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Increase in International Visitors Positively Influences Australia's Luxury Goods Industry

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In 2016 retailers in Australia have benefited from a record number of tourists visiting Australia, particularly from China, as these tend not only to come to the country to visit its iconic sites but also to shop. Thus inbound arrivals during the year reached not only record levels in terms of number of trips but also in terms of spending. Although the more favourable exchange rate has been a key factor in attracting international visitors, international marketing initiatives introduced by Tourism Australia (the government agency responsible for promoting Australia as a travel destination) to target specific markets has also influenced the growth in inbound travel. In fact, by the end of 2015 China had become the fastest growing source of inbound arrivals to Australia.

Australia has built its status as a luxury shopping destination for Chinese shoppers. In fact, luxury retailing has increased by 11% in current value terms in 2016, with categories such as luxury jewellery and watch retailers growing by 27% in current value terms. Furthermore, Euromonitor estimates that in 2015 foreign expenditure on luxury goods accounted for almost 30% of total sales with a large proportion of these sales coming from Chinese tourists. During the year, retailers have responded to the growing number of Chinese shoppers through a number of initiatives, including a wider acceptance of China UnionPay, Mandarin-speaking staff in stores and the launch of promotions and commemorative gifts for the Chinese New Year. For example, in 2016 David Jones launched a designer collection in partnership with the Australian China Fashion Alliance during the Chinese New Year, whilst at least 100 stores in Westfield Sydney offered sales during that period. Similarly, in 2016 Swarovski launched a campaign specifically targeting shoppers celebrating Chinese New Year, whilst luxury retailer Harrold introduced a line of commemorative gifts for Chinese customers.


China has been identified as a key market for Australian tourism within Tourism Australia’s Tourism2020 Strategy, which estimates that Chinese nationals could be spending up to AUD13.0 billion in Australia by 2020. In this sense, it is anticipated that Chinese shoppers will continue to support value growth in Australia’s luxury goods industry, as well as other retail categories, which is supported by the favourable perception of the Australian retail brand portfolio and the strong presence of international brands. Furthermore, in the short-term Australian retailers will continue to benefit from the low value of the Australian dollar, which makes Australia a more affordable destination for visitors with the possible intention to shop.

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