DDi - February/March 2012 - (Page 136)

136 | Shopping with Paco Eastern promises E veryone marvels at Shanghai. Elaborate skyscraper caps add a cartoon-esque quality to the impressive skyline. My favorite is the “bottle opener” building, but there are crowns, crescents, slopes and antler shapes that have been added to the roofs of buildings in the interest of geometry, or perhaps Feng Shui. Shanghai Pudong International Airport is modern, clean and very efficient. Travel in by business class and your bags come out first, something I have yet to experience at Newark Airport. Passport agents are attractive young women who smile at you. The choices of ground transportation at the airport are clear and well marked. The limo company representative left his counter to direct me to the public bus, a $5 ride into the center of the city. And again, unlike all New York airports, no one is selling shady, slivery car services. While the traffic in most major Asian cities is terrible (and Shanghai is no exception), it is, for the most part, ordered and polite. I’d rather drive in Shanghai than in other Asian cities, such as Seoul or Mumbai. Shanghai’s elevated highways cut through the city, and some have very distinctive lighting; I called the color “dance club blue.” Nanking Road is the former epicenter of China’s shopping culture. At one end is the mighty Yangtze River, at the other, a park. While the city has gone mall mad, this vestige of its urban street culture remains a crowded and autofree pedestrian zone, not unlike the Nicollet Mall in Minneapolis (with 20 times the traffic and better weather). The Nanking Road Apple Store is jammed. In China, the iPhone is a coveted symbol of success. As my shopping-mall industry colleagues pointed out, the problem with successful American brands is that they can’t grow fast enough to meet the increasing demand. You have seen news stories about the fake Apple stores that have turned up in some secondand third-tier Chinese cities. “We have 10 cities that are bigger than the New York Metro area,” my colleague says. “And 60 cities bigger than Pittsburgh.” These same colleagues trace the popularity of one of China’s most popular car brands—Buick—back to the warlord era of 1930s China, where Buicks were the cars of choice for the wealthy and powerful. That brand memory has outlasted the World War and the Cultural Revolution. General Motors both imports and manufactures Buicks in a full spectrum of models, including some that exist out of China under different brand names. The increasing numbers of Chinese consumers that are willing to pay a premium for products manufactured outside of China is telling. Many of the Japanese consumer electronic companies trade heavily on perceived quality of “Japanese made.” Thanks to the Internet, the stories of tainted food, shoddy goods and corrupt construction practices have wide circulation, so China’s “brand equity” has been damaged. In a country with huge national pride, the complications in the local consumer pipeline are growing. Visit the shopping capitals of Asia, from Ginza in Tokyo to the Paragon Mall in Bangkok, and you’ll find large contingents of Chinese visitors that can afford to take shopping vacations. Still, across China, shopping malls are the rage. It is both entertainment and an accelerant to consumer desire. Just as the 19th century department store gave North American customers an appetite and the desire for consumer goods, the Chinese mall has unleashed a mad scrabble for upward social mobility. Each mall has its Starbucks and KFC, and their respective lower-cost knockoffs, to ensure everyone’s price point is satisfied. For those of us that regularly travel to China for business, the year-to-year transformation has been breathtaking. But, even as the building boom continues, this Land of Opportunity has been a frustrating market for the retail services world. In the rush to expand, it mattered less about getting retail right than about simply getting stores up and running. The rush to fulfill this demand was premature. Mall after mall has gone up, and for the first time there is tough competition. The connection between the quality of the shopping experience and the financial success of the property has become much more evident. One of the emerging forces in guiding and shaping this retail revolution is returning the Chinese Diaspora. From Singapore and Thailand to the United States and Canada, expatriate families have come home to build (or add to) their fortunes. As both property developers and experienced merchants, they bring language skills, local connections and faces that blend into the crowd; but most importantly, a global understanding of retail. The interest and appetite for consumer insights and global design services is growing. Supply-chain management sophistication and an active appreciation of modern operating systems are evident. So, perhaps China’s property and economic slowdowns are good for our industry. Go take a look. The air pollution is still terrible, even if the travel is easier than it was 10 years ago—but it’s worth it. Try the Nangua Baozi (soup dumplings), which are tastier than any food-court fare. —Paco Underhill is the founder of Envirosell and author of the books “Why We Buy,” “Call of the Mall” and “What Women Want.” He shares his retail and consumer insights with DDI in a bi-issue column. www.ddionline.com | February/March 2012 http://www.ddionline.com

Table of Contents for the Digital Edition of DDi - February/March 2012

DDi - February/March 2012