Some of my observations:
- EVERY major luxury brand is represented here from all around the globe; I have seen some of the most EXCLUSIVE brands from Europe, the US, Asia and the Middle East here. Many of the stores have multiple sites across Shanghai so they aren’t just concentrated in the tourist areas. They occupy huge spaces of real estate; Cartier and Tiffany are the largest stores I have seen to date.
- The ethnicity of the primary consumers at the stores appears (to my untrained eye) to be Chinese, I’m not sure if they are from Shanghai or Chinese tourists from other major cities.
- BMW, Mercedes and Audi’s are plentiful in the streets of Shanghai; I even saw one of the very newly launched Electric Jaguar’s, a couple of Astin Martins and a few Bentleys too.
- BMW, Mercedes and Audi all had sales growth of between 35-77% in 2009 (Even during a global recession)
- China is BMW’s 4th largest market after Germany, UK and the US
- Several Stores sell evening gowns which start at $50,000 and up, it makes me wonder what sort of events the Chinese elite attend to wear dresses of such cost.
- 7 out of 10 Chinese women are carrying a designer handbag from a luxury brand (Yes I did sit down and count how many out of 100 women were carrying a brand I recognized) This spans all age ranges, grandmothers and schoolgirls alike were all included in the count.
- Diamonds are a plenty here – every few stores on Haui Hai road is a jeweler. One necklace I saw (Picture below) is the Equivalent of $260,000 USD. (Yes I do want it!)
- There is even a market for luxury products for children: A seven story department store sells nothing but Barbie products, every Barbie ever made, with all the accessories, clothes, housing, office furniture and spas that Barbie or her owner could ever wish for.
- Luxury living is all the rage here. There are a plethora of high rises which contain luxury apartments with services and amenities which include pools, gyms, cleaning services, food services, laundry services and concierge services.
Today I came across an article in Newsweek entitled “China is Richer than you think” This article went a long way to explaining how Chinese consumers can afford all these Gucci bags, BMW’s and glitzy apartments. The article discusses the results of a recent study sponsored by Credit Suisse to understand if the super inflated Chinese real estate costs are about to cause a crash in the real estate market
Some of the shocking facts from the study
- China’s richest 10% of the population had a whopping $20,500 of disposable income in 2008
- Disposable income across the entire economy is 90% higher than government reports
- Chinese households hide $1.4 trillion, equivalent to 30% of China’s GDP
- Grey income – bribes, gifts and undeclared earnings play a major role in the incomes of the elite and are not even accounted for in the surveys.
All I can say to the Western world is that China is not an “Emerging Market’ it has already “Emerged”
There is a very famous nightclub here called DKD which very aptly stands for Decadence Kills Depression – the name epitomizes all that I have seen in Shanghai this week. If DKD opens another branch, maybe they can call it CKC – Capitalism Kills Communism?
- China is Richer Than You Think; Decadance Kills Depression. (divabiotech.wordpress.com)