There was an interesting announcement this week from LVMH Moët Hennessy Louis Vuitton in which the luxury brand announced that it would be maintaining its partnership with the Chinese-American Planning Council (CPC) and Parsons School of Design in New York and running its LVMH Fundamentals in Luxury Retail program again this year.

 

The idea is simple, but really quite brilliant on a couple of fronts. The 10-week education and training scheme provided a range of retail skills to bilingual English and Mandarin speakers, including those who are unemployed and underemployed and individuals who have recently immigrated to the United States, to help them gain employment in luxury retailing.

 

The program, the first of its kind in the industry, includes classes taught by professors from the prestigious Parsons School, LVMH professionals and CPC Workforce staff. This is followed by an internship program working in a retail store of one of the LVMH Group brands, which could conceivably include Bulgari, TAG Heuer, Chaumet, Dior Watches, Zenith, Fred, Hublot or De Beers Diamond Jewellers Ltd.

 

So far, more than 90 percent of those enrolled in the program have completed it (41 people so far) and more than 70 percent have found immediate employment, apparently with an average three-fold increase in wage per hour, not including commission or bonuses.

 

While the program is clearly a great opportunity for those retail workers who are improving their skills and finding work, possibly for the first time in their lives, it is also a clever strategy on the part of LVMH in attracting and selling to increasingly affluent (and brand-conscious) Chinese consumers.

 

According to a recent report from HSBC entitled “China’s Global Shoppers,” Chinese visits abroad are expected to double between 2013 and 2023 and if you realize that just somewhere in the region of 4 percent of Chinese citizens currently hold passports, there is unprecedented possibilities ahead as the country and its population becomes wealthier.

 

To put that figure in perspective, according to HSBC, the number of annual tourists from China rose from around 10 million in 2000 to 109 million in 2014 (heavy restrictions on foreign travel were removed in 2000), and is expected to rise to at least 200 million in the coming years.

 

So far, Europe is the biggest draw for Chinese tourists, who, apparently love to shop in Paris. Currently, Chinese tourists account for only 10 percent of sales in the US, but that is another number that is expected to grow rapidly. According to CNBC.com, Chinese tourism in the US is predicted to quadruple by 2021, with the luxury goods sector poised to benefit greatly.

 

A Bloomberg article from September 2014 estimated that Chinese tourists were on target to spend $155 billion abroad, up by 20 percent over 2013, based on numbers from the China Tourism Academy. In addition, a McKinsey & Co. report said that one-third of all Chinese travel expenditures goes to buy goods – often luxury items –to take back home.

 

Employing luxury retailing staff, be they in New York, Los Angeles or Paris, who speak Mandarin seems like a very savvy move. Perhaps others should be following in LVMH’s lead and target the people who have the means – and the desire to spend money on luxury goods, including watches, jewelry and diamonds.

 

Have a fabulous weekend.