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By Steve Kelman

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Dispatches from China

Here’s a collection of brief dispatches from a land of conspicuous consumption:

I had read an article somewhere in the Western media to the effect that sales in most luxury emporia in China – the often-enormous outlets for Louis Vuitton, Hermes, Cartier, etc. – were pretty small, because a lot of wealthy Chinese used the Chinese stores just to look, and waited to buy until they were traveling abroad, where prices for the luxury items were considerably lower than in China. I raised this with a Chinese friend in the luxury industry, asking whether these stores in China would be able to survive. No problem, she replied. First, the luxury companies were aware that their Chinese outlets functioned significantly just as shopping windows, but regarded the investment in Chinese stores as essential for maintaining their brands, so Chinese would buy them abroad. Second, many mall owners gave these luxury stores free rent, because their presence raised the mall’s stature and allowed them to get higher rents from other tenants.

A number of American brands are becoming increasingly dependent on China – Coke is putting literally billions into investments in Chinese production capacity, and if you read the annual report of Yum Brands, which owns KFC, you would conclude the company is all about China, where it leads McDonald’s in market share. So it is interesting that a significant number of the Chinese students I have asked about this say they don’t go to KFC or McDonald’s, and don’t drink Coke. Not out of anti-Americanism, but for reasons Americans would recognize – the food is fattening and unhealthy. These students aren’t necessarily typical, but they may be harbingers. If I were these companies, I’d be slightly worried.

Wine is slowly becoming the tipple of choice for an element of the chic and the wealthy, though it is far from displacing China’s famous (I would prefer to say “notorious”) baijiu grain alcohol, especially among government and Communist Party officials, for whom no banquet would be a banquet without it. With their passion for brand names, Chinese have become big buyers of high-end French wine. But I was interested to see in visiting an upscale Chinese supermarket a wine section, dominated by mid-range French wines, but also featuring some American, Chilean, and Australian varieties. China is itself now the sixth largest producer (by volume) of wine in the world, just behind Argentina and ahead of Chile. (The US is fourth.) 

Macy’s is setting up a Chinese website to sell their products, both branded and store brand, to Chinese.  China Daily reported, to my surprise, that “the retailer is a household name in China, largely thanks to the Macy’s Thanksgiving Day Parade, which is broadcast internationally each November, and the holiday movie Miracle on 34th Street, which was set at the company’s Herald Square store.”

The latest trend among graduating college students, according to another article in China Daily, is  to wear formal wear popular during the Republican period (1911-49), such as the high-collared suits worn by Sun Yat-sen for guys or qipao (often called “cheongam” in the West) for girls, rather than Western-style caps and gowns. This is an interesting fashion statement, indicating independence both from excessive Westernization and from the styles of the Communist era.

Posted on Jun 14, 2012 at 12:09 PM


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