The world seems to be under the impression that China is a country soon to be overflowing with big spenders. In fact, it is in the Chinese tradition to save, not spend money. Unlike developed nations in the West, China has no experience with a Social Security system or a retirement safety net. So it has always made good common sense to save as much money as you possibly can. The new, wealthier China promises to change all that, but ditching a value system that has held fast for centuries will take a lot of time.
Too many Western businesspeople worship a well-worn set of statistics, that hundreds of thousands of millionaires live in China, and more are being created every week. The potential for making a killing in this market is huge. As a result, you see the phenomenon of one high-end specialty retailer after another setting up shop in Beijing: Gucci, Armani, Prada, Chanel, and more. But I can tell you that on any given day, from the moment each store opens until it closes, it is devoid of customers. Empty. The managers and workers stand around, creating and updating window displays, hoping for that day when one of those Chinese millionaires or family members shows up and drops hundreds of thousands of RMB on purchases. Then, they'll wait for another 7 months before the same millionaire -- or, good heavens, another one! -- will arrive and buy something else.
The high-priced, highly-sought-after stuff has led to a lucrative counterfeit business in China. Fake items ranging from handbags to footwear are extremely popular. A history of social division between elitists and peasants has created a middle class obsessed with status, and it will buy a fake Rolex or Gucci item in a heartbeat.
It might take 40 more years of wealth accumulation before average Chinese citizens can even think about walking into a high-end retail store to make a purchase. But once they start, who knows what will be left for the rest of us?
Too many Western businesspeople worship a well-worn set of statistics, that hundreds of thousands of millionaires live in China, and more are being created every week. The potential for making a killing in this market is huge. As a result, you see the phenomenon of one high-end specialty retailer after another setting up shop in Beijing: Gucci, Armani, Prada, Chanel, and more. But I can tell you that on any given day, from the moment each store opens until it closes, it is devoid of customers. Empty. The managers and workers stand around, creating and updating window displays, hoping for that day when one of those Chinese millionaires or family members shows up and drops hundreds of thousands of RMB on purchases. Then, they'll wait for another 7 months before the same millionaire -- or, good heavens, another one! -- will arrive and buy something else.
The high-priced, highly-sought-after stuff has led to a lucrative counterfeit business in China. Fake items ranging from handbags to footwear are extremely popular. A history of social division between elitists and peasants has created a middle class obsessed with status, and it will buy a fake Rolex or Gucci item in a heartbeat.
It might take 40 more years of wealth accumulation before average Chinese citizens can even think about walking into a high-end retail store to make a purchase. But once they start, who knows what will be left for the rest of us?
A fresh, contrarian viewpoint.
ReplyDeleteLove it.