Chinese consumer power is becoming so mighty major British shops will soon need to stock and accept Chinese currency, according to an Oxford University historian. Several luxury retailers in London have recently installed China Union- Pay debit card terminals, rarely seen outside their home nation, to cash in on the rapid growth in spending by Chinese millionaires. And renminbi, more commonly known as the Chinese yuan, is already accepted by Selfridges.
Dr Karl Gerth, the author of As China Goes, So Goes The World: How Chinese Consumers Are Transforming Everything, claims this is only the beginning and that renminbi, like dollars or euros, will become a readily accepted form of hard currency in Britain. “In years to come the tastes and desires of Chinese consumers will have to be at the forefront of every successful shop owner’s commercial considerations,” he said. “With China’s population and spending power, it is no surprise that big firms are bending over backwards to meet the demands of the Chinese consumer.”
As the Chinese economy gallops towards being the biggest in the world, evidence of shopping sprees by the country’s wealthy elite is steadily revealing itself in the windows of London’s most elite shops. In the storefront display of exclusive watch retailer Marcus on New Bond St – where prices begin in the thousands – a sign advertising its acceptance of Chinese credit cards sits proudly among the glittering Vacheron Constantin and Audemars Piguet timepieces.
The store’s manager, Dean Harding, said that he had even taken on two Mandarin-speaking staff specifically to cater with the new demographic of mega-spender. “China is the biggest emerging market in the world,” he said. “We are one of three or four retailers that have a CUP terminal in London.
It’s a relatively new thing in the UK, we started offering it last May, but they’re trying to make it easier for Chinese shoppers.” A“CUPwelcome” sign is also in the window of another expensive watch shop on the same street, Wempe, while a salesman at nearby jewellers SJ Phillips said affluent travellers from Beijing were increasingly common. “It’s not unusual for Chinese customers to spend a five-figure sum in 20 minutes,” he said. “Many years ago we didn’t get any but it’s increased a lot in the last five years.” For the moment, acceptance of the Chinese yuan stretches no further than this most prosperous corner of the capital.
However, according to Dr Gerth, China’s expanding middle class and its burgeoning taste for foreign travel means it will inevitably spread to cheaper shops. “They are interested in leisure travel and we’re just beginning to see a huge number of Chinese tourists travelling all over the world. “It’s not just that middle class people want to go; this is all part of China’s efforts to build a service economy. All of a sudden, rather than setting up a clothes store or a little restaurant, everyone in China is setting up a travel agency.
They have Chinese editions ofLonely Planet books now and I suspect we’re not far off from hostels in London accepting renminbi from Chinese backpackers.” Officially it is still frowned upon for Chinese people to take their native currency abroad, and even with CUP cards they can struggle to spend the reserves they have built up back home. Cash transactions have their own limitations; the yuan’s largest value note is only worth about £9, making it impractical for those spending large amounts. Yet the eagerness of the Chinese to spend abroad is getting around these issues “Small, individual consumers are driving these bigger changes,” said Dr Gerth.
It’s not like two bankers are sitting in Beijing or London are making these decisions. It’s from the ground up. People are saying we want to capture that market, but the Chinese come over just with renminbi, so they hire someone who can speak some rudimentary Chinese and figure out a way to take the money they do show up with.” As the economy continues to grow, Dr Gerth sums up the appetite to take advantage neatly: “If I could have a renminbi savings account, I would do so. I tried when I was there, believe me.”Reuse content