On the other side of the four-month-old Disneyland Park is Shanghai Village, a gleaming new luxury retail resort that is an ambitious joint venture between Value Retail, the owners of Britain’s Bicester Village, and state-owned enterprise Shanghai Shendi.
While there has been endless chatter about Chinese shoppers flocking to UK shops to take advantage of the weaker pound, Value Retail is betting that the Chinese will skip a flight to London for Aquascutum coats or Milan for Furla handbags, and gain an appetite for shopping at home. After all, only 7 percent of China’s 1.4 billion population hold passports.
Value Retail opened its first outlet centre in mainland China two years ago in Suzhou. Launching a second outlet park at a time when markets and luxury brands are nervous about slowing growth in China could be considered an outlandish bet.
SEE ALSO: Value Retail eyes new mall and more outlets in China
According to Bain & Co research, China’s domestic luxury market shrank by 2 percent last year while overseas spending grew by 10 percent.
However, Desirée Bollier, chief executive of Value Retail, is unfazed: “I think we need to put things in perspective – until three years ago, China was experiencing double-digit and aggressive growth.
“This year China will have GDP growth of 6.7pc – which other country can claim that?” she adds.
For the past 18 months, the perceived wisdom has been that China is suffering from a consumer slowdown. However, the size of China’s retail market is tipped to overtake the US for the first time this year, while spending by the growing Chinese middle class soars.
“By 2030 there will be 255m middle-class people … this portion of Chinese spenders will be almost most equal to the entire US population,” says Bollier.
Crucially, there is also a rising enthusiasm for spending in China. McKinsey found that 55 percent out of 10,000 Chinese people surveyed believed their income would rise over the next five years – a higher level of optimism than any other developed country.
(Source: The Telegraph)