French Business in Macau

French exports to Macau increased by 81% to 376 million euros in 2021, driven by sales of consumer goods which benefited from the gradual return of Chinese visitors to Macau while their trips outside China remain limited. France is the leading supplier outside China.

1 - The economic recovery linked to the reopening of Macau to Chinese visitors has benefited French exports, increased 81% in 2021

Macau's economy, which contracted by -2.5% in 2019 and -54% in 2020, rebounded by +18% in 2021, with the territory gradually reopening to Chinese visitors while Hong Kong remained closed: 7.7 million visitors were recorded in Macau in 2021, up 30.7% (y.y.) even if this figure remains down 80.4% compared to 2019 flows. Casino activity has resumed in 2021 with a 43.7% increase in income: despite the impossibility of access for foreigners or Chinese tourist groups, Chinese border restrictions have been eased for Chinese visitors, with the exception of episodes epidemic, in particular between August and October 2021 (a few cases of contamination in 17 Chinese provinces). Chinese visitors are currently exempt from quarantine but must still present a negative COVID-19 test within 7 days for visitors arriving by air and within 48 hours for those arriving from the Guangdong border region. Macau has also conditioned arrivals from Hong Kong to a two-week quarantine, thus depriving itself of regular customers.

French exports to Macau reached EUR 376m, up 81% (y.y.) in 2020 according to French customs data. In 2020, French exports had fallen by 52% to EUR 207.6 million. Excluding aeronautics, however, they had increased by 5.3%, driven by sales of luxury goods. Sales did not catch up with those of 2019 (430 M EUR) but they then included 234 M EUR aeronautical exports: excluding aeronautics, 2021 sales therefore exceed those of 2019.

The luxury sector, which had shown resilience in 2020, including compared to 2019, clearly benefited in 2021 from the recovery in spending by Chinese visitors to Macau, replacing Hong Kong, which remained closed to tourists, and completing the Hainan offer for regional customers and gamers. French exports of leather goods, the leading item of French exports to Macau, increased by 57% to EUR 128 million, marking a record for Macau, as did those of jewelry/jewelry (+72% to EUR 62.5 million) and clothing (+78% to EUR 62.5 million) including lingerie (+114%). Footwear exports doubled to EUR 22 million.

Wine exports reached EUR 28m (+76% y/y), also exceeding 2019 sales (EUR 24m). Those spirits reached 8.4 M EUR (+19%) but did not reach the level of 2019 (10.4 M EUR).

Sales in the aeronautics sector reached 1.2 M EUR (compared to 234.3 M EUR in 2019 and no sales in 2020). Air Macau is a 100% Airbus customer with a fleet of 17 aircraft and which has been training its pilots through cooperation with Enac for many years. Since the lifting of the quarantine between Macau and China in August 2020, Air Macau flights have resumed for 17 cities in China but they are still suspended for international destinations.

2 - France is Macau's leading foreign supplier outside of China

France overtook Italy in 2020 to become Macao's leading foreign supplier (excluding China) and retained this rank in 2021. The increase in French exports in 2021 consolidates this position with a market share of 18.2%, behind China (31.5%), and ahead of Italy (11%) and Switzerland (7.9%). According to Macau statistics, France is its leading supplier for beauty products (46.1% market share), perfumes (85.3%), wines (61.6%), and spirits (99%). France is its 2nd supplier of handbags (in leather 43.8% and textile materials 23.7%) and jewelry items in precious metals (17.4%), behind Italy. France is also the 3rd supplier of medicines (7.8%), behind Germany and Ireland, ahead of Japan.

France has a trade surplus of 367 million euros with Macau. French imports from Macau are negligible at 8.5 million euros (-29% y/y), 51% of them concern basic pharmaceutical products.

The reopening of borders with Macau by China and the recovery of retail sales in Macau in 2021 have benefited French luxury consumer goods and this trend is expected to continue, with a gradual return to normal in Macau, where brands are developing their presence given the cessation of international travel and the still almost closed borders in Hong Kong. Visitor arrivals in Macau remained below their 2019 level (7.7 million against 39.4 million) but their gradual increase gives hope for a year in growth for French exports.

Source: Consulate General of France in Hong Kong and Macau