How many Armani shops does Shanghai need?


Another building site
There is no doubt the market for luxury products is growing fast in China. A recent Hurun report documented just that. China counts almost a million millionaires, who seem to be willing to spend part of their capital on consumer goods. But luxury goods for the very rich are just a limited part of a very special market.
For the luxury market a lower segment of the consumers - some might call it the middle class - are needed to draw their wallets and let that industry run.
Early in my latest Shanghai trip I wondered already how all those new luxury stores in Huaihai Zhonglu would draw enough customers to make a living. Later I would be running into the International Finance Center(IFC) in Pudong, and next door the Super Brand Mall (that had forgotten about its troublesome start) and was now swamped with potential buyers.
And it did not stop there: I could not turn a corner or yet another shopping mall with new stores for Armani, Louis Vuitton, Hermes, Chanel, Cartier, Gucci were under construction. Obvious, every district in Shanghai - where most real estate related matters are decided - thought it needed a shopping mall like their neighbors.
For any count, Shanghai seems to be heading for a glut in the luxury market, and the situation might even be worse when the analysis of economists like Huang Yasheng are correct. Most of Shanghai's GDP is spent by the government, more than on wages for the Shanghainese who are expected to purchase those Gucci bags.
In the past I have been wrong more often, for example when the first waves of giant 5-star hotels moved into Shanghai. Initially, we could not imagine those hotel chains would survive. They did and perhaps only after the WorldExpo, there might be a bit of an overcapacity for 5-star hotels. But I still keep on wondering: how many Armani stores does Shanghai need?

Comments

Post a Comment

Popular posts from this blog

40,000 hairy crabs released in Yangtze

Image
THE city government yesterday freed 40,000 hairy crabs into the mouth of Yangtze River near the Qingcaosha Reservoir, the first step in a five-year campaign to repair the ecosystem to improve the water quality in the reservoir that provides tap water for millions of residents. The hairy crabs will help establish a complete food chain in the river to help more fish and other aquatic animals survive in the river, Zhuang Ping, deputy director of the East China Sea Fisheries Research Institute under the Chinese Academy of Fishery Sciences, told Shanghai Daily yesterday. The released crabs, about half female and half male, will eat plankton while some of their offspring will become food for meat-eating fish higher in the food chain, said Zhuang, who is leading the water-improvement program. "The better ecosystem the water has, the better its water quality will be," he said. With a capacity of 438 million cubic meters, the reservoir is providing tap water to about 10 million
Keep reading

Shanghai port consolidates its position as world's busiest

Image
SHANGHAI, the world's busiest container port, will consolidate its title this year and leverage its record throughput to become a multi-faceted provider of port services. The city, which overtook Singapore as the world's biggest container handler last year, saw its annual container traffic volume surpass 30 million 20-foot equivalent units (TEU) yesterday. The figure hits an unprecedented level in the world's port history and marks a new leg in Shanghai's voyage to become a global shipping center by 2020. China's remarkable trade boom is reflected in the Shanghai port numbers, which went from 7,951 TEUs in 1978 to 29.05 million TEUs in 2010. The city's customs oversaw a total of US$790 billion worth of imports and exports in the first three quarters of this year - a 19.3 percent year-on-year increase. And its port handled 23.9 million TEUs over the first 10 months, ahead of that of 23.56 million TEUs at Singapore Port. Shanghai International Port (Group) Co,
Keep reading

Praise, scorn for teacher's odd command

Image
A middle school math teacher has stirred controversy after forcing 20 of his students to slap their own faces for three minutes because they made noise in class and scored poorly on exams. Angry local residents are demanding that the teacher resign and asking the school to announce a punishment. But some of the teacher's students, including some who were forced to slap themselves, are calling for leniency. The incident occurred in a class at Donglu Middle School in Pudong on Tuesday when the math teacher surnamed Yang ordered 20 students in his class to slap their faces after he was irritated by them making noise in class. The students said Yang was known as a very strict teacher, so almost all the students obeyed his order and started slapping themselves in the face for about three minutes. Those who slapped too lightly were told by the teacher to slap harder, students told the Oriental Morning Post. Yang's behavior has sparked anger among local residents, especially so
Keep reading