During our interview he stood up and walked into the next room, returning in a cashmere suit. "It is Gregory from Italy," he said, excitedly. "Warm and light. Only 4,000 yuan ($645)."

Zong is trying to sell his new venture - an ambitious plan to develop a Chinese version of London's famous store Harrods or Paris' Lafayette.

WAOW Plaza, a name partly coined from the initial characters from Wahaha and Europe in Chinese, is expected to develop into a chain of high-end shopping centers for European and American luxury brands.

But unlike the first-tier luxury brands, the brands to be sold at WAOW, while being well designed and popular, are largely unknown by Chinese customers, Zong said. He also plans to sell some brands from the United States and the United Kingdom. "They are good at innovation and update their product lines quickly."

Customers in WAOW Plaza, which is owned by Wahaha Group. The plaza is expected to develop into a chain of high-end shopping centers for European and American luxury brands. [Photo / China Daily]

The first shopping mall opened last month in Hangzhou, having been established in just four months. Retail experts are worried the facility's simple layout, scarcity of visitors and the fact that Zong has moved out of his comfort zone, where the business return is much faster, do not bode well.

"Nothing at an early stage is perfect," Zong said, in his low but firm voice. "But it will grow quickly."

Zong insists his experience in selling soft drinks can be used in the luxury sector. The secret is to shorten distribution channels to save costs while speeding up advertisement and development, he said.

Loathing the high cost of first-tier luxury brands, Zong's model is to establish a buying system that entails importing products from international producers directly to lower the prices.

"We need luxury goods that are affordable to younger generations," he said. "Chinese white collar workers have grown smarter and smarter and question whether it is worth buying a 100,000-yuan bag."

According to a survey by Roland Berger Strategy Consultants in 2011, brand awareness is important for Chinese buyers of luxury goods, more so than design, quality and price. Many brands are rejected in China because they are not known, not because it doesn't suit the potential customer. But the report said in the future the question of "whether a brand suits me" would become a more important factor for Chinese people when deciding whether to buy a luxury good.

The idea to start the retail business emerged last June when Zong discovered from his overseas trips that second-tier luxury products of good quality do not have to be so expensive if unnecessary distribution methods are cut.

He led an investment team to Italy, France and Spain and brought back brands such as Castangia Dal and ANNA, from Italy and Groc from Spain. His other deals included Italian wine and olive oil.

 

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