Heathrow has come under fire for a duty-free sales promotion that apparently forced Chinese tourists to buy more to enjoy discounts. The seemingly racist practice came to light when a Chinese customer at a retail store run by World Duty Free, owned by Swiss Dufry, at Heathrow Airport in London was told that Chinese customers had to make larger purchases in order to be eligible to receive vouchers that could be used with future purchases. Both Heathrow and World Duty Free have issued apologies but that hasn’t stopped Chinese netizens and media outlets from heaping criticism upon both organizations.
Apologies from Heathrow and Dufry-owned World Duty Free have not stemmed the tide of criticism
The state-run mouthpiece, the People’s Daily, ran an op-ed on its site titled “Heathrow Airport Has Apologized, but Questions Cannot Stop.” In the piece, the author asks “Chinese tourists bring great profits to both Heathrow Airport and the Dufry Group, but are unable to receive corresponding respect. This simply makes it clear that Heathrow Airport and Dufry Group do not truly uphold the rule of law and simply use Chinese tourists as a tool for making money.”
It’s possible that the higher entry for purchases to receive promotions for Chinese tourists is simply a means of discouraging Chinese daigou purchases or at least reduce the ability of these buyers to take advantage of the promotion. Daigou, or sales agents, buy luxury goods abroad at cheaper prices and then resell them in China. Because of China’s import laws, luxury goods are usually much more expensive than in Europe.
It’s possible that the discriminatory spending rule was to deter to daigou buyers
The practice is seen as disruptive and “short-sighted” by brands. Still, if it this measure was a means of reducing daigou spending, it seems that it largely misses the mark. These types of buyers will likely buy in “bulk” anyway to maximize profits per trip.
Regardless, it’s largely counterproductive and seemingly unnecessary. While it’s true that Chinese consumers buying from third-party sellers is detrimental to luxury brands in China, it seems unfair to penalize consumers for laws and regulations that are largely outside of their control, i.e., import tariffs.
The rule penalizes Chinese consumers for something they have little control over
Moreover, the policy seems undeniably discriminatory toward Chinese consumers. By and large, most customers only needed to pay 250 pounds (approx. $350) to receive the vouchers, whereas Chinese customers needed to spend a whopping 1,000 pounds. Such a large discrepancy seems impossible to justify.
It could also be in response to the perception that Chinese tourists almost always spend much more than their counterparts. There is certainly some truth to this stereotype. With the rise of Chinese outbound tourism in the last decade, a disproportionate number of these new travelers could be considered “nouveau riche” and Western media was abound with stories of big-spending Chinese travelers.
However, outbound travel, even to more expensive destinations in Europe, has become substantially more mainstream, with a growing number of middle-class Chinese travelers fueling an outbound tourism boom. Assuming that Chinese tourists are willing and able to spend 1,000 pounds while in transit is not only discriminatory but also represents a fundamental misunderstanding of the changing nature of the Chinese travel market.
Heathrow has caught flak before for the racial profiling of Chinese travelers on the part of its “passenger ambassadors”
This isn’t the first time Heathrow has come under fire for discriminatory practices in regards to Chinese tourists. It came out last year that the some 250 “passenger ambassadors” employed by Heathrow sought to target Chinese travelers and encourage them to spend. These ambassadors seemingly racially profiled and harassed Chinese tourists in order to encourage spending.
While it seems that this latest gaffe seems to be more at the impetus of World Duty Free, Heathrow’s track record implies that it not only tolerates but encourages this kind of behavior.
For destinations, ensuring that Chinese tourists feel welcome is an important part of ensuring that they return and pass along good reviews via word of mouth to their friends and family at home. Heathrow’s practices actively discourage Chinese tourists from returning.