It’s been China conference season for the investment banks where thousands of fund managers pile into windowless five-star hotels, BlackBerrys poised like lightsabers, to quiz the so-called China experts and corporate investor relations people. I am a so-called China expert, and so had to put a tie on and turn up. For years I’ve done this and spoken about retailing, shopping and consumption in China to small audiences interested in such esoteric subjects. I’ve invariably been the lone "expert" on consumers. No longer, though. This year, legions of instant consumer experts took to the stages of various five-star hotels to pontificate on the Chinese shopper. Perhaps I should be nervous? I am a bit. When so many people speak on one subject it represents a peak – and we all know what follows a peak! I’m sure some of these people were the same ones who told me to put all my money into dotcoms way back when.
There’s an outbreak of bull in Shanghai. I’m starting to think the bull might be replacing the dragon as China’s favourite symbolic creature. I spent a morning looking at a rather striking sculpture of a bull at the Shanghai sculpture park, and that afternoon went to see the new (not at all similar to New York’s Wall Street, you understand) bull down on the Bund. I commented to a local official that Manhattan had already done bulls – couldn’t Shanghai find a vibrant, thrusting beast of its own? But they’re different, he pointed out: Wall Street’s bull has its head facing downward, indicating lack of vision and direction, while Shanghai’s bull gazes upward – to the future, to greatness. I went home. There’s only so much bull one China expert can take in a day.
The grand opening of the UNIQLO (9983.TYO) "Global Flagship" store on Shanghai’s Nanjing Road was quite an affair. The firm certainly staked out its territory in the city, although there are also global flagships in London, Paris and New York. UNIQLO has been popular but hasn’t exactly performed gangbusters since arriving here in 2002. But the effort put into this store and expansion nationwide – I recently was in a busy UNIQLO in Chengdu – show that Japan’s leading smart casual, value-for-money clothing chain sees China as the future. It’ll be interesting to see if they can give the category killers Zara (ITX.BMAD) and H&M (HM.OMX) a run for their money.
Is Shanghai the place to launch a retail brand anymore? UNIQLO thinks so, but not everyone agrees. "Take the countryside, storm the cities" is the mantra for many provincial brands that make money in tier-two and tier-three cities before opening in Shanghai or Beijing. Now some are asking, why bother with the gilded tier-one cage at all when the real money’s to be made on the outside? I know of at least two or three newly establishing fashion brands that have no immediate intentions of opening stores in either Shanghai or Beijing.
Talking of people expanding, IKEA seems to be getting a bit more traction these days – hard to prove it though, given that numbers are sporadic from this doggedly private company. Still, after a few years of price slashing it appears that the concept championed by IKEA, Best Buy (BBY.NYSE) and a few others – own brand, sales people who can sell you anything in their department – is catching on. But has the slow plod of these retailers (certainly compared to other markets they operate in) paid off as a slow-and-steady strategy, or is it that the fast-maturing Chinese consumer caught up with them? It’s probably a bit of both.