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City Report Xi’an

Located in west China and as the capital city of Shaanxi province, Xi’an is one of the Four Great Ancient Capitals of the world, with more than 3,100 years of history. The greatest of the four Great Ancient Capitals of China, Xi’an served as capital city of during several of the most important dynasties in Chinese history, including Zhou, Qin, Han, Sui, and Tang. Xi’an is the eastern terminus of the Silk Road and home to the Terracotta Army of Emperor Qin Shi Huang. Since the 1990s, as part of the economic revival of the Chinese interior especially for the Central and Northwest regions, the city has re-emerged as an important cultural, industrial and educational centre of the central-northwest region, with facilities for research and development, national security and the state aviation high-tech industry program. 


Benefiting from the geography and natural resources, Shaanxi is abundant in coal and oil that are concentrated in North and South of the province, which have generated a large amount of wealth for the local citizens. In 2012, the industrial output of Xi’an was 436.9 Billion RMB, placing it 29th in the GDP ranking of cities in China, and the first in the Northwest of the country. The total retail sales of consumer goods in 2012 were 223.6 Billion RMB, a 15.5% year on year growth, and per capita disposable income of Xi’an citizens was 29,982 RMB, having increased 15.4% when compared to that of 2011. As one of the mainstay industries, tourism represented 15% of the GDP of Xi’an in 2012, up to 65.4 Billion RMB, and an increase of 15.5%.


Government policy

In November 2006, Xi’an and the China Aerospace Science and Technology Co. jointly set up the Xi’an Aerospace Science and Technology Industrial Base.It is the only state-level high-tech industry base providing aviation research and development, training, aviation equipment production, complete aircraft manufacturing, spare part processing, and aviation service.

After benefiting from the development of the aerospace industry, Shaanxi and Xi’an set their sights on another heavy industry, automobiles. The government announced last month that they planned to make it one of the province’s mainstay industries.


Luxury retail distribution

Having developed over a millennium, Xi’an Zhonglou commercial district has became the centre of the highest standard, largest scale and most popular retailing in the West China. Containing all types of commercial industries including,
department stores, restaurants and entertainment, such as Century Ginwa, Zhongda International, Parkson, Intimes, Wal-mart and others. Zhonglou commercial district is an inseparable part of local people’s lives.

Century Ginwa department store

Located between Zhonglou and Gulou, Century Ginwa department store covers an area of nearly 31,000 sqm over two floors. Aimed at high-level consumer groups after opened in 1998, andcontainsvarious luxury brands such as S.T.Dupont, Gieves&Hawkes, Ermenegildo Zegna, Kent&Curwen, Armani, Hugo Boss, Dunhill, Escada, Versace, Cerruti1881, Bally, Montblanc, Rolex, Cartier, Vertu, Coach.

Zhongda International Department Store

Also opened in 1998, Zhongda International department store operates boutique business of the world’s top brands over a floor area of 9,095 sqm. Over 80 international brands have established in Zhongda over the past10 years such as Giorgio Armani, Louis Vuitton, Stefano Ricci, Prada, Tod’s, Salvatore Ferragamo, Bvlgari, Roger Vivier, Fendi, Versace, Piaget, Tiffany&Co., Canali’Testoni, Lavin, DAKS, Giuseppe Zanotti, Paul&Shark.


Consumer attitudes

As China’s capital city for 13 dynasties, Xi’an is full of rich cultural of ancient heritage, which influences local citizens in terms of the ways they demonstrate wealth and manner. They pursue products with history, culture, complicated craftmanship and exclusivity, and those that can embody the regal importance and a kingly manner, so there is a strong connection with luxury goods. Therefore, when Zhongda International Department Store brought the first luxury brands to Xi’an in 2004, and advocated the concept that possession of luxury is the symbol of success and social status, this was accepted by local consumers.

The members of high-end department stores represent the mainstream luxury consumers in Xi’an. There are over 10,000 members in Zhongda International Department Store, with ratio of male to female of 1:1. According to the staff in the Printemps membership center among their 10,000+ members, those between 30 to 40 years old are the mainstream. Female members make up over 60% and those of the 80’s generation hold the rising purchasing power. According to the manager of membership center in Century Ginwa Department Store, members contribute over 60% to sales, and those between 35 to 45 years old are the main buyers.

Editor’s view

Based on the internal client information of luxury department stores, the local consumers in Shaanxi province contributed over 70% to the luxury market purchases, whereas, 30% of sales are made by consumers from adjacent provinces. In terms of their demographics, luxury consumers in Xi’an can be classified into the following groups.
First group are mine owners in the North of the province, who buy luxury for the brand name, the price and to show off. The second group are business owners who buy luxury to improve and reinforce their status. These two groups of consumers account for 80% of luxury consumers in Xi’an. The third group are those with grey income sources.

There is a group of middle class individuals with both taste and money who typically buy luxury products overseas. And finally, the normal white collars workers who are passionate about luxury brands and save hard to buy one or two items once a year.

For example, 40 years’ old Mr. Wu bought a 8,000 RMB Rolex watch for his girlfriend. Ms Liu, with a rich boyfriend who is a fan of luxury goods, bought luxury handbags valued over 10,000 RMB every time, “people around will judge if it’s too cheap” she said.

Miss Cao, who is the sales assistant in a luxury store, said “most of the experienced luxury consumers with purchase power are looking for something unique and exclusive, if you tell them that the product is limited collection, they are more willing to buy”.


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