Reports

    China's luxury map spreads as Chanel opens first boutique in Zhengzhou

    Expanding from developed coastal areas into central China, luxury brands are spreading out in the market. Is the city a new Chinese luxury hub?
    Zhengzhou is now the 11th city in mainland China to become home to all of the five top luxury brands: Chanel, Louis Vuitton, Hermès, Dior, and Cartier. Photo: Chanel
      Published   in Retail

    What happened#

    Chanel opened its first boutique in central China in early December, the maison’s 18th store in the country since entering the market 24 years ago.

    The 841-square-meter store, located in David Plaza, a luxury mall in the province's capital, Henan, displays a full range of products, including ready-to-wear, handbags, shoes, costume jewelry and eyewear, along with a selection of watches and fine jewelry pieces.

    Zhengzhou, the center of China’s Central Plains Economic Zone, boasts a strategic geographical advantage that enables Chanel to boost its visibility and access the vast, yet underserved population in China’s central region.

    The Jing Take #

    In 2022, Zhengzhou's GDP topped 1.3 trillion RMB ($198.99 billion), becoming the 15th city in China that has both a GDP exceeding one trillion RMB and a population exceeding 10 million.

    Chanel's 841-square-meter store is located in David Plaza, a luxury mall in the province's capital, Henan. Photo: David Plaza
    Chanel's 841-square-meter store is located in David Plaza, a luxury mall in the province's capital, Henan. Photo: David Plaza

    In Yicai Magazine’s "Ranking of Cities’ Business Attractiveness in China 2022,'' Zhengzhou ranked seventh among the other rising first-tier cities like Chengdu, Hangzhou and Suzhou, where luxury brands are making significant inroads after saturating top-tier cities with stores.

    With the recent openings of Hermès and Dior stores, Zhengzhou is now the 11th city to become home to all of the five top luxury brands: Chanel, Louis Vuitton, Hermès, Dior, and Cartier.

    However, Zhengzhou stands apart from the four top cities – Beijing, Shanghai, Guangzhou and Shenzhen – where young graduates tend to settle down. A significant portion of Zhengzhou’s population leaves each year due to limited employment opportunities and relatively low salaries. Consequently, these luxury stores in Zhengzhou are likely to attract a considerable number of first-time buyers.

    Zhengzhou holds great potential, given its population and its role as a transportation hub with far-reaching influence over nearby cities in central China. However, as luxury brands are quickly expanding into other regions of China, it becomes imperative to deploy tailored strategies to navigate the diverse layers of each urban market effectively.

    The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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