When Ivana Benda, vice president and director of design at Allied Architects International arrived in China in 1985 "the average city resident had a living space of 4 square meters and hot water was a luxury." Times have certainly changed. As China’s growing middle class moves out of publicly provided work-unit apartment blocks into privately owned skyscrapers and villas, residential investors are beginning to pay more attention to what’s inside them. Upgrading houses and offices is no longer just about basic amenities: investors are willing to pay more for a well-designed interior.
This has naturally engendered demand for interior design services, encouraged by the proliferation of design-themed domestic magazines and TV shows. This demand in turn is attracting a flock of young Western interior designers who have come here in hopes of finding a growing market with lower barriers to entry – or any job at all. One firm reported receiving three emails a week from recently graduated foreign designers seeking employment in the Chinese market.
The expats are also attracted in part by the sheer scale of China’s housing project. After a wintry 2008, housing starts and prices are recovering. According to the National Bureau of Statistics, investors poured US$149 billion into commodity real estate in the first half of 2009, up 7.3% year-on-year.
How sustainable recent price increases are in the short term clearly depends on the policy environment, but it’s indisputable that China has embarked on a long-term housing-construction binge to end all long-term housing-construction binges. According to the UN Population Fund’s State of World Population 2008 report, China’s urban population is projected to reach 910 million by 2030. These new urbanites will need somewhere to live, and presumably some will want to spend money on the interior of their new homes.
Freedom to design
Andrew Sigfrids, a young American interior designer based in Shanghai, said that a change of consumer consciousness is also driving demand.
"As more and more Chinese are exposed to the West, expectations have changed," he said. "The rising Chinese middle class is beginning to value and spend money on independent design." Sigfrids started Asig Design this year in order to sell his services to owners of small-scale commercial and residential projects who want a personalized interior.
Sigfrids finds it easier to execute "personalized" design in China. Costs are cheap, he said; he can design and build a custom dining room table and six chairs for less than US$900. It is also easier for him to find factories to execute his designs. Local factories are generally not picky about who they take commissions from, whereas in more developed markets factories frequently will only work with established companies with good reputations, Sigfrids said.
But perhaps the most tantalizing carrot for foreign designers is the fact that Chinese client tastes in interiors are still developing, and therefore remain flexible, giving designers a lot of room to exercise their creativity – for better or worse. "There is not as much protocol, restrictions, management, phone calls," said Sigfrids. "Here it is just purely design."
"The Chinese are trying to catch up with the rest of the world," added Allied Architects’ Benda. "But they have developed so fast, they don’t necessarily have a solid definition or understanding of what the ‘best’ means."
This open-minded attitude is a double-edged sword. Pal Pang, director of Another Design International in Hong Kong, said that while Chinese consumers are looking for something different, many local firms’ creative impulses are too erratic. "[Local firms] create a crazy idea and try to sell it," said Pang. He believes the results are occasionally interesting, but calls others "monsters."
On the other hand, many other local designers don’t bother with creativity. Sigfrids of Asig Design claims to have seen plenty of copying among local firms. "A lot of the designs [they] do are almost identical to a magazine picture, but they are not always functional spaces," he said.
Pang of Another Design notes that local designers rarely consider individual client requirements. Pang, who charges about US$118,000 for a general six-month retail job, puts at least a month of time and research into a client’s needs before he comes up with a design. He says this service allows him to compete with local designers, even though many of them charge a fraction of his price or even offer services for free.
"A lot of local designers just use things out of a store or use existing models," said Pang. "I never repeat myself."
More local competition
This is not to say that there is no home field advantage for domestic firms. Hank Chao, director of Mohen Design, says his firm still has a difficult time competing with local companies for design work. A lot of clients can’t afford or are not willing to pay for an original design fee, he said. One of the bigger domestic design firms, Baixing, only charges a design fee of RMB30 (US$4.40) per square meter, whereas foreign firms usually charge between RMB800 and RMB1500.
The price difference is driven by the drastically higher fees demanded by foreign designers, which restricts them to the top end of the market, designing the interiors of mansions, five-star hotels and luxury restaurants.
This market segment is quite profitable: A designer at one large international design firm who asked to remain anonymous noted that his firm can charge more in Shanghai than in Manhattan. But the top shelf is a niche market. Local design firms still take up 60-70% of total design contracts in China, according to Chao.
There has also been some erosion of the Western "brand" here. In the past, just being Western was enough to win contracts from Chinese clients eager for international cachet. One American designer in Chengdu said he was frequently paid to eat lunch or dinner with clients so they could show off their laowai designer to friends.
However, not all foreign designers are necessarily any better than their domestic competition, Chao said. He recollected a joint project with a German firm and a mainland client: "[The German designer] was really not qualified but the client saw that the designer was from Germany," he said. "They didn’t really look at his resume, and he couldn’t get the job done."
Chao’s office has since gotten rid of almost all foreign junior designers. He said that since foreign designers are more than twice as expensive but not necessarily more skilled than the local alternative, he plans to stick with domestic talent.
But Benda of Allied Architects disagrees. "The American dream is still very much alive and well here," she said. "Many Chinese clients think that a house designed by a foreigner can help them achieve a certain image."
Sigfrids also believes that there is a sustainable role for him in China. He agrees that the foreign tag is starting to wear thin, but he says what makes him successful is his ability to create something original which also stays in line with local cultural needs such as south-facing rooms and the placement of furniture.
"There is the idea that a local could do my job just as well," he said, "but at the end of the day, I can look at any of the cookie cutter projects from Chinese design firms and I know I don’t design like that.
"As people begin to get richer and richer in China, there is absolutely a place here for people like me."