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Friday October 4, 2013 MYT 12:00:00 AM
Friday October 4, 2013 MYT 7:36:22 AM
by desiree au
Europe comes to China: Statistics show that four out of five Chinese visitors to Britain stop at Bicester Village, an outlet shopping mall near London. Shanghai will soon have its own designer outlet mall ‘village’ in nearby Suzhou. — Value Retail
As China’s growth comes out of its recent slowdown, the trappings of luxe lifestyles are becoming increasingly apparent.
THE shopping bags seen on the streets of Shanghai will have a lot of new logos come the last quarter of this year.
This cosmopolitan city, mainland China’s fashion capital, already has marked the opening of 10 Corso Como Shanghai, the third outpost – after Seoul and Tokyo – of the celebrated concept store in Milan.
Later this month, Lane Crawford, Hong Kong’s oldest department store, will unveil its 14,000sqm flagship store in Shanghai.
And Value Retail, Europe’s most successful luxury fashion outlet operator, will open Suzhou Village just an hour outside the city, where off-season designer fashion will be available at a discount.
All three operations say Shanghai is important to their growth in mainland China, and understanding the Chinese shopper will be vital to their success.
Currently, “60% of all luxury goods are purchased overseas, as imported goods are much more expensive at home,” says Elizabeth Flora, editor of the China luxury information website Jing Daily. She noted that Beijing’s current antigraft campaign had affected some retail sectors commonly associated with “gifting” to officials but that it had not touched fashion.
“China takes time and patience,” says Andrew Keith, president of Lane Crawford. “It’s very different to Hong Kong, and is a myriad of markets and has cultural and physical diversity you would see in a continent like Europe.”
Amid the bustle of Nanjing West Road, Shanghai’s busiest pedestrian shopping street, 10 Corso Como’s 2,500sqm, glass-enclosed building is an imposing addition.
Designed by the American artist Kris Ruhs, the airy, four-level space combines a fashion and lifestyle boutique, an art gallery and a restaurant, all curated by the company’s founder, the art dealer and publisher Carla Sozzani.
The store, which opened mid-September, allows customers to shop for designs like clothing by Comme des Garçons and Maison Martin Margiela, limited-edition Adidas sneakers by Tom Dixon, kitchen accessories by Alessi and furniture by Fornasetti; view a pop-up art exhibition; or have coffee.
“Shanghai’s vibrant art and fashion scene is an ideal location,” says Sozzani, who opened 10 Corso Como in Milan in 1990. “I love the proximity to Jing’an Temple and a park. It is a nice balance of modernity and tradition.”
Noriko Villanti, business director of the Shanghai store, says there is no difference between its operation and that of the Milan original: “Everything is selected by Carla, in the same way Kris Ruhs’s signature is reflected in every piece of furniture, wall or lighting fixture.
“However, in the future we’d like to work with Chinese designers, which will be a distinctive trait of 10 Corso Como in Shanghai,” Villanti continues.
“Our destination is essentially a curated space for experiences; a cultural investigation among the galleries, where customers are encouraged to meet and engage in a wide variety of ideas.”
The project is backed by Trendy International Group, a fast-growing Chinese retail operator partly owned by the L Capital division of LVMH Moët Hennessy Louis Vuitton. Trendy also owns the women’s fashion brand Miss Sixty.
If it is, he continues, “we will definitely open in Beijing and other key fashion cities.”
Also targeting fashion-forward customers will be Lane Crawford’s store, scheduled to open this month at Times Square Shanghai, in the business district of Huaihai Zhong Lu Shopping Street.
In contrast to 10 Corso Como’s highly selective offerings, Lane Crawford Shanghai is billing itself as a platform for more than 500 fashion brands, including what it says is the largest beauty retail department in the mainland. The 3,000sqm area will have a hair salon and private cabins for beauty treatments.
Niche designers like Thakoon, Jason Wu and Alexander Wang will headline the fashion selection, along with Givenchy and Balenciaga. There also will be a plethora of emerging Chinese designers like Liu Min, Christine Lau and Helen Lee, all of whom price their creations starting at several thousand renminbi.
“It’s bigger than any store we’ve ever done,” Keith says. “In terms of merchandising, Lane Crawford is unique,” with Greater China’s largest range of designers and accessories as well as collaborations on exclusive designer products.
Customer service is of critical importance, Keith stresses.
“The store will feature an area dedicated to VIP customers, personal shopping suites where we offer personal stylists, lifestyle and cosmetic concierge, and private space for customers and their friends to spend time,” he explains. “It’s important that the people of Shanghai feel like it’s their store – bring their friends and hang out.”
Statistics show that four out of five Chinese visitors to Britain stop at Bicester Village, the outlet shopping mall near Oxford, about an hour by train from London.
With that in mind, Value Retail, which operates nine outlet malls in Western Europe, chose Suzhou, near Shanghai, for its first project outside its home region. It is scheduled to open in the first quarter of 2014, with a second location near the soon-to-be-built Shanghai Disneyland planned for 2015.
There are other outlet operations in China, like Lane Crawford’s Surprise Outlet near Beijing Capital International Airport. But Suzhou Village’s premium offering – already touted on a website that positions the village as a destination, offering help to travel professionals in 14 languages and international delivery of purchases – is expected to be a game changer.
With its airy, open design and high-end brand mix, Bicester Village is the highest grossing shopping centre in the world per square foot, with its 2013 revenue hovering around US$37,700 (RM122,000) per square meter, before sales tax, according to Scott Malkin, chairman of Value Retail.
Working in partnership with design houses like Gucci, Valentino, Ralph Lauren and others, Value Retail and its partner in China, SMG Retail, have invested US$100mil (RM323.5mil) in Phase 1 of Suzhou Village, which is to have more than 100 shops totalling 35,000sqm.
“Shanghai is the most important commercial city in China, and Suzhou, which is just an hour away, is a dominant internal tourism hub that receives 80 million visitors a year within China and three to four million foreign tourists,” Malkin says. “We will be providing an experience in shopping tourism while allowing our brand partners to sell their surplus stock in a way that defines their brand and reaches aspirational customers.”
While Suzhou Village has not announced its occupants – which pay for their space with a percentage of sales, not rent – they reportedly include fashion houses like Valentino and Hugo Boss.
The jeans giant Diesel says it will have a presence in Suzhou Village. “This outlet model works really well for us, because our customers at the outlets are different from those who visit our boutiques,” says Christophe Archaimbault, president of Diesel Greater China. “They are paying 50% less for a pair of jeans at the outlet, and we reach a demographic who otherwise will not be spending with us.”
All foreign brands pay import duty for goods entering China, making retail prices as much as 30% more than those in Europe or the United States, so the outlet village will be a way for brands to offload previous seasons’ merchandise and recoup some of their costs.
“We’ve studied the consumer character of the Chinese, and the speed at which they are moving is unparalleled in the world towards high sophistication, new designs and fashion trends,” says Malkin, the Value Retail chairman.
While all agree that Chinese consumer behaviour is changing rapidly, it is still early to tell whether these new concepts will succeed. Lane Crawford previously operated a store in Shanghai that was not successful and closed in 2006. But then it opened in Beijing in 2007.
“When we first opened in Shanghai, Lane Crawford operated as a franchise in Shanghai, Harbin and Hangzhou,” Keith says. “We terminated our franchise agreements to open our own stores, take back our brand in order to roll out a new model better suited to the demands of the local market.
“We believe the market is now at a stage when consumers are ready and in need of the variety and services our business model offers: connected commerce in China, online store, physical locations with cross-channel servicing.” – IHT
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