Chasing the Chinese wave

The Moodie Davitt Report’s latest interim bureau opened on Friday (for two days only) in Trieste, the beautiful Italian port city. We’ve come here for Costa Cruises’ latest ship launch, and one that marks a milestone for the Italian cruise specialist and its retail partner, LVMH-owned Starboard Cruise Services.

The Costa Venezia is the first ship in the Costa fleet designed to target the Chinese market. From May, once it reaches Shanghai, it will be dedicated exclusively to Chinese guests, plying routes around Asia.

Even after a softening of the China cruise market in 2018, the long-term picture looks bright. Costa says that capacity that was reduced in the region will ramp up again soon as demand increases. Speaking to Costa Group Asia President Mario Zanetti on Saturday evening (an interview will appear soon), it’s clear that the focus is on the medium to long term.

As Costa Group and Carnival Asia CEO Michael Thamm said last week: “Costa Venezia will help us to further develop the cruise market in China, which has unexplored potential. Suffice to say that, currently, 2.5 million Chinese people a year choose to go on a cruise vacation, which is less than 2% of the total number of Chinese people who travel abroad.”

And China-ready ships will be a big part of the future. On the Venezia, Italy and Venice in particular are taken as the inspirations. At almost every turn there is a depiction of St. Mark’s Square or a streetscape of the city; you’ll find life-size gondolas in the corridors ready for photo opportunities, and the waiting staff in the restaurants (many of them Asian) are dressed as gondoliers.

The restaurant menus are heavily China-focused, with noodles, dim sum and Chinese broths core elements alongside pastas, pizza and other western flavours. By the time the ship reaches Shanghai, it’s likely that the menu will be almost entirely Chinese.

And then there’s the retail. Every brand has been chosen for its ability to appeal to the Chinese shopper, and luxury is emphasised far more than on most other Carnival Corporation ships.

Bvlgari, Tiffany and Cartier take prominent boutique space, with jewellery & watches a central focus through Hublot, Longines, Panerai and other brands that are ‘hot’ in China today. Salvatore Ferragamo, Bally and Max Mara are other brands chosen for their resonance with this consumer.

In beauty, Whoo, SK-II and Shiseido sit neatly alongside Chanel, La Prairie, Estée Lauder, Dior, La Mer, L’Occitane, Clinique, Sisley and Kiehl’s across two stores in what is the biggest beauty zone in cruise retail. Brands such as Filorga and Clé de Peau make their Costa debuts, also chosen for their appeal to this demographic. Tom Ford, which has become a stellar brand in the Chinese market, stands out in generous space, as do Bvlgari (beauty), Armani, Hermès and Givenchy, which each sit close by.

Talking with senior Starboard and Costa executives over the past couple of days, the future is shaping up as fascinating. From the emerging opportunity in lower tier city consumers to the way the Chinese engage with retail onboard (very differently to western consumers), it’s a market whose dynamics will help redefine the world of cruising and of cruise retailing.