Upmarket retailers bearing red, blue and green-banded symbols on their doors with UnionPay in English and Chinese are appearing throughout Australia, targeting the growing Chinese tourist market, spending billions each year on designer goods by now accepting the bank card held by most middle-class Chinese.
The latest of these stores, David Jones, is aiming to make its shops more Chinese friendly with the addition of Mandarin-speaking saleswomen, easily identifiable with their name tags featuring the Chinese red flag. The department store sold its first batch off goods to UnionPay cardholders earlier this week. One of the first customers, the chairman of the Chinese card giant, Su Ning, was in Australia to inspect the expansion of the global empire, receiving 500 billion yuan or $84 billion transactions outside of China last year.
Optimistic about the growth of his company in Australia, Mr Su expects the total value of UnionPay transactions to reach $800 million this year. These transactions are expected to double with Chinese tourists becoming an increasingly important source of revenue to international retailers. The Boston Consulting Group estimate China will reach the top market for luxury goods worth a US $245 billion annually by 2020.
“Overseas merchants pay careful attention to Chinese consumers. For example, foreign visitors are responsible for a significant portion of consumer spending in Australia and the Chinese are the most important part of this group,” Mr Su, for Business Day.
With one of UnionPay’s largest purchases in Australia so far being $500,000 for watches and $110,000 spent on Hunter Valley wine it’s no wonder the Australian market is set to increase its market with the introduction of UnionPay. “We have long recognised that as retailers we are competing internationally and the ability to tap into the lucrative Chinese markets is a great strategic advantage for us.” Paul Zahra – David Jones, Chief Executive.
With Chinese tourists spending $4.2 billion in Australia last year alone, the figures are expected to increase to $10 billion at the end of the decade, according to Tourism Australia. With Australia setting its sights on the Chinese market, UnionPay is gearing towards the International market with competitive fees and better services for non-Chinese card holders.
Mr Su stated hearing multiple complaints about Visa and MasterCard’s duopoly. It was clear they wanted more competition in the marketplace, he said. In partnership with local banks, UnionPay is now issuing cards in Australia with the company building its global empire with UnionPay International. This has increased the rate of the cards acceptance in shops and hotels and those numbers are expected to grow from 12 per cent to 40 per cent at the end of year.
Mr Su warns that while Chinese travellers are on a shopping spree around the world, the good times won’t “last forever” for foreign retailers, proven by the recent crackdown on corruption in China which has already translated to decreased revenue for large international retailers and their share prices.