Content library

Jun
2015

City Report Harbin

Harbin is the capital and largest city of Heilongjiang province in the northeast region of China, with a total land area of 53,068 km2 (a little larger than Costa Rica). Holding sub-provincial administrative status, Harbin has the eighth largest population among Chinese cities, as well as the most populous city in Northeast China. The city has 9.935 Million inhabitants according to the 2012 census. Harbin serves as a key political, economic, scientific, cultural and communications hub in Northeast China and plays an important part in Sino-Russian trade. Having the most bitterly cold winters among major Chinese cities, Harbin is referred to as the Ice City for its well-known winter tourism and recreation. In the 1920s, the city was considered China’s fashion capital since new designs from Paris and Moscow reached there first before arriving in Shanghai and now it still holds the nickname of ‘Orient Moscow’ or ‘Paris in the orient’. In 2010, Harbin was declared a UNESCO “City of Music”.

cityreport

Economy

In 2012 the annual regional GDP was 455.0 Billion RMB, or 45,810 RMB per capita, with a growth rate of 10.0% compared to 2011. First tier industries increased by 50.68 Billion RMB, second tier by 163.89 Billion RMB, while tertiary industries increased by 240.44 Billion RMB. Industrial added value grew 10% to 67.7 Billion RMB. Equipment manufacturing, the food, automobile,

pharmaceutical, chemical and tourism are the 6 major industries of the city. The total retail sales of consumer goods were 239.5 Billion RMB, an increase of 15.7%. And per capita disposable income of urban residents increased 12.3% reaching 22,499 RMB, against which per capita nonproductive expenditure was 17,615, only increasing by 8.5%.

crhb1

Luxury retail distribution

Harbin has 2 municipal business zones that are large-scale and well developed, and 5 relatively less mature regional ones.

Zhongyang Street business district has a long history and is one of the two municipal business zones in the city. The area gets 500 thousand to one million visitors each day, of which about 50% are local and 50% are from other cities. The Mykal shopping center, home to Hermes, LV and other luxury brands is located in this area.

The Qiulin business zone is a modern and international area and another municipal business area, being a very complete business district fit for all demographics of Harbin people. Luxury retailers in the form of the Songlei Commercial Centre, Qiulin International Shopping Center and New World Department Store are located there. The ara benefits from 300 to 700 thousand visitors every day, 80% of whom are local consumers.

The Aijian business zone is relatively new compared to those previously mentioned with fewer visitors. The newly built high-end shopping mall, Harbin Charter Shopping Center is located there.

CityReport-Harbin(1)

The Mykal Shopping Center

Opened in December 2009, the Mykal Shopping Center is a business-living building, covering 150,000 sqm across 29 floors. The basement 2 to 6 floors are retail mall space and those from 7 to 29 residential. Current luxury tenants are Louis Vuitton, Dior, Hermes, Salvadore Ferragamo, Ermenegildo Zegna, Celine, Armani Collezioni, Versace, Dunhill, Escada and Vertu.

The Harbin Charter Shopping Center

Opened in July 2011, the Harbin Charter Shopping Center is in the new Aijian business zone in the Daoli district, that covers an area of approximately 115, 000 sqm. The building was designed by well known foreign architects with a modern and international appearance. Positioned as the home of international top names, it hosts hundreds of brands such as Chaumet, Coach, Van Cleef & Arpels, MaxMara, Dior, Cartier, Hugo Boss, Louis Vuitton, Gucci, Balenciaga, Bally, Aquascutum, Givenchy, Dunhill, Bvlgari, YSL, A.Testoni, Prada and Ermenegildo Zegna.

crhb2

The Songlei Commercial Center

Songlei Commercial Centre opened its mall in 1993, it has a business area of 38,000 sqm over 12 floors. Brands in the centre include Armani Collezioni, Burberry, Canali, Piaget, Blancpain, Omega and Aquascutum.

The Qiulin International Shopping Center

Located in one of the most prosperous business center in Harbin, Qiulin international shopping center focuses on the latest fashion, and a high-quality experience of international shopping for its customers. The mall itself covers 5, 000 sqm containing a few luxury brands such as Bottega Veneta, Bugatti, Versace and Gucci.

The New World Department Store

Opened in November 1996, the national chain retailer New World Department Store is in the heart of Harbin business area and has a strong reputation with local consumers. The store covers nearly 30,000 sqm and retains luxury brands like Alfred Dunhill, A.Testoni, Bally, Hugo Boss, Burberry, Cartier, Canali, Gucci, Moschino and Vertu.

Consumer attitude

Heilongjiang Province is in northeast China, a remote location meaning the economic situation is far behind that of the eastern coastal cities, as a result consumer attitudes towards luxury goods in Harbin are relatively basic compared to other big cities. The population still seek out well-known brands, large logos on products, and conspicuous consumption is the current trend.

Li Xiao, a 31 year old mother of 2 children owns a number of luxury products from Louis Vuitton, Prada, Burberry, Gucci, Omega and Cartier, that include handbags, shoes, clothing, belts, scarves, hats, watches. She is living in a frontier town that is not yet developed and the best mall in that town can’t meet her needs. To solve the problem, she has turned to the internet or goes into Harbin to purchase luxury goods. According to a local newspaper, 70% of luxury consumers in Harbin are just like Ms. Li who do not live in the city.

In fact, Ms. Li is not a typical ‘2G’, at least she is not that wealthy. With the investment from her parents, she owns a furniture store that brings her 300,000 to 400,000 RMB profit each year. Unlike typical Chinese, She is happy to pay by installments and never saves money. Li has a group of friends who love luxury like her, however being born in 1983, she is an ‘older generation’ in the group, the youngest being born in the 90s and has just graduated. They are typical of inexperienced luxury consumers, and are willing to wear newly purchased luxury goods in order to take photos of themselves and upload them to Weibo or other social media platforms to show off.

Editor’s view

Harbin is isolated culturally from the more advanced cities in China and still lives a few years behind the current times with regards to tier one cities such as Beijing and Shanghai. The lives of the people of the city, and in particular those who live in the provincial cities and towns, is more traditional and their knowledge and experience of luxury items still very immature. Men tend to control the purse strings and male orientated brands have a home here, this is not to say that women don’t spend on luxury, but those brands operating here need to approach their customer base in a manner that they might have done in the east coast three to five years before.

New brands may struggle in Harbin because their names and logo’s are not well recognized, and the skews presented in stores in the city may well need to be quite different from those in Beijing. Being the major city in the province, people will travel to buy luxury items, but brands should not forget that low temperatures and potential issues in terms of travel could open up luxury sales over the internet, and this could be an opportunity for affordable luxury brands wanting to break into the market in particular with younger buyers.


Top