Shanghai's young high rollers splurge on luxury
Monday 26 September 2011
Kelly Ying, one of a swelling group of young high-rollers in Shanghai, has just treated herself to a birthday present of a $45,000-dollar watch.
But the 30-something - who likes "big watches" - has elected not to wear what she calls her "PP" (Patek Philippe) today, opting instead for an imposing, gold-plated Rolex Daytona that she bought for her previous birthday.
Thousands of rich Shanghai residents like Ying have turned China's most cosmopolitan city into the luxury capital of a country that is expected to become the world's largest market for the sector between 2012 and 2015.
According to the World Luxury Association, Shanghai topped China's luxury market in 2010-11 with 18.3 percent of overall sales, ahead of Beijing's 16.2 percent and the eastern city of Hangzhou, with its 13.4 percent share.
Second and third-tier cities in the country - which Forbes magazine says has 146 dollar billionaires, second only to the United States - are still far behind, despite boasting a growing number of wealthy people.
"Shanghai is certainly the city where most (luxury) brands have their headquarters," Angelica Cheung, editor of Vogue magazine in China, told AFP.
"There is a tradition - already in the twenties and thirties, Shanghainese were more into dressing stylishly," she said.
According to Cheung, Shanghai is also a "commercial city", and for a long time, Beijing's real-estate market was not ready for large luxury malls, even if that has now changed.
Shanghai counts 132,000 residents that have more than 10 million yuan ($1.6 million) at their disposal, and as such has a reservoir of customers who can spend a fortune on luxury goods - with French and Italian brands in the lead.
"I'm a fashion victim... and I'm a shopaholic," jokes Ying - the owner of a modern art gallery - standing tall on five-inch heels, sporting an elegant peach-coloured pair of shorts and a silk blouse.
Ying - who also has a 600,000-yuan diamond engagement ring she qualifies as "not very expensive" on her finger - says she has dozens of bags and lots of luxury clothes.
"Every three months, I empty my closet and give out bags, accessories... Fashion changes very fast," she said.
"Shanghai people have a better sense of fashion, luxury customers are more sophisticated, so you need to do a lot more marketing and merchandising."
The French label Hermes last year chose Shanghai to launch Shang Xia - a luxury brand that incorporates a blend of traditional Chinese craftsmanship and contemporary design.
Last week, Patrick Thomas, head of Hermes, said Shang Xia's results were "largely above expectations" even if the brand has yet to make a profit - with 60 to 70 percent of its customers Chinese.
At the city's most luxurious shopping mall - the Plaza 66 - young saleswomen wearing black dresses, their hair done up in buns, and security men with ear pieces and white gloves welcome clients.
On its five floors, the world's most prestigious brands - from Dior to Chanel, Prada to Versace, Armani to Louis Vuitton, Hugo Boss to Bulgari - compete to attract the attention of Shanghai's wealthy.
"We don't feel the impact of the crisis," says the director of the Tod's store, who only identified herself as Judy.
This is confirmed by Nicola Adamo, guest relations manager at the Dolce & Gabbana shop. "What most of them want is brand names. Money is not a problem, and if they like the brand, they can spend 100,000 yuan," he said.
Adamo said one customer once spent $68,000 in one go. "They come for a total look, not just a pair of jeans," he added.
Consultants KPMG said in a recent report that one unique characteristic in China was the high number of young millionaires - "far younger than their Western counterparts," it said.
These consumers passionately follow fashion online, particularly on blogs. Shanghai residents have a reputation of being smarter customers who compare prices more, according to Vogue's Cheung.
They also travel a lot and buy luxury items in Hong Kong, Milan, London or Paris.
Ying, for instance, dished out 5,500 euros ($7,500) in Paris for a watermelon-coloured Birkin bag - made by Hermes and considered a symbol of wealth due to its high price and elusiveness.
"It's very difficult to get in China, and many of my friends would be willing to pay double to get a Birkin," she said.
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