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City Report Taiyuan

Taiyuan, the capital of Shanxi Province, and the ancient capital of nine dynasties is one of China’s 22 mega-cities, and is located at the junction of three Chinese economic zones, connecting the north and south, having a total area of 6,988 square kilometers and hosting a total population of 4,256,300 people (2012). With over 2,500 years of history it is now Shanxi’s political, economic and cultural center. It is also claimed to be a famous military and cultural center in north China, and the home of the Jin-Merchant. The city has made a very large contribution to the development of the country in the energy and heavy industry sectors.



In 2013 the annual regional GDP of Taiyuan was 241.3 Billion RMB, or 56,689 RMB per capita with a growth rate of 8.1%. Above-scale industrial added value grew 10.1% to 77.1 Billion RMB. Energy, metallurgy, machinery, pharmaceutical and chemical industries are the 5 major sectors of the city. The total retail sales of consumer goods were 128.1 Billion RMB, a y-o-y increase of 13.5%. Per capita disposable income of urban residents also reached 24,001 RMB an increase of 11%.


Luxury retail distribution

In recent years the retail industry has developed very rapidly in Taiyuan, and new department store openings have been almost constant. From a geographical perspective, the Taiyuan department store business can broadly be classified by four main business zones. Liuxiang and Changfeng business zones being the most prosperous of this group.

Liuxiang is the oldest, most prosperous commercial street in the city, and is regarded as the ‘Wangfujing’ commercial pedestrian street in Taiyuan having been in existence for 300 years. The business zone also has one of the four largest night markets in China that attracts over 200,000 people per day. Luxury retailers like the Huayu international boutique store and Tianmei store are located there.

With the creation of the high-tech development zone of Taiyuan and construction of residential areas around it, Changfeng business zone has become another leisure and shopping destination for the local citizens, the Wangfujing department store and Tianmei Plaza can be found here.


The Huayu international boutique store

Opened in November 2003, The Huayu international boutique store is the most focused luxury shopping mall in Shanxi Province. The store adopted an international design style offering 16,000 sqm across 3 floors of fashion brands, in addition to 2 floors of restaurants. Various luxury brands can be found here including Louis Vuitton, Cartier, Ermenegildo Zegna, Salvatore Ferragamo, Paul & Shark, Roger Dubuis, Vacheron Constantin, Hugo Boss, Van Cleef & Arpels and Vertu.

Tianmei department store

As the first high-end department store in the city, Tianmei department store opened in 2002 when luxury was a completely new concept to most locals. The store focus’s on high-end fashion, leisure and health resident brands include Hugo Boss, A.Testoni, Montblanc, Armani, MaxMara, Dunhill, Baume & Mercier, Gieves & Hawkes, Pierre Cardin and Kent & Curwen.

Wangfujing department store

Taiyuan Wangfujing opened in May 2010, and was developed by Beijing Wangfujing Department Store (Group). The store has 69,000 sqm’s of dining, entertaining and fashion retailing across 6 floors. Wangfujing has attracted more than 500 brands, including luxury brands such as Gucci, Bottega Veneta, Lanvin, Burberry, Chaumet, Bvlgari, Bally, Corneliani, Michael Kors, Giuseppe Zanotti, Canali, A.Testoni, Coach and Versace.

Tianmei Plaza

Tianmei Plaza is a new project developed by Tianmei Group that opened in 2012 in the Changfeng business zone. It has claimed to try the hardest to meet all needs of high-end customers with professional services and good after-sales service within the 48,000 sqm of retailing space. International brands include Prada, Dolce & Gabbana, Ermenegildo Zegna, Kiton, Corneliani, Dunhill, Cerruti1881, Canali, Coach, Maxmara, Hugo Boss, Giada, Montblanc, Moneta, Gieves & Hawkes, Rolex, Piaget, IWC, Panerai, Jaeger-Lecoultre, Glashutte Original, Elegant Gallery, Tag Heuer, Omega and Balncpain.


Consumer attitude

Located in central China, the overall development of Taiyuan is far behind that of eastern coastal cities, but luxury brands did not ignore the potential consumption power available. Shanxi is rich in mineral resources, and coal mine owners who live in Taiyuan, are perhaps one of the richest groups of people in China. They buy yachts, private jets, mansions, and one even purchased 30 Hummers for his daughter’s wedding.

The middle class is still a major consumer group in the local market. According to the first luxury consumer survey run by a local magazine in Taiyuan in 2012, ‘The Taiyuan luxury consumer report’ consumers can be divided into six categories:


In Taiyuan, most of the consumers regard owning luxury products as a symbol of wealth, to show their economic strength and status. However, they don’t have high brand loyalty and are willing to try a variety of brands and styles. They have begun to form personal preferences for luxury but they are unstable. In terms of category preferences for male and female consumers: women will pay greater attention to leather goods and clothing while local men are focused on watches.

On average and based on different income levels, local female luxury consumers will spend 30 to 300 thousand RMB on leather per year.

As a generalization, the difference between male luxury consumers’ expenditure usually depends on whether they buy watches or not. Male consumers who love watches are likely to spend 100,000 to 300,000 RMB more than those who don’t. Overall, male consumers consider that clothing, accessories, and bags are just for work, and are disinterested in them.

Editor’s view

Unlike Shanghai and Beijing, almost all the luxury consumers in Taiyuan are local. Although the market has grown significantly in the past 3 or 4 years, due to a lack of brands and products, and poor shopping environments, the majority of the local consumers prefer to make their purchases in other locations such as Beijing, Shanghai, Hong Kong or internationally. These consumers are not short in terms of purchasing power, but the local market can not meet their current needs.

Female consumers are glad to see an increase in international brands in Taiyuan, and a more frequent update of new products. However, in the eyes of local consumers and when compared to Beijing and Shanghai, the market in Taiyuan is lagging. In fact, many luxury brands only offer cosmetic and accessory product lines in Taiyuan, rather than their entire product range.

Over 50% of the male consumers are satisfied with the market as male clothing brands are able to meet their needs. However, young consumers are expecting more fashion brands such as D&G to enter the city.
There is strong consumer demand in Taiyuan that the market currently cannot meet, for which there are three core reasons.

1. A relatively limited number of resident luxury brands (especially clothing brands). Many popular brands have yet to enter Taiyuan.

2. Both store managers and consumers claim that the new collections will be sold out rapidly immediately after the launch, and many consumers complain about the frequency of new product introductions.

3. Compared to the prices in Hong Kong, the same product in Taiyuan is typically 30% more expensive (over 40-50% during the Hong Kong discount season), which is the most significant reason that prevents local consumers from buying watches and jewellery at home.

Other causes not mentioned above include the shopping environment and service attitude.


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