Monday, December 20, 2010

Shanghai's Huai Hai Zhong Lu seeking queues for luxury goods

Wrong queues at Huai Hai Zhong Lu
The famous Huai Hai Zhong Lu in Shanghai, main street of the former French Concession, celebrates its 110th anniversary this year. Reason enough to go today on an inspection tour of one of China's most important shopping streets and see what has changed in the past few years.
Over the past few years, Huai Hai Zhong Lu has been focusing on the high end luxury market. That move is especially clear in the segment east of Maoming Lu. On both side of the street, in pretty recent developments, previously shabby shops have been turned into life advertisements for all the global brands you can think off. It is the kind of street you will find in Zurich, London, Berlin, or any other city that strives for world fame.
We also noted queues of eager consumers in this segment of the street, but not at the luxury stores. The redevelopment has not wiped away the old popular food stores that sell those tasty goodies, the Shanghainese crave for. That was where we noted almost all afternoon hungry consumers.
How different was the shopping experience in the stores for luxury goods. We were here on a lousy Monday, so that might not be indicative for the whole week, but they were pretty empty. The idea of clustering famous global brands in one segment of this miles-long Huai Hai Zhong Lu is a smart one, but might be five to ten years too late. Shanghai is already stuffed with other outlets of the same or similar brands, and a new row of the same stores, be it in a better location, might not do the trick.
In the past, owners of luxury good stores in Shanghai could tell with a watery mouth that every now and then one of the new rich Chinese out of the provinces would drive to their store, buy half of it, and go home. Many of the two- and three-tier cites now have the luxury stories of themselves, and those goods are also available outside Shanghai. And more of the new rich Chinese, say many researchers, would rather buy those goodies in Hong Kong or Europe, pay a premium, but get a more fulfilling shopping experience.
We hope all those global brand will continue to pay the price for such a great shop on a great location. We do not promise them a very profitable revenue stream.
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