Harrods Follows Galeries Lafayette’s Lead by Chasing Chinese Shoppers into China

    Like many luxury stores, Harrods has had an eye on the China market. But now they're putting down roots in the mainland for the first time.
    Like many luxury stores, Harrods has had an eye on the China market. But now they're putting down roots in the mainland for the first time. Photo: Shutterstock
      Published   in Retail

    Six years after the grand opening of luxury department store Galeries Lafayette’s sprawling Beijing outpost — and nearly a year after the opening of its Shanghai location — the venerable London-based department store Harrods is now opening its first permanent store in mainland China.

    Located in Shanghai’s Pudong district, the new location, which opens in 2020, is Harrods’ first outside of the UK and, according to Michael Ward, Harrods managing director, comes after a decade of China-focused investment. “If you look at all of the reports, they say, quite categorically that all of the growth in the next five years is going to come from south-east Asia. And is going to come from millennials,” Ward told Britain’s Telegraph about the store’s eastward push. “So we’ve got to go after that. It’s very important that you follow the money...We see the continued growth of China, but we see a need to be a more permanent resident in China.”

    This renewed effort in China comes on the heels of this month’s “A Very Harrods” Christmas pop-up event at the Temple House hotel, which was hosted by Ward in Chengdu and featured a slew of top luxury brands and even British doormen flown in from London.

    As Harrods sees it, China’s younger consumer is eager to bask in the aura of the Harrods brand without having to fly off to London. But is this the case? Are younger Shanghainese shoppers clamoring for a 170-year-old, Qatari-owned British department store in their city when it’s already bursting with other options like Lane Crawford, 10 Corso Como, Galeries Lafayette, K11, and dozens of high-end boutiques that lure in customers with cute cafés and coffee shops?

    Previous discussions Harrods had about entering the China market fizzled out in 2010, but with London facing a possible slowdown in Chinese high-end shopping next year, the store has the right motivation in giving Pudong a shot.

    But the question remains: How will an already luxury-saturated city like Shanghai respond? One interesting tidbit from Ward’s recent interview was how he’s emphasizing courting millennials, when, by most accounts, digitally-native and price-sensitive millennials who shop in mainland China largely avoid brick-and-mortar and view a stop at Harrods in London as a photo-op rather than a home away from home (although it's just that to a certain type of UK-based expat from China).

    But Harrods has likely learned a great deal from their French luxury retail counterpart’s experiences in mainland China over the past decade. And after the new Shanghai location drums up buzz around a star-studded grand opening, maybe it will manage to sustain momentum throughout the rest of the year? If it does this, it will certainly stand out as a lesson for other international retailers as the uncertain Chinese luxury market enters a new decade.

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