The “darlings of the industry” are willing and able to buy up designer goods, avoiding China’s import tariffs.
They came empty-handed, but they left clutching loaded shopping bags.
Throngs of Chinese tourists swarmed Vacaville (Calif.) Premium Outlets on recent weekends, scooping up luxury handbags, designer sunglasses and American jeans. With prices that are often 50 percent cheaper than goods at home, the Chinese aren’t shy about opening their wallets.
“Chinese visitors are the darlings of the industry,” said Maura Eggan, vice president of marketing for Premium Outlets, which is owned by Simon Property Group of Indianapolis.
The Chinese have long shopped in New York and Los Angeles, but many of them are now turning to suburban outlet malls where they can get more bang for their buck.
“Of course, things are cheaper here than in China,” Beijing resident Rainy Zhang said in Mandarin, while sitting on a bench outside the Burberry store in Vacaville.
As Zhang spoke in a thick Beijing accent, her friend Hill Ai stared at a long receipt from Calvin Klein, tallying up the number of discounts.
China’s middle class, now 400 million strong, is growing at an explosive rate. Newly affluent Chinese are flocking overseas and spending big money.
On a recent Saturday, a group of 20 schoolteachers from remote Shaanxi province scrambled to purchase wallets, leather jackets and other high-end items. They left five hours later, juggling oversized shopping bags emblazoned with names that included Coach, Juicy Couture and Polo Ralph Lauren.
The shoppers declined to be interviewed because they were visiting the United States through a government-exchange program. Their guide, Henry Lee, noted that official trips are carefully scrutinized by the Communist Party.
The average Chinese visitor spends $3,000 on luxury goods, according to an analysis by TaxFree Shopping, a company that processes tax refunds for foreign travelers. That kind of spending has caught the attention of American retailers and mall operators.
“The Chinese want designer brands, and they want a bargain. That’s why they come to Premium Outlets for our upscale stores,” Eggan said.
With 120 boutiques, the Vacaville property offers 447,000 square feet of shopping an hour’s drive from San Francisco. A parade of tour buses drops by every week, according to management; many make the stop on the way to Lake Tahoe or the Napa Valley.
Courting Chinese customers
Simon Property Group has aggressively courted Chinese consumers since 2005. Eggan often travels to China, meeting both officials and tour operators. She was one of 80 business leaders who accompanied California Gov. Jerry Brown on a weeklong trade mission to the Asian giant in April.
With the liberalization of their country’s economy in the 1990s, the Chinese have grown accustomed to seeing Western styles and luxury brands. But high tariffs make foreign imports extremely expensive, even though many of them are made in China.
In some cases, Chinese tourists say, the discounts on merchandise in the United States cover the cost of their trip.
Tumi, the New Jersey luggage manufacturer, is one U.S. retailer that has reaped the benefits of China’s new prosperity. Large suitcases — priced at $799 apiece — are popular with Chinese visitors, said Ariana Ford, manager of the Tumi store at Vacaville.