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Sandy Li

High-end La Perle development highlights growing affluence of China's residents

Guangzhou's high-end retail market is undergoing a dramatic makeover, with international luxury goods retailers rushing in.

You name it -  Prada, Givenchy, Hermes, Louis Vuitton, Celine,  Fendi and Christian Dior - they are all there under one roof.

The  $100 million, 107,000 square feet   La Perle shopping centre   is due to  open on September 19  with a 90 per cent occupancy rate.

At  4,000 sq ft, the Prada shop will be the label's  largest store in the mainland. Givenchy's new concept store will be its second in the world after Tokyo.

The mainland's booming economy is pulling the high-profile firms to Guangzhou.

Prada's retail manager for Hong Kong and China, Tammy Kan, is candid about her company's reason for opening a store in Guangzhou, their fourth on the mainland.

'Sales in our  Beijing, Shanghai and Dalian stores have achieved 50 per cent growth so far this year,' Ms Kan  said. 'The mainland's appetite for luxury goods is strong, with individual shoppers spending  thousands of dollars each visit.'

'We entered the mainland  three years ago because it offered immense opportunities.'

And, in keeping with the opportunities, she said Prada planned to open stores in Chengdu, Qingdao and Hangzhou.

Fendi Asia-Pacific general manager Pierre Balsan said Guangzhou had made  tremendous progress in  the past 10 years and was fast becoming an international city.

'Its easy accessibility is making it an important shopping destination,' said Mr Balsan, adding that Fendi was actively pursuing expansion on the mainland.

The La Perle development  falls within  the municipal authority's desire to   developing Guangzhou into an international metropolis.

A survey by developer Guangzhou Jun Yi Properties Development found  that about 40 per cent had spent between 10,000 yuan (HK$9,373) and 20,000 yuan on luxury items, he said.

'The retail market is undergoing change,'  said Lau Kwan, chairman of Guangzhou Jun Yi.

According to company market research, improving living standards in Guangzhou were boosting  consumer affluence, he said.

'This trend creates  large-scale demand for leading brands. So we believe there is great potential to develop a high-end retail market in Guangzhou,'  Mr Lau said.

Mr Lau's view is also shared by  Swire Properties.

Last year, Swire said  it would spend  $2.2 billion on a 55 per cent stake in the Taikoo Hui Guangzhou Cultural Plaza with partner Guangzhou Daily Group. This $4 billion Tianhe district project   is due to open in 2005.

Bertrand Michaud, Asia-Pacific managing director of Hermes Greater China, said the rush  to invest in Guangzhou did not mean neighbouring Hong Kong would lose its competitiveness.

'Opening a store in Guangzhou is  just like opening one on a suitable site in London or Paris,' Mr Michaud  said.

Given the importance of the mainland market, he said Hermes would base a managing director in Shanghai from next year.

Mr Michaud said that compared with other cities in the world, Hong Kong's geographic location was still its greatest advantage.

He said Hermes last year paid  $190 million - or  $14,615 per square foot - for a 13,000 sq ft retail space at Galleria, 9 Queen's Road in Central.

'The purchase [of the space] shows our long-term commitment to Hong Kong's retail market,' Mr Michaud said.



Luxury retailers tap into Guangzhou's shopping appetite