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Making Money Off China’s Wealthy In The Comfort Of The United States

Posted in China Business

The Wall Street Journal did a story by Wei Gu on the spending habits of Chinese tourists when overseas.  No surprise, they are buying tons of luxury goods. As Wei Gu so aptly puts it:

When Chinese go abroad, they are transformed from obsessive savers and bargain hunters into serious shoppers, much to the joy of retailers. Although conspicuous consumption is now frowned upon at home, total spending abroad by Chinese travelers jumped by 58% in 2012, according to Global Blue, which processes tax refunds for tourists. More than two-thirds of Chinese purchases of luxury goods take place abroad, and overseas sales to Chinese tourists are also growing at a faster clip than sales inside China.

As an international law firm focused on representing American companies doing business with China, we are seeing rapid growth in the following areas related to China’s consumers:

  • Ultra-high end services. China’s super-rich are hiring Americans and American companies to tutor their kids and prepare them for college. China’s super-rich are hiring Americans and American companies to help them put on their big events like weddings and parties.  China’s super-rich are hiring Americans and American companies to design their houses and their interiors.  China’s super-rich are hiring Americans and American companies to design and produce their custom-made clothes.  China’s super-rich are hiring Americans and American companies to plan out their international travel.  China’s super-rich are hiring Americans and American companies to help manage their money (although near as I can tell, this isn’t happening as much as one would think). China’s super-rich are hiring Americans and American companies to run their households. China’s super-rich are hiring Americans and American companies to help them find homes in the United States and in other countries around the world. China’s super-rich are hiring Americans and American companies to take care of their health care needs.
  • Companies that help other companies cater to China’s super-rich.  I am aware of two companies, Affinity China and China Luxury Network involved with this.  It is my understanding that Affinity China brings China’s super-rich to the United States and then partners with American companies in terms of what the Chinese tourists see and do while in the United States. China Luxury Network provides business advice to luxury goods companies on how to cater to incoming Chinese tourists and students.
  • Realtors that focus on Chinese buying real estate in the United States.
  • Private elementary schools on up to graduate schools that are focusing on increasing their numbers of Chinese students, especially the sons and daughters of China’s super-rich.

What have we missed? What else?

  • Rob Schackne

    Dear Abby,

    My 2-cents-worth: I know how much China’s super-rich are in the news — and how bilking them is on the mind of every Western greedhead, particularly those who have been on the receiving end of any Chinese graft. While of course you and I don’t travel in the same circles (and I’m also aware that your site deals primarily with commercial law), my own exposure to the affluent classes here has found an easy 75% of them to be unworthy creatures. I should therefore like to go on record that I am finding China’s super-rich super-tiresome. I’d prefer never to hear about them ever again — in your pages or in any others.

    Signed,
    A Disgruntled Reader

    • On the Corner

      Then focus on the 25%

  • Ward Chartier

    A friend of mine and his wife recently hosted a group of over a dozen Chinese nationals in their San Francisco home for dinner. Their guests were all upper end professionals, but not government officials. After dinner, did the guests want to see the Golden Gate Bridge, visit Fisherman’s Wharf, see any of the other interesting sights in the area? No, they all wanted to go shopping at Costco.

    • On the Corner

      amazing huh? They are enamored with price and quality in the USA

      • Rob Schackne

        “What we have here is a disjoint between the ideal and the fact. Now I am a fair man. A very fair man. Do what I say and we’ll get along real fine.” What Br’er Rabbit eventually found out. How does this feed into the discourse? If at this exact historical moment (sure, let’s be Olympian), if the best the breathren can do is this, well OK. But let’s hope that it doesn’t stop there. I mean, already we’ve seen the wholesale adoption of just about every bad thing that western capitalism has to offer. Now, absent the critical thinking skills required to separate out the terms of bullshit, are we only seeing the lure of shopping for luxury items? Only my opinion. Thank you for the forum.

      • Ward Chartier

        I wonder how much of what the dozen plus professionals bought at Costco was manufactured in China? It is true that some of what is produced in various countries is not actually available there to end consumers.

        • On the Corner

          probably 65% or more… Most things are available nowadays in China at what we call the “China price” (READ TAXED TO THE HILT) so when people from Mainland China get to the USA they shop tip’ they drop. My flight back to Shanghai late last August was almost weight restricted by the amount of excess baggage checked by Chinese nationals, suitcases full of cheap American bought bounty!! They love it!!