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Jun
2015

City Report Xiamen

Xiamen is a prefecture-level city in Fujian province, with provincial economic management authority and a local legislative. It is one of the four special economic zones of China’s earliest opening-up policy, and plays an important role in cross-strait financial, and southeast international shipping trade with Taiwan. It is also a modern international tourist port city with a 5A level scenic spot; Gulangyu which Former US President Nixon praised as the” Oriental Hawaii. “The city has an annual average temperature of 21 degrees centigrade being a temperate subtropical climate,with moderate rainfall, and neither summer heat nor winter cold.

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Economy

In 2013, Xiamen’s GDP reached 301.816 Billion RMB, an increase of 9.4% compared to the previous year. Industrial output also increased to 121.217 Billion RMB, up 11.9% over the previous period. Its primary industries grew by 2.599 Billion RMB, an increase of 0.2%; the secondary industries 11.1% to 143.479 Billion RMB and tertiary industries increased 155.738 Billion RMB, up 7.7%. At the end of 2013 the city had 1,664 industrial enterprises and the total industrial output value had reached 467 Billion RMB, up 13.1% compared to the previous year. Within Xiamen there are 507 enterprises with an output value of more than 1 Billion RMB, their overall total being 421.449 Billion, accounting for 90.1% of the city’s overall value. The city’s total retail sales of consumer goods reached 97.451 Billion RMB, an increase of 10.5% and per capita disposable income of its urban residents reached 41,360 Yuan, up 10.1 percent on 2012.

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Luxury retail distribution

Zhongshan Road business district home of the Pinault Printemps-Redoute store is the oldest business district in Xiamen.

Huli business district is the birthplace of the Xiamen Special Economic Zone where the Cinda duty-free store located.

Lianhua business district is the most prosperous district in Xiamen. It is the home of the famous Paragon Center Shopping mall housing both international and domestic well-known brands of clothing, accessories, shoes and cosmetics.

City Report-Xiamen

The Pinault Printemps-Redoute Store (Zhongshan store)

The store is located in the most prosperous commercial district in Xiamen, the Zhongshan Road. This mall has seven floors across which can be found: Ports, Morgan, Ermenegildo Zegna, Polo Ralph Lauren, Hugo Boss, Dunhill, S.T. Dupont, Mont Blanc and Omega.

The Cinda duty-free store

The Cinda duty-free store is located in Xinglong Road, Huli District. It is the only large and comprehensive managed duty-free shopping mall within Xiamen Special Economic Zone. International brands in the store include Cartier, Cerruti1881, Lottusse, Dunhill, Omega, Lanvin, D’urban, Aquascutum, Gieves & Hawkes, Trussardi, Kent & Curwen, Mont Blanc, Rolex, Gucci and Tudor.

The Paragon Center Shopping mall

Opened in December 19th 2008, the Shopping mall is the first luxury shopping mall in Fujian Province. Dozens of the world’s top brands can be found here, such as Gucci, Bottega Veneta, Burberry, Emporio Armani, Maxmara, Dunhill, Coach, Rolex, Omega and Hermes Watch.

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Consumer attitudes

The ages of luxury consumer groups in Xiamen are more evenly distributed than other cities, and they also have a relatively rational attitude towards luxury goods when compared to other second or third tier cities. The motivation for purchasing luxury goods in the city has changed from the ‘show off one’s wealth’ to a ‘self-reward’ approach. Nowadays, consumers put more emphasis on self-gratification.

At a luxury exhibition, a female visitor is quoted as saying, “Because all aspects of luxury goods have reached an extreme, such as design and price that not everyone can possess. So it has its own unique value and charm. Buying luxuries appropriately can be considered a kind of sublimation of life. Luxury is not something to show off in some ordinary people’s minds.”

Ms. Wu, a white collar worker said, “I walked into a Gucci store and immediately cannot control the impulse to buy a classic Gucci bag. The whole process only takes 10 minutes. However, I was only excited for a short time after I obtained it. Before making the purchase, I found the bag looks so fancy in the advertisement, but the feeling never came to me when I carried it. I realized that luxuries are not really mysterious, but just stuff with good design and quality, and maybe some heritage. But it can be part of my life.”

A local software engineer said, “I will buy luxury clothes and Dunhill bags to reward myself for working hard. In China, not everyone knows about Dunhill, which means imitations are relatively few compared to LV, and people feel the uniqueness when carrying a Dunhill bag on the street, but those who know the brand still appreciate its charm and status. Luxuries not only suit my personality, but also meet my vanity. Carrying luxuries is a consolation for my hard working and the dull days. ”

Editor’s view

Like Shanghai and Guangzhou, Xiamen was one of China’s first batch of foreign trade ports. However the city has an additional advantage of facing Taiwan across the sea. It links closely to the outside world, via various modes of land, air and sea transportation, extending in all directions. There are Hong Kong, Macau and Taiwan duty-free shops and many high-end brands in Xiamen. Apart from the favourable geographical position, the Government takes a positive attitude toward the high-end consumer market in the city as they treat promoting trade development as a governmental issue. A large number of overseas Chinese, returning overseas students, business executives and white-collar workers provide a huge market demand in Xiamen.

Based on our monitoring of the city, the highest proportion of luxury consumption in Xiamen covers watches and bags, followed by cosmetics, perfume, clothing and jewellery. With the government’s anti-corruption policy, the local watch and men’s luxury clothing market has suffered greatly. As a foreign trade port, luxury consumers in Xiamen have been educated by various brands and are knowledgable.They are not limited to a few of the most famous brands such as LV, Gucci and Prada, the Xiameness will also target some exclusive and diverse brands. They pay more attention to the brand connotation, heritage and craft, and approach consumption in a rational manner.

Overall, the trend of luxury consumption growth is slowing now in China, and Xiamen is following suit. However, due to the stable number of private property owners, rich wives, 2nd generation, white collar workers and overseas Chinese living in Xiamen, the local luxury market remains positive.


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