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Jun
2015

City Report Fuzhou

Fuzhou, the capital of Fujian Province is the centre of political, economic, cultural, science and technology and modern financial services in the West Coast Economic Zone. It is also one of the coastal port cities that opened to the outside world and a famous Chinese historical and cultural city, it was also ranked as one of the top 100 best commercial cities in Mainland China by Forbes in 2013. Fuzhou has a long history and has been a crucial trade port and the one of the gateways of the Maritime Silk Route since the Tang Dynasty.

Because it is in a subtropical monsoon climatic region, the city has a moderate climate, with the temperature of 6 ~ 10C in the winter and maximum temperature of 33 ~ 37C in summer. Unfortunately, typhoons land directly on the city on average, twice a year.

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Economy

The GDP of Fuzhou in 2013 was 467.9 Billion RMB, an increase of 11.5% compared to 2012. Industrial added value increased to 165.45 Billion RMB, or 13.2% for the same period.

Among them, the Textile Processing increased by 18.6%, the Leather, Fur & Feather Processing and Shoe Manufacturing Industries increased by 13.6%, the Electricity & Heat Supply Industry increased 7.6%,the Black metal Manufacture increased by 17.0%,Non-metallic Mineral Products by 23.3%,the Primary Products Processing Industry increased by 9.6%,Mechanical industries by 19.2% and the Chemical Fiber Manufacture Industry increased by 26.4%. The total retail sales of consumer goods was 268.17 Billion RMB, up 15.6 %, and per capita disposable income of urban residents increased 9.8% to 32,265 RMB.

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Luxury retail distribution

The Dongjiekou business circle is one of the earliest and the most mature shopping districts in Fuzhou. Many large shopping malls selling both international and domestic well-known brands of clothing, accessories, shoes and cosmetics are located here, these include the Oriental Department Store and Grand Ocean Department Store. Taijiang business circle is the commodity wholesale center in Fuzhou and mainly focuses on the middle and low-end consumption market. However the opening of the Oriental department store (Qunsheng Store) suddenly attracted a group of high-end consumers to shop there. Established around Wuyi Square and the Super Brand Mall, Wuyi business circle has a large flow of people, The Grand Ocean Department Store (Jingdian Store) being the main high-end shopping mall in the circle.

City Report-Fuzhou

The Grand Ocean Department Store (Jingdian Store)

Opening in December 2007, the Jingdian store has a total business area of over 38,000 sqm. This store is the most prestigious and the largest mall in Fuzhou. Consumers can find most of the well-known international brands in the store, including Bally, Canali, Coach, Emporio Armani, Ermenegildo Zegna, LV, Girard Perregaux, Hugo Boss, IWC, Max Mara, Montblanc, Tod’s, Piaget, Salvatore Ferragamo, Ulysse Nardin, Jaeger-Lecoultre, Panerai, Omega, Escada, Dunhill And Vertu.

The Oriental Department Store (Qunsheng Store)

This store (Qunsheng Store) opened in December 2008 delivering a total business area of over 30,000 sqm. It was voted the most influential fashion landmark in Fujian province in 2011. International brands to be found in the store are Gucci, Burberry, Omega, Canali and Vertu.

The Grand Ocean Department Store (East Road Store)

This was the country’s first Grand Ocean Department Store opening in September 2002 covering a business area of nearly 32,000 sqm. Many well-known brands can be found in the store, such as Chanel, Dior, Givenchy, Gucci, Armani, Burberry and Bvlgari.

The Oriental Department Store (East Road Store)

Opening in October 2004, the Oriental Department Store (East Road Store) was the first high-end boutique department store in Fuzhou covering a business area of nearly 20,000 sqm across eight floors. Within the store can be found both international and domestic well-known brands, including Hugo Boss, Armani Collezioni, Armani, Zegna, Versace Collection, Versace, Rolex and Omega.

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Consumer attitudes

In addition to wealthy businessmen, senior white-collar workers also contribute much to the market growth; their average monthly salary is typically over 10,000 RMB. Notably, the main purchasing power for luxury goods in the city comes from surrounding counties, and the main consumers are 30-50years old.

“The comfort and confidence you get when wearing a set of clothing costing 8,000 RMB is 10 times more than that wearing 800 RMB clothing. Others can judge your wealth and status from your dress style and clothing.” Miss Jiang, a SME owner.

“With the decoration of luxury products, white-collar workers are seen as more elegant and confident. Luxury goods somehow change our judgment of others.” Miss Lee, a staff member of a foreign trade company.

A Gucci salesperson observed that, “a 7000-10,000 RMB Gucci bag sells better in Fuzhou. Customers are very clear about what they want. It may only take 10 minutes for a consumer from the time they come into the store, select a product, pay the bill and go away again. ”

Editor’s view

Fuzhou was ranked 30th for GDP in China in 2013.According to the 2013 Hurun Report, the city has over 9,200 millionaires with assets over 10 million RMB and 630 people with over 100 million RMB.

The most obvious feature in the Fuzhou luxury market is the strong consumption ability of the surrounding eight counties. The perception is that over 50% of the luxury consumption in Fuzhou’s high-end market is a result of spending by citizens from these eight counties. Nowadays, many of the world’s top luxury brands such as LV, Gucci and Cartier are optimistic about Fuzhou high-end market and have established themselves in the city. These international brands didn’t require any pre promotion before opening as the Fuzhounese are quite familiar with these names.

It is also worth noting that just like the whole luxury market in other parts of the world, the market in Fuzhou is slowing down. For example, based on the 2012 annual report of the Oriental Department Store Group, Gucci ranked third in sales list in Fuzhou with a total of revenue 42.93 million RMB, a 5.8% decrease compared to 2011 and although the figures are not available, we understand that sales in 2013 decreased further.

Overall, the huge number of SME owners in Fuzhou will always be an important group with strong purchasing power for luxury brands. They are not as influenced by official policy and practice as those in the North of China. The luxury market may therefore recover more quickly and with its geographical advantage lying to the west of the Taiwan Straits, yachts may be a new growing sector for the city.


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