Harrods expands its e-commerce options, in effort to lure more Chinese shoppers

Peggy Sito
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Harrods expands its e-commerce options, in effort to lure more Chinese shoppers

Harrods, London’s famous luxury department store, is planning the biggest revamp in its 180-year history as part of a £200 million (US$265 million) investment which is aimed partly at attracting more Hong Kong and Chinese customers, managing director Michael Ward told the South China Morning Post on Thursday.

He called the project the most ambitious investment and store renovation the iconic shoppers’ paradise has undertaken since it first opened its hallowed doors in 1834.

The three-year capital plan includes ploughing more money into its e-commerce offering to ensure the store remains popular for customers from around the world, especially from affluent Asian destinations, led by Hong Kong and China, said Ward.

“Our Hong Kong and Chinese customers are extremely important to Harrods so are considered part of our redevelopment plans,” he said in an interview with the Post.

“For us, the future is in the East and we have been focusing on that for a number of years.”

Sales to Harrods’ overseas customers are rising fast, and the Chinese became the store’s biggest spenders in February this year. Hong Kong is its largest Southeast Asian market and fastest growing.

Ward said the region has been a rich long-term source of customers for Harrods, given the relationship between Britain and Hong Kong.

The company claims that research shows one in every £5 spent by Chinese visitors to London is at Harrods.

Ward said Chinese customers are some of the store’s most knowledgeable, adding they “do not want to be treated in a different way”.

He said the interior of the shop, which has 330 different sections covering a million square feet of retail space, will be “entirely redeveloped”.

There will be no changes to the exterior, but all the interiors are being redone. For example, the Food Hall’s walls have been knocked down and the fine watch room will be expanded to incorporate a marble staircase leading to new space on the lower ground floor.

Smack in the middle of London’s affluent Knightsbridge, Harrods is often described as the most famous shop in the world.

It is now owned by Qatar Holdings, the sovereign wealth fund of the Gulf state, which bought it in 2010 from Mohammed al-Fayed, who had owned it since 1985.

Ward said various options are being considered to attract more Chinese customers, including improving signage to help them navigate their way through the store and more product information on food items – something specifically requested by Chinese customers.

“We have seen a lot of social media activity in China,” said Ward, adding it would continue to drive the use of e-payment mechanisms, to help Chinese customers to shop there.

The company will also invest in its official Weibo and WeChat accounts, two of mainland China’s most popular social media platforms.

The growth of Chinese e-commerce platforms is very impressive and we watch their progress closely

Michael Ward, managing director, Harrods

Harrods introduced Alibaba’s Alipay digital payments system last year, and plans to follow that with Tencent’s WeChat Pay service next year.

Ward said the launch of Alipay has opened the doors for conversation with Alibaba’s Tmall, but it has yet to decide whether it would consider selling products on the online shopping platform. Alibaba owns the South China Morning Post.

“The growth of Chinese e-commerce platforms is very impressive and we watch their progress closely,” said Ward, who is in Hong Kong this week to launch the first edition of Harrods magazine. “But it would need to be the right customer experience for us to seriously consider it.”

Ward said Hong Kong customers are very familiar with Harrods.

“Many of our Hong Kong customers have second homes in London and may have children at boarding schools in the UK. They spend a significant amount of time in London and at Harrods so we don’t see them as tourists, even if they do get to benefit from tax-free shopping,” he said.

This year the company opened a Harrods Tea Room at The British House in Beijing in a bid to introduce the brand to mainland customers. But it has no plans to open any stores in China.

“There are no plans to recreate the Knightsbridge store anywhere else in the world, as we believe there is only one Harrods,” said Ward.

The Knightsbridge store, established in 1849 by Charles Henry Harrod, attracts some 15 million customers annually.

This article Harrods expands its e-commerce options, in effort to lure more Chinese shoppers first appeared on South China Morning Post

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