Paris starts to suffer as Chinese tourists disappear

As the hordes of mainland Chinese tourists who used to descend on the prime shopping districts of Paris have dried up within just a fortnight, luxury brands are beginning to plan staff layoffs and other strategies to reduce costs.

With the rapid spread of the coronavirus across Mainland China, outbound tour groups have been suspended and airlines all over the world have curtailed or canceled all services to the area. In 2018, about 2.2 million Chinese people visited France. But this week, stores they would normally frequent around Paris were almost empty.

In just one example of the coronavirus’ impact on the city is the manager of cosmetics store Paris Look, Chomphunut Supraditapron, who told Thomson Reuters she fears for her job since the steady daily stream of Chinese shoppers stopped arriving in her store.

“We need Chinese customers because it is Chinese customers who buy the most,” she said.

The world-famous Avenue des Champs-Elysees is home to flagship stores for a variety of luxury European brands, including a giant Louis Vuitton Maison and one of the world’s largest Sephora stores.

LVMH, which owns Louis Vuitton and Sephora, among other luxury retail brands, has seen its stock price fall 9 percent since January 17 – entirely due to fears over the coronavirus’s impact on retail spending. The company’s Paris flagship reportedly attracts 37 million visitors every year.

Footfall in Paris Maisons has plummeted since the Chinese stopped coming, although, until recently, some of those brands said they are noticing a compensatory upturn in Mainland China sales. That outcome is now in doubt as many retailers have been forced to close more than half of their Chinese stores as authorities try to restrict the spread of the virus.

The timing of the virus’ outbreak – on the eve of the busiest trading period of the year for any retailer targeting Chinese – Lunar New Year – has exacerbated the problem.

Regional Tourism Board data shows Chinese shoppers spend an average of €1024 (US$1136) on a five-night stay in Paris – significantly more than the average of tourists from other countries which is around €640

“The crisis is deepening and we are witnessing some kind of hysteria,” Didier Kling, the head of the Paris chamber of commerce told Thomson Reuters.