO. 

“JPO is represented at overseas trade and travel shows by travel agencies and Tourism Malaysia. We target a wide range of shoppers, including residents from the area and international visitors from South-east Asia, China, Hong Kong, Taiwan and India.” 

Domestic visitors currently constitute JPO’s biggest growth market. On the international front, growth markets are South-east Asia, China and India.

Citygate Outlets 

Featuring over 90 international brands, this Hong Kong-based outlet mall offers 30-70 per cent discounts year-round, with different promotion programmes available at different times of the year to attract both local and overseas shoppers. The addition of 10th Avenue with nine new stores in December 2011 has augmented the mall’s shopping experience.




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