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Jun
2015

City Report Wuhan

Wuhan is the capital city of Hubei Province. It is also the largest city in central China, an important base for industry, science and education, and key transportation hub. Located in the middle and lower reaches of Changjiang River, Wuhan is divided by the Han River into three towns, which are Wuchang, Hankou and Hanyang.

During the end of the Qing Dynasty, and the early stages of the new People’s Republic, Wuhan was one of the largest cities in China, and even in Asia due to its economic prosperity. Benefiting from a good geographic location, the city has well established railway infrastructure and industry, similar to Chicago in North America, hence is known as “Oriental Chicago”. However, since the reform policies of the 1980s, Wuhan struggled to keep pace with the cities in Yangze River Delta, Pearl River Delta and Circum-Bohai-Sea.

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Economy

As the largest industrial and commercial city in Central, and even inland China, it is known for metallurgy, textiles, shipbuilding, manufacturing, electronic information systems, medicine, food, chemicals and automobiles. The city is home to some of China’s largest industrial players such as Wuhan Iron and Steel Corp, and Dongfeng Motor Corporation, that make the city stand out from others in central China.

According to the National Statistic Bureau, Wuhan achieved a GDP of 800.382 Billion RMB in 2012, ranking it 9th in country, with GDP per capita of over US$10,000. The value of its gross industrial output is 3rd, after Shanghai and Chongqing.

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Luxury retail distribution

According to an insider in the property industry, there will be 10 high-end commercial projects completed in the commercial zones in Wuhan in the next three years. Those under construction now include Plaza 66, and its neighbour developed by Capitaland, as well as The Mixc developed by China Resources Holding. Wanda Plaza located in Wuchang town will also be attractive to luxury brands.

Wushang Mall City is the only high-end commercial hub in Wuhan developed by Wushang Group, which located on Jiefang Avenue, consisting of Wuhan International Plaza, Wuhan Plaza and World Trade Plaza. Wuhan International Plaza is currently the major luxury mall in Wuhan.

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Wuhan International Plaza

Located in the prime location of Jiefang Avenue, Wuhan International Plaza was opened in 2007, representing the new internationalisation process. In 2011, the second phase of Wuhan International Plaza came into use, covering 320,000 sqm in total. Positioned as the home to high-end international brands, it hosts over 100 luxury brands including Bottega Veneta, Cartier, Hugo Boss, Gucci, Burberry, Tod’s, Dior, Louis Vuitton, Hermes, Yves Saint Laurent, Salvatore Ferragamo, Versace, Givenchy, Giorgio Armani, Balenciaga, Paul&Shark, Dolce&Gabbana, Canali, Bally, Coach, Dunhill, Ermenegildo Zegna, Tiffany, Bvlgari, David Mayer Naman, and Chaumet.

Wuhan Plaza

Adjacent to Wuhan International Plaza, Wuhan Plaza specialises in high-end and luxury cosmetic brands, and is becoming known as the largest and top cosmetic retail space.

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Consumer attitudes

As can be seen in our 2013 H1 Brand Reach Review, Wuhan moved up two places in the luxury density ranking to 13th and has been progressively growing in importance year on year. According to Wuhan International Plaza, luxury sales in 2012 reached 4 Billion RMB and predicted to be 6 Billion RMB in 2013.

According to the luxury brands in Wuhan, the mainstream luxury consumers include businessmen, private business owners, high-end technicians etc. who are local residents and people from surrounding cities. Their consumption behaviour is different from those in other cities in that they are low-key, emphasise on brand awareness, and need professional service. Most usually go shopping after 2 pm or 7 pm. Some brands even claim that more and more individuals earning only three to four thousands RMB per month are buying luxury now. You can see people carrying Burberry and LV on the bus, or someone wearing TOD’S on their bike.

Editors view

Although many luxury brands started to reduce their expansion last year, it appears that the Wuhan luxury market has not been badly affected. The second LV store in Wuhan opened recently reflecting an increase in the number of first and second tier luxury brands that are enhancing their presence or entering the Wuhan market now; an acknowledgment of the purchasing power of the local market, which in return, will improve and enhance the format of the luxury market in Wuhan.

The expansion of luxury brands in Wuhan has helped the knowledge of local luxury consumers. Xiao Zhouyun, the GM of Wuhan International Plaza, consider that those luxury brands already in the city are very confident that they can achieve good sales. It has only taken Cartier and Hugo Boss one year for their stores to top of the national sales list. Currently, luxury brands are achieving 40% sales growth in Wuhan International Plaza annually. More luxury brands such as Prada and Fendi are expected to enter the city in 2014.


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