Booming little city is shoppers' paradise
Updated: 2007-09-06 06:31
As 2007 began, a charity cocktail party took place. Representatives from more than 30 of the world's leading luxury brands, including Hennessy, Ballantine's, Porsche, Jaguar, Martini and Costa were in attendance as scores of tycoons participated in an auction, raising almost 1 million yuan for charity.
It might not be surprising if this happened in a large metropolis like Beijing or Shanghai. But this particular event was in Yiwu, a small city in East China's Zhejiang Province.
For a city of only 680,000 people, the prevalence of so many luxury brands made it remarkable.
By the end of April, Yiwu had over 4,000 luxury cars - 2,150 Audis, 1,300 BMWs, 370 Mercedes Benzes and 110 Porsches.
As a result of this high level of luxury car ownership, Mercedes, BMW and Audi have set up "4s stores" to provide sales, service, spare parts and surveys.
Known as "a sea of commodities and a paradise for shoppers", Yiwu is famed as one of the largest consumer retail marketplaces in China. The total area of local markets is now 2.6 million square meters with 58,000 storekeepers, making it a major consumer distribution and sourcing center for the international market.
With so many successful businesspeople, a luxury car has become their first purchase.
Car ownership habits have matured in recent years, says He Yanqing, general manager of Yiwu Car City, the largest automobile market in the city.
He says more than 60 percent of luxury cars are bought with cash, while 35 percent are purchased with loans.
"This shows that most customers are financially competent enough to buy such cars, which are easily 1 million yuan. In the past, customers were unrealistic - their savings could not reach such a high level," he notes.
Middle-class buyers in the city prefer cars costing around 150,000 yuan, to simply get them from A to B, while luxury car owners look for high class when meeting business partners and clients.
By the end of April, Yiwu's car ownership reached 99,566, 85 percent of which are private cars. The figure for last year was 80,660.
The city has 47 auto dealers, including 10 car boutiques selling 14,000 vehicles a year, with a total annual revenue of over 1.5 billion yuan.
Shopping mall
Another example is Yiwu Tianyuan Center, the city's top residential and commercial complex. Even as the 20,000-square-meter shopping mall is under construction, its developer is already in contact with global brands such Armani.
Yang Fujia, sales manager of Tianyuan Real Estate Development Co Ltd, says the shopping center, scheduled to open at the end of next year, will mean that local consumers no longer have to go to Shanghai or Hangzhou to satisfy their luxury desires.
There are 109 apartments in the complex, ranging in size from 150 to 200 square meters. Each apartment sells for about 4 million yuan, which is more expensive than many high-end residences in Beijing and Shanghai. Yet Yang is confident, saying sales will start very soon, and that selling them all is certainly not a problem.
"Very few local people spend money on luxuries to flaunt their wealth. They pay because they need it for further business development," says an anonymous city official.
"Most of the affluent people have just rolled down their trouser legs - transforming from farmers to entrepreneurs," the official explains.
His statement is reinforced by the tradition that many entrepreneurs take their families to nearby villages to eat country-style cuisine instead of shelling out on expensive meals. Coffee shops are popular in the city because local entrepreneurs prefer to meet their business clients there.
The consumption power is there, so promoting a quality life and the purchase of luxury goods are essential factors in Yiwu, says Zhu Jianfeng, general manager of Tianyuan Real Estate Development Co Ltd, also the organizer of the charity reception held this year.
(China Daily 09/06/2007 page52)
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