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Shanghai abounds in luxury shops
Plaza 66, Citic, Portman, New Sogo, Times Square, Three on the Bund and soon 18 on the Bund: in China's wealthiest city Shanghai skyscrapers are pushing through old suburbs and temples to luxury abound.
Christian Dior, which has been in China since 1998, has, for example, doubled its space at its top-flight Plaza 66 store and is planning to open Dior Hommes in December to join Hermes, Vuitton, Prada, Celine, Versace and Cartier at the elite location. Shanghai is the most international city in this vast country and counts a high number of Western and Asian expatriates among its population of 17 million people. Many among the Chinese diaspora have also returned to put down roots, such as Yue-Sai Kan, one of the most powerful women in China. In 1992 she successfully launched the first Chinese cosmetic company, which has since come under the control of cosmetics giant L'Oreal with Kan as vice president of its China operations. But Shanghai is an expensive city in a largely poor nation, in which McKinsey consulting estimates only 300,000 people from a population of 1.3 billion have more than one million dollars' in assets, excluding property. This has made the metropolis merely a shopwindow for most, displaying luxury items that are highly taxed in mainland China. "Prices can be 30 percent higher in Shanghai compared to Hong Kong," Penhirin said. People are still buying though, with gifts to smooth business transactions and pamper wives and mistresses making up a "not insignificant" part of the turnover, he said. Dior couture and perfume Asian representative Pierre Denis is in no doubt that "luxury in Shanghai, as in China, is a reality." "China, with Hong Kong and Taiwan included, represents 10 percent of the business of Christian Dior couture," he told AFP. For Chinese consumers, "luxury begins with handbags and skin creams or lipsticks," he said. Most interested are a new generation of women in business, aged between 25 and 35, he said. Nonetheless, an average Dior bag is double the city's average monthly wage, retailing for between 6,000 and 8,000 yuan (US$725-950) with the mean salary between 3,000 and 4,000 yuan. Not all the labels have set up shop in Shanghai, but the most important are here and they agree that there is strong potential in the Chinese market. It is a matter of "familiarising the Chinese with the new names that they do not know and are beginning to see in the local fashion magazines," Denis said.
But for the great majority of the population, including the new middle class which prefers to spend their money on Ikea furniture for homes that have become very expensive to buy or to rent, the dress code is jeans and sportswear and the huge black market the only possibility for the brand conscious.
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