Rise Of The Aspirational Market Could Lead To Tiered Luxury#
Recently, French fashion house
Roger Vivier#
-- creator of the Stiletto heel -- opened its third mainland China location at Shenyang’s Mall Forum 66, shortly after unveiling its Beijing Yintai Centre flagship and two years after entering the market with an inaugural Shanghai flagship at Plaza 66. Speckled with high-profile guests like popular fashion blogger Han Huohuo in Shenyang, and actress Zhao Wei and supermodel Du Juan in Beijing, Vivier's grand openings have ensured a great deal of exposure on Sina Weibo.
At 360 square meters (3,875 square feet), Shenyang's new Roger Vivier flagship dwarfs Beijing's 80 square meter location and is one of the label's largest global boutiques, set in a city that has emerged out of nowhere to become one of the top luxury markets in China. Like Beijing, the Shenyang boutique sports a the new
Maison Roger Vivier#
design concept, and offers a limited edition collection of clutches, belle de nuit and limelight pumps in red, blue and yellow in leather or in silk satin in celebration of the openings.
While some luxury sectors -- and some brands within those sectors -- are faring worse than others in the face of a still-fragile global economy, Roger Vivier’s gumption to open new locations and build a presence in a second-tier city like Shenyang reflects the brand's apparent confidence in the growing aspirational markets in lower-tier China.
In brandchannel’s recent interview with Shanghai business intelligence firm Z.H. Tank, Andrew Tan of Reckitt Benckiser said that by 2020, much of the predicted 11 percent growth in China's retail sales sector will come from the middle class living in the nation's "second and third tier" cities, where much of the retail will be focused on luxury and attainable luxury, such as Coach, Starbucks and BMW. Ironically, Tan pointed out that some of this retail growth in second and third tiers will come from the millions of dollars that migrant workers in first-tier cities send back to their families.
As noted in the brandchannel article, "Brands that have put more effort in quieter expansion into the interior of the country in recent years, for example Coach and BMW, are simply benefitting from the organic creation of the new consumer class there rather than working any magic." Thus, a sort of tiered luxury market is arising in China, one that long-term thinkers like Roger Vivier are anticipating.
Much of this simply comes down to how far behind second- and third-tier cities in China are, in terms of the quality of their shopping venues. With new shopping center construction slowing markedly in saturated top-tier cities in recent years, second-tier Chinese cities continue to present opportunities for domestic and international property developers. Less likely to jet off to Europe or even Hong Kong to do their high-end shopping, consumers in inland China have shown a greater propensity for local consumption, flocking to super-sized malls packed with everything from grocery stores to IMAX theaters.
In the hopes of tapping the growing middle class in inland second- and third-tier cities throughout China, developers have built at least 20 million square meters worth of shopping centers in 14 major cities over the past 10 years, according to data released this summer by the CBRE group, with a further 15 million square meters currently under construction.
According to the CBRE report, Shenyang, Wuhan and Chengdu ranked in the top 10 cities with the most shopping space, out of 180 major urban centers around the world. So while some may scratch their heads about Roger Vivier's choice to target Shenyang right after opening in Beijing, China luxury market observers can see that it's not entirely unexpected. As Jing Daily pointed out last year in our profile of the city of at least 8.1 million (which has seen other flagship launches this year by the likes of Zegna and Chaumet):
A key transportation and trade hub owing to its proximity to Russia and North Korea, Shenyang, capital of Liaoning Province, has seen its fortunes increase fairly rapidly over the last couple of decades. With the ensuing increase in the number of wealthy residents, major luxury brands have begun to stream in, and the city now boasts two Louis Vuitton boutiques, a Gucci store, and brands like Tiffany & Co., Bally and Zegna concentrated at the high-end Charter Shopping Center (卓展购物中心).
Roger Vivier Shenyang#
Shop 110 & 210, Forum 66
No.1 Qingnian Avenue
Shenhe District, Shenyang
www.forum66.com
Roger Vivier Beijing#
Shop 121-122, Yintai Centre
No.2 Jianguomenwai Avenue
Chaoyang district, Beijing