The Shopping Gap

Wang Jiping

Why is China looking to develop the world's next international shopping metropolises？

Beijing， Shanghai， Guangzhou and Chengdu： these world-famous historically and culturally rich cities are not only home to world-class architecture and infrastructure， but also alluring high-end shopping venues.

Yet as the global economy continues to grow， domestic consumer demand in China surges， and overseas tourism flourishes， these cities have begun to realize the “shopping gap” between themselves and international metropolises like Paris， Tokyo and New York City.

In response， Chinas Ministry of Commerce recently unveiled a pilot program to develop cities like Beijing， Shanghai， Shenzhen and Chengdu into world-class shopping destinations. “On a trial basis，” the ministry announced， “the government will transform cities possessing the right conditions into international shopping hubs that appeal to domestic consumers， consumers in neighboring countries and those from the rest of the world as well.”

Yet what will these shopping cities look like？

Chinese-style Shopping Cities

Chinese cities are racing to catch up with their foreign peers over attracting global shoppers. Shanghai， Chinas national commercial center， has made this a goal in its 13th Five-Year Plan. According to Shang Yuying， chief of Shanghais Municipal Commission on Commerce， while the city has made progress over the past few years， it still lags behind New York City， London， Paris and Tokyo in terms of the percentage of international visitors among all local spenders.

“I have been to the Fifth Avenue in New York City and Ginza in Tokyo，” said Singaporean Fiona Lee during a trip to Beijing. “In China I have been to the Peoples Square in Shanghai and Wangfujing Street in Beijing. The latter two are also famous commercial districts that have nice shopping environment. But I have no idea what goods of local features I can buy here.” She explained that China lacks its own brands that could attract foreign tourists like her. The most conspicuous signboards in Chinas commercial districts are mostly for European or U.S. brands like Coach and Prada and prices are no lower than outside China. Lee feels little interest in shopping here.

According to Zhao Ping， director of the international trade research department of the China Council for the Promotion of International Trade Academy， building well-developed commercial districts and competitive brands is essential to the development of globally popular shopping cities.

In recent years China has made great efforts to upgrade its commercial districts by introducing smart payment methods and improving transport facilities around these districts. But the international influence and presence of Chinese domestic brands remain limited， a great disadvantage to Chinas commercial districts and retail sector. Zhao Ping believes that Chinese cities which aspire to lure global shoppers should foster competitive brands in light of local history and cultural traditions and promote them. In this way， products with distinctive local features can gain the attention of a greater number of foreign buyers.

This opinion is shared by Shang Yuying， who says that the first China International Import Expo， scheduled for November this year in Shanghai， will be a chance for the metropolis to promote local brands， improve its standing in the international retail landscape and hopefully become a major domestic and international shopping destination.

Supportive Policies and Services

Such global shopping cities are expected to deliver great benefits to consumers. Chen Guokai， director general of the Market Operation and Consumption Promotion Department of Chinas Ministry of Commerce， disclosed that China will expand duty-free businesses and improve relevant policies to offer greater shopping opportunities to people entering and leaving the country. At the same time， China is encouraging online retail platforms to enter into partnerships with international brands while importing quality goods and services from abroad to meet the demands of medium- and high-end domestic consumers.

Another feature of these envisioned Chinese shopping cities is their proposed diversified amenities. “Tourists in Tokyo are impressed by the convenience of shopping in the city，” said Zhao Ping， “which manifests the concentration of the worlds top brands in local shopping districts， in an extensive network of convenience stores， as well as in seemingly mundane details. For instance， one can find convenience stores and vending machines in every lane.” These amenities indicate a commercial ecology backed by various supporting facilities， and can attract domestic and international investors to further expand and upgrade local commercial districts.

This understanding is what motivated Chengdu to develop three high-end commercial districts – Chunxi Road-Yanshikou， Tianfu New District， and Air Harbor New City – and upgrade one hundred commercial streets possessing distinctive local features， including Kuanzhai Xiangzi and Jinli. Chengdu is also working to ensure local residents have access to essential public services – medical care， education， sports and cultural activities – within 15-minute walk from their homes.

In Beijing， the municipal government is optimizing the distribution of commercial outlets， planning to build and upgrade 1，400 such outlets by the end of this year.

“I believe that， with the development of Chinas shopping cities， both domestic and international consumers will have better shopping experiences in the country，” Zhao Ping added.