This week in the news, ‘lifestyle’ malls are taking creative approaches to attract customers, Chinese may once again begin buying luxury products at home, Tesla forges ahead in China despite disappointing sales, Chinese fashion designers descend on Beijing for Mercedes-Benz Fashion Week, and travel is changing for Chinese consumers.
Due to the explosive growth in shopping malls in China and the country’s e-commerce boom, Chinese shopping malls have found creative ways to lure in customers. The most important aspect of these shopping malls’ strategies is changing the focus from consumption to creating a social environment where shoppers can spend time with friends and family. The trailblazer for this trend was Shui On Group’s Xintiandi shopping district in Shanghai, opened over a decade ago, which integrated into the design tiles and facades from the 1920s and 1930s shikumen (stone warehouse gate) housing. Mixed with the traditional design, Xintiandi offers shopping, dining, and entertainment to guests. The new crop of lifestyle malls has taken Xintiandi’s model even further.
Since the European Central Bank announced that it would launch a quantitative easing program to stimulate economic growth in the region, the euro’s exchange rate with the yuan hit its lowest ever rate, which meant big deals for Chinese travelers in Europe and expensive luxury products for buyers in China. With several prominent European brands lowering their prices in China, the Ministry of Commerce will look to expand and stabilize domestic consumption in China in 2015. Chanel has already lowered its prices in China, announcing cuts of nearly 20 percent on several product lines in March with other prices leveling off throughout the year. Louis Vuitton has announced an 18 percent price drop in the country, and Versace is expected to announce price drops for May.
Though electric car maker Tesla Motors recently laid off around 200 of its 600 employees in China due to poor sales, Tesla CEO Elon Musk is undeterred in China and plans to localize production in the country. “We have a strong long-term commitment to China, and we tend to establish both local production and local engineering in China,” Musk said, adding that localization could take place within three years. Until the company establishes production in China, it will continue to ship its cars from its United States production plant, which still is not at full capacity. Tesla will take a long-term approach to China with a focus in the near-term on expanding its super-charging network and increasing its stores and service centers in the country.
Mercedes-Benz China Fashion Week A/W 2015 wrapped up on March 31st after a week-long run in Beijing. China Fashion Week was again an international affair, as in years past, but this one seems to have the Chinese tourist in mind with a particular emphasis on brands from popular Chinese travel destinations in the Pacific Rim. The show featured a mix of Chinese Fashion Week mainstays such as Bosideng, Dancing Wolves, JeansWest, W&F Bird, and Sheguang Hu, along with a number of exciting upcoming Chinese fashion designers such as RanFan, JNBY, ILOVECHOC, and FADVSUN. Designers were not afraid to take risks with colorful designs juxtaposing different fabrics and styles. There was also a large focus on children’s wear.
A recent report by travel site Qyer.com shows that China’s young travelers are increasingly choosing to organize their own trips, rather than take part in package tours. Independent travelers made 77 million of the 109 million out-bound trips from China in 2014, an approximately 20 percent increase from the 64 million independent travelers of 2013. Over 70 percent of last year’s outbound tourists traveled independently. The tourists of 2014 spent an average of 8,173 yuan (HK$10,300) on their travels, a figure slightly lower than the 8,298 yuan average of 2013. Though Asia was the favorite destination for over half (55 percent) of China’s independent travelers, the popularity of Europe and North America shows that China’s tourists are broadening their scope.
image credit: cfw