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Chinese nationals have overtaken the British to become the biggest spending consumers at Harrods this year, but the upmarket department store has pointed to the “urgent” need for the UK government to do more to encourage further tourism to London from China.

Harrods’ managing director Michael Ward said Chinese customers spent more than £200m in store last year mainly on high-end fashion and accessories. They overtook British customers in terms of amount spent in February this year, and the trend has remained constant since.

That would account for more than 10 per cent of the £2bn annual revenues that the company reported last month, alongside pre-tax profit of £233m, and is part of a general shift towards Asia for Harrods. “Wealth is moving eastward. Thailand and Malaysia will be bigger countries for us than America,” said Mr Ward. 

Harrods has “seen a continued growth in Chinese spending” this year, he added, partly because of the declining value of the pound following the Brexit referendum. “London is a much more inexpensive place to go to,” he said. 

The numbers cited by Mr Ward indicate a significant portion of Chinese spending in the UK takes place at Harrods. About 115,000 Chinese tourists visited Britain in the first half of this year, spending £231m, according to VisitBritain. 

But France remains the most popular European destination for tourists from China, with 1.8m visiting Paris last year. Many Chinese tourists are discouraged from travelling to Britain by the requirement to file a separate visa application as the UK is not part of the EU’s Schengen area, which allows free movement across borders.

The UK announced new rules to speed up visa applications for Chinese tourists in 2015 after complaints from retailers. But Mr Ward said “the government hasn’t made it as easy as they could have done”.

“As we move towards Brexit the government has to take a stark look at how they can get what is now the second-largest economy in the world visiting London more frequently . . . it’s an urgent task,” he added.

Mr Ward pointed to more multiple entry visas and long-term visas for parents with children studying in the UK as examples of action the government could take.

Harrods, founded in 1834 and bought by Qatar Holding in 2010 for £1.5bn, last month announced a £200m renovation of its Knightsbridge store. But it will not make large adaptations aimed at appealing to Asian visitors as the store’s attraction lies in tradition and Britishness, Mr Ward said.

The store has benefited from its exclusive image, said Shaun Rein, founder of Shanghai-based consultancy China Market Research Group.

“Harrods is more like a tourist destination, like the Louvre in Paris. If you were to have Harrods in China it wouldn’t work,” Mr Rein added. “For Chinese consumers Britain is supposed to be high end, kind of stuffy, and ultra-civilised”.

Harrods has hired 200 Mandarin-speaking staff, a number that is “increasing steadily”, said Mr Ward. The store also allows customers from China to pay using Alipay, the service owned by Alibaba, China’s e-commerce behemoth, and will soon roll out support for Tencent’s WeChat payment system. 

Mr Ward added that sales had been buoyed by the general recovery in luxury this year. “Our target audience is the top 0.1 per cent of the world’s wealth,” he said. “The rich are getting richer and they have done for the last 10 years.”

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