GUANGZHOU RISES AS LUXURY GOODS DESTINATION
While luxury shopping vacations have become all the rage in recent years, for many Chinese, bargains are just around the corner. Guangzhou in Guangdong providence has emerged as a major outlet for luxury goods.
La Perle, a luxury good mall established in Guangzhou in 2004, enjoyed double-digit sales increases in 2011, according to its public relations officer, Wang Yan. The number of the mall’s VIP customers surpassed 6,000, with 80 percent of them being locals. To become a La Perle VIP customer, one needs to spend 25,000 yuan ($3,964) in a day or 50,000 yuan over six months. Even with such restrictions, the number of VIP customers grew by 20 percent last year.
However, in a place where money is no object, supply often is. The Hermes store at La Perle maintains a wait list of at least a year for an Hermes Birkin bag. It’s a similar story for Celine’s Mini bags, too.
“It’s been a new phenomenon in the past two years that the supply of goods has fallen short of demand,” said Wang.
Even a growing number of stores hasn’t been able to satiate the rapid growth in demand among Guangzhou residents. TaiKoo Hui, a shopping mall established by Hong Kong-based Swire Properties Ltd, opened for business in September 2011. The complex houses over 70 international brands, including Chanel, Miu Miu, Giorgio Armani and Tiffany & Co.
While Guangzhou residents are known to be pragmatic spenders who are willing to travel to Hong Kong to buy discounted luxury goods, there is a shift among luxury consumers in this city. Now, some find the shopping experience becoming more important.
A good example of this new Guangzhou luxury shopper is Sara Lu, a sales manager of a clothing line, who prefers to shop in the city’s luxury stores:
“When shopping in luxury stores in Hong Kong, I felt as though I was buying bargains instead of a luxury item,” said Lu. People kept telling her how inexpensive it was and Lu would pile items into her basket because they were “cheap”.
“And in the crowded stores, sales people might be unable to offer everyone good service and were too busy to give a thorough introduction about the products,” added Lu, who is unwilling to sacrifice the pleasure of appreciating luxury brands simply to save several thousand yuan.
“I should enjoy a luxury shopping experience when I shop for a luxury item,” she said.
The price difference of luxury items in Hong Kong and Guangzhou is diminishing since some luxury brands have revamped their prices to minimize the contrast. So, it is not surprising to find prices of some Chanel handbags in TaiKoo Hui in Guangzhou lower than those in Hong Kong.
Note from Ricardo:
It is becoming everyday more important the experience and the internal satisfaction on the quality of the product then the possession of a branded product at the cheapest possible price. China is maturing fast from “Bling” to enjoyment of quality and craftsmanship.