Content library

Jun
2015

City Report Jinan

Located in Eastern China, Jinan, the capital of Shandong province, has played an important role in the history of the region from the earliest beginnings of civilization and has evolved into a major national administrative, economic, and transportation hub. Jinan is the command center for the Jinan Military Region, one of seven military regions into which the People’s Liberation Army is organized and is considered as a strategic reserve of PLA.

The city covers a total area of 8,177.21 square kilometers, hosting a total population of 699,900 people (2012). With many artesian springs in the urban city centre and its surroundings, Jinan is referred to as the Spring City as a tourism destination.

cityreport

Economy

The annual regional GDP of Jinan increased 9.6% in 2013 compared to that in 2012, reaching 523 Billion RMB or 75,254 RMB per capita and the annual per capita disposable income of urban residents was 35,648 RMB, an increase of 9.5%. The total retail sales of social consumer goods reached 263.39 Billion RMB, an increase of 13.4% and per capita consumption expenditure of urban residents was 21,667 RMB, an increase of 8.2%. Electronic information, transportation equipment, machinery and equipment, energy and new materials, pharmaceutical and food industries are the major sectors of the city and industrial added value grew 11.4% to 515 Billion RMB.

crjn1

Luxury retail distribution

There are considered to be several Jinan business zones, the general consensus is that there are five main business districts in Jinan each with their own different characteristics. But it is acknowledged that the Quancheng Road – Quancheng Plaza (QC) business zone is dominant and that no other district can compete.

QC business zone is a traditional central business district with a long history of shopping, leisure, tourism, culture and other functions. It is estimated that over 50% of the large shopping malls, five-star hotels and supermarkets in Jinan are located in the zone, including the three high-end shopping malls Inzone Store, Guihe Shopping Center and Parc66.

CityReport-Jinan

Inzone Store

After years of development, Inzone Group now has over 100 department stores across the country and is ranked top 10 in the national retailing industry. Opened in 1996, the Inzone Store is the earliest high-end department store to be built in Jinan. After several refurbishments it became one of the landmarks of the Jinan luxury market. Brands in the store include Gucci, Hugo Boss, Cartier, Prada, Bottega Veneta, Burberry, Ermenegildo Zegna, Tod’s, Canali, Armani Collezioni, Givenchy, Coach, Montblanc.

济南贵和3

Guihe Shopping Center

The Guihe Shopping Center opened in October 1997.Due to the location and a comfortable and elegant shopping environment the store has a very good reputation among Jinan’s wealthy consumers.
After refurbishment in September 2013 and linked to a new building, the shopping center now covers an area of 55,000 square meters for plenty of international brands including Louis Vuitton, Ermenegildo Zegna, ARMANI, Burberry, Bally, Jaeger Le-Coultre, Dunhill, Dolce&Gabbana, Salvatore Ferragamo, Hugo Boss, Armani Collezioni and Montblanc.

济南恒隆2

Parc66

Located in the core area of the city, with a construction area of over 250,000 square meters, Parc66 had its grand opening in August 2011. The mall combined with a boutique supermarket, luxury brand stores, catering and other different functions, offers nearly 400 brands including Coach, Hermes Watch, Givenchy, Aquascutum, Hugo Boss, DKNY, David Mayer Naman, Iwc, Omega, Escada, Hugo Boss, Canali, Furla and Lancel.

Consumer attitude

Although Jinan is not on the TOP 10 GDP city list, luxury consumption has gained the consumer’s approval, and is part of their daily lives. Qilu Evening News surveyed 1,208 randomly selected citizens in Jinan in terms of their luxury consumption attitude. The data showed that 90.4% of respondents were planning to buy or have bought luxury goods at that time.

In recent years with the development of the city, more luxury brands have come to Jinan and released the purchasing power of local consumers, as well as those in the surrounding cities. A manager in the Guihe Shopping Center said that consumers from surrounding cities would take a shopping tour of Jinan and buy high-end products. He also thought that half of the sales made in Guihe are from non-resident consumers. The parking lot at Parc66’s has proven invaluable, as over 30% of the cars parking there at weekends are not local, the percentage increases during vacation times such as the National Day period.

Like many other cities, many young, middle-class fashion consumers like to buy luxury goods abroad.
‘Products in Hong Kong are much cheaper and there are far more collections than in Jinan.’ Ms Song, a university music teacher said. She and her colleagues are loyal fans of luxury brands, they are likely to buy one luxury product each month, but mostly from Hong Kong or overseas.

A financial officer of a state owned company, Ms Li has Chanel, BV, and Gucci handbags and other luxury goods, but not one was purchased in Jinan. ‘I don’t care about the new collections, the classic products are my favorite. My company will organise staff to travel abroad every year, and buying abroad can save a lot of money.’

Editor’s view

Due to the rapid development of the port city of Qingdao, Jinan was not the first choice location for most luxury brands. But in recent years, luxury brands have saturated the first-tier and developed second-tier cities, so Jinan is a relatively new market that has been added to the plan.

Based on our retail monitoring, up until the end of 2013, Jinan has 40 outlets for luxury cars, fashion, watches and jewellery, 9 less than Qingdao, not a significant difference in numbers, but in actuality, Jinan is far behind in the luxury car and jewellery sectors.

In the initial development stage, men’s watches and accessories were the first sectors for luxury brands entering Jinan. In recent years, the proportion of luxury cosmetics, female clothing and accessories has increased tremendously and given woman greater choice.

Jinan is a second-tier city in its consumption levels. Consumers are used to spending conservatively and particularly lower in conspicuous consumption. Many wealthy people are very low key, thus, although luxury stores in shopping malls appear empty much of the time, the sales turnover is significant. Following are some insights from store staff.

Prada: Since the store opened, the sales value has exceeded 1Million RMB every month, sometimes reaching 3 million.

Gucci: At least one handbag is sold every day. During holidays, non-resident Chinese customers specifically come to Jinan for luxury goods.

Coach: When the business is poor, we may sell three to five bags a day. If we are lucky, we sell dozens!

Burberry: The store will sell at least three bags a day.


Top