Saying that high end luxury is a growing trend in Beijing is an understatement, it’s getting to the point of overkill as the market seems incredibly saturated. I've talked about the luxury trend in hotels, restaurants, and bars, but its just as bad (or worse) when it comes to malls.
In the relatively short distance from HuaMao, down Jianguomen and onto Changan Jie ending a bit north of Fuxingmen, one would come across 5 Cartier stores (Huamao, Guomao, Yantai (coming soon), Peninsula, Xin Dong An (coming soon), Parksons (why not at Seasons Place?)), 4 Hermes stores, and 3 Louis Vuitton boutiques. Compare that to Chicago, America’s 3rd largest city with a much higher per capita income and larger number of millionaires than in Beijing which only offers 1 of each of the above stores.
This begs the ultimate question: who is shopping (and buying) at these stores and how can they survive? At Wangfujing, within a 10 minute walk you come across 3 Nike stores and 4 Adidas shops, not to mention the sporting goods mall which has one of each. The difference is that these stores sell goods that are obtainable by the average Chinese person. Most Beijingers can afford at the very least a hat or tshirt at Nike, which can be purchased for around RMB200 or less. Shop sizes differ from the mammoth Nike store in Dongfang Plaza to the small shop on the walking street to the impressive (but limited floorspace) XinDongAn store. The stores, with their huge swooshes, serve as permanent, additional advertising for the Nike brand.
That isn’t the case with Cartier. Even many white collar Chinese, the kind that might be able to afford Cartier, aren’t that familiar with the brand and its history. Nor can they really afford the wares offered inside which start at around RMB20,000 and go up, up, up. Isn’t part of being an exclusive, high end brand making the customer come to you? Unlike Nike, which can serve as an impulse purchase for someone who may have just intended on browsing, a person goes to Cartier knowing they want to buy something and having done their homework, nobody (well, very, very few people) are just going to stumble upon a Cartier and decide to drop RMB50,000 on a pen.
The rush to expand now has to do in large part with the Olympics (hell, everything is connected to the Olympics somehow), as (very rich) foreigners descend on Beijing for a month of great sporting accomplishments and conspicuous consumption. However, once the last medal is handed out and August’s revelry turns to September’s hangover, it will be interesting to see how, longterm, these ultraluxury brands can maintain so many stores in such a small space.