For Beijing, November is a time when a hundred
brands are blossoming a hundred bright-colored luxury brands.
Oriental Plaza, visited by 200,000 customers daily during weekends,
opened a new arcade to showcase the world's high-end consumer
items.
Just a week later, an international jewelry show is
being staged, where foreign merchants are for the first time
allowed to directly cut wholesale and retail deals with their
Chinese counterparts. The show only changed its name to
"international" in 2003.
In Shanghai, as the official Xinhua News Agency
reported, the world's third largest Christian Dior center opened
around the same time. Prior to its upgrading, the center was
already generating 11 million yuan (US$1.3 million) in annual sales
-- management hopes to increase this to over 15 million yuan
(US$1.8 million).
This is not only a feature of Beijing and Shanghai;
much of the mainland is being targeted, with cities bombarded by
the world's most expensive brands, from fashion to jewelry to
cars.
The world's fastest growing advertising industry is
bringing more international brands into the daily language and
lives of young urban people.
Of course, all this is not yet matched by consumer
spending comparable to that in developed nations, so could China
overtake one consumer power after another in the world, as it did
in general trade?
Since it was a planned economy some 20 years ago,
when even food items were rationed, comprehensive and consistent
consumer surveys have yet to be established. Most in recent years
have been conducted by the urban survey department of the National Bureau of
Statistics?(NBS). But these are tailored for macroeconomic
decision-making and too broad to reflect much of significance to
specific sectors.
A recent NBS survey shows that urban households
making 200,000 yuan (US$24,096) to over 1 million yuan (US$120,000)
per year make up 22 percent of the nation's entire urban
population, but this doesn't necessarily reflect wealthier people's
tendency to have multiple sources of income.
Chinese internet services recently quoted a Morgan
Stanley analyst as saying that the actual number of individuals who
can afford some luxury spending is around 1 percent of the mainland
population, or around 13 million although the figure could quickly
rise to 100 million.
These are just the broad figures. As for the rich
people who really want to buy luxury items all the time, the number
is understandably much smaller. According to Yue Zheng, a
Shanghai-based consumer analyst, they number about 100,000 in
Shanghai, and China's total luxury spending is about US$2 billion
despite its admittedly fantastic growth.
Just like everything in China, too much change too
quickly can mean a rough, if not truly dangerous, ride. Too much
enthusiasm, once seen as a single-minded chase of the rich and
powerful, may at times appear arrogant and distasteful.
In fact, like consumer societies everywhere in the
world, there are plenty of people who don't like big companies and
big brands, and good marketing that responds to the needs and wants
of local cultures?is always more successful in the long
run.
(China Daily November 15, 2004)