Mao suits out of fashion in this stylish market's boom

PUBLISHED : Thursday, 14 December, 1995, 12:00am
UPDATED : Thursday, 14 December, 1995, 12:00am

THIS city of smog and soot built its reputation on heavy industry. Now it hopes to carve a modern image out of consumerism.

Tall, young ladies in short skirts and colourful fur coats host impromptu fashion shows outside local department stores in carefree rebellion against the zero-degree weather.

Well dressed men and women in leather jackets stroll the commercial districts of Taiyuan and Zhong Jie, buying sticks of sugar-coated hawthorn berries for their children and inspecting the latest shipments of clothes and appliances.

Shenyang has emerged as one of the largest consumer markets in northeast China, and foreign retailers are beginning to take note.

Hong Kong-based companies including Giordano, Goldlion and Crocodile, as well as foreign labels Pierre Cardin and Playboy, have opened outlets.

'For foreign companies which have already established operations in Beijing and Shanghai, there is no problem expanding to Shenyang. They already have a critical mass. It is just a matter of pumping capital in,' says Laurence Brahm, director of Naga Group consultancy.

Lippo Group of Hong Kong has completed the main construction of its 1.076 million square feet Taiyang Plaza in a central commercial district. The Kerry Group and New World Development have also begun work on commercial plazas, office towers and hotels.

The giant C.P. Pokphand Group of Thailand, through a 50-50 joint venture with Wal-Mart of the United States, has invested 120 million yuan in a large discount store.

Kentucky Fried Chicken has opened two outlets, and fast-food restaurants are growing in popularity.

Although the average salary was only 4,402 yuan (about HK$4,114) last year - about 3,000 yuan less than in Shanghai and Guangzhou - consumer spending almost doubled between 1991 and 1994.

With an official population of 6.7 million and a floating population of one million more, Shenyang also ranks as one of China's top 10 biggest cities.

But the provincial capital's real market potential lies in its hinterland. The city is located at the centre of a 150-kilometre arc which includes 25 million people in seven other Liaoning cities - Anshan, Fushun, Liaoyang, Dandong, Yingkou, Tieling and Benxi - most of which are connected by modern highways.

Retail sales in Shenyang reached 22.33 billion yuan last year, a 30.5 per cent increase over 1993 and about double the amount in 1991.

Shenyang's own Zhongxing department store ranked third in the nation in retail sales last year, while Shenyang Commercial City was in the top six.

Despite all the conspicuous consumption, however, it is Shenyang's wholesalers who drive the sales figures higher and higher.

The wholesale sector accounted for 74 per cent of all consumer sales last year.

The main venue is the massive Wu Ai Bazaar in central Shenyang.

Under row after row of dirty tube-like tenting, tens of thousands of hawkers tend 21,000 counters selling clothes and household goods to suppliers from Liaoning, Jilin, Inner Mongolia, Heilongjiang provinces and Russia, and to the city's own shoppers.

Last year's turnover reached 6.14 billion yuan - 38 per cent of Shenyang's total retail sales and a 90 per cent increase over the previous year's turnover.

Zhang Deyin, general manager of the western section of the Wu Ai Bazaar, said he expected sales would climb to eight billion yuan this year. The market handles an average 250,000 purchase orders a day and as many as 300,000 on Sundays.

Pirated compact discs imported from southern China and fake brand-name goods are a common sight in Wu Ai.

Prices are about half what they are in regular department stores in the city, but locals say that the quality is only half as good too.

'If you want to wear it for a few months, buy it in Wu Ai. If you plan to keep it for a few years, then get it elsewhere,' a taxi driver said.

Dealers in the market often claim they sell their goods so cheaply that they are losing money, but brisk sales and 10-hour days beginning at 5 am every morning belie their pleas for pity and purchases.

In an effort to standardise Shenyang's sprawling consumer market, officials have been promoting the creation of chain stores.

The Commercial Administration's subsidiary, Wujin Group, has already set up more than 30 chain stores and is looking for foreign partners to help build more.

Shenyang may be a key city in China's rust belt, but it is no place to be caught in a Mao suit.