By  on April 26, 2010

SHANGHAI — With barely a week to go before China opens its doors on May 1 for what organizers hope will be the biggest and most visited World Expo ever, the country’s financial and fashion capital is abuzz about the potential retail and brand-building opportunities it may create among millions of prospective customers.

But that’s not to say everyone in Shanghai is engulfed in expo fever.

Since the start of this year, the expo and its Gumby-lookalike mascot, Haibo, have taken over the city’s main streets, with billboards and building-size banners proclaiming the ubiquitous expo slogan “Better City, Better Life.” In what can only be compared to Beijing’s Olympic buildup that started years ahead of the 2008 Summer Games, Shanghai’s city officials and developers have given the city an expensive makeover for the fair, which they estimate will bring in at least 70 million people — the vast majority of them Chinese —to visit the pavilions and exhibits organized by 190 countries and several dozen organizations. Even though the World Expo seems like an outdated concept to many outside China, its organizers believe this country will prove the idea of a global fair to share ideas and innovation still has merit.

“Some people think that because the Internet is so developed and communications are now so convenient, we don’t need to hold the expo,” said Sun Yuanxin, the vice president of an all-expo related economic research program at the Shanghai University of Finance and Economics. “But I don’t think that opinion is entirely correct. No matter how convenient the Internet is, we still need communication face-to-face. It is still very necessary.”

Organizers have thus far been circumspect about discussing the total financial cost of the expo, which, besides actual construction of fair buildings, involved relocating an estimated 17,000 people from the 3-square-mile site, as well as a broad makeover of the entire city that has included construction of new airport terminal and extensions of the city’s subway system. City officials have said the entire project cost $4 billion, but state-run media puts the real cost at more than 10 times that figure. Unlike the Beijing Olympics, which was considered a retailing flop for lack of tourists, companies are eyeing the expo for real potential to increase sales and make inroads into the Chinese market.

“We think this is going to be better for business than the Olympics,” said Andrew Chow, manager of the Shanghai Tang store in the Shangri-La Hotel. “The Olympics had a more political atmosphere and there were limits on the number of visas. There will be more visitors during the expo and it will have a good impact on our business.”

Many international companies and domestic brands looking to build their names and credibility see the expo as a chance to connect on a direct level with millions of increasingly well-off Chinese consumers. The jury is still out on whether the expo will help boost businesses and their attempts to grow, but firms are approaching the fair with optimism.

Zhou Gendi, store manager of a Nike shop in one of Shanghai’s malls, said her company believes the expo will benefit business given the steady stream of potential customers visiting the city and its shopping centers.

“We hope to improve our brand popularity even more via the expo,” said Zhou.

Other multinational firms like Coca-Cola and General Motors are sponsoring big events at the expo engineered to create buzz and generate consumer interest. Louis Vuitton is one of four sponsors of the French Pavilion, designed by architect Jacques Ferrier and which incorporates a contemporary interpretation of the famous gardens at Versailles, among other elements. Visitors to Vuitton’s space within the pavilion will pass through a replica of Paris’ Art Nouveau subway entrance and discover seven masterpieces on loan from the Musée d’Orsay and what’s billed as a state-of-the-art digital projection devoted to the French capital and playing on the brand’s familiar theme of travel.

Elements of Vuitton’s famous monogram are integrated into the fantasy film, along with a trunk and iconic Bucket bag. Vuitton also charts its historic participation in World Exhibitions via a separate display at luxury center Plaza 66. It includes 20 luggage designs on loan from its museum in the Paris suburb of Asnières.

On May 15, two weeks after the expo’s grand opening, Dior will host a major fashion event in Shanghai, screening a short film by David Lynch produced for the occasion and showing designer John Galliano’s cruise collection.

And while the larger events like Dior’s will capture some global attention, retail shops on the Shanghai consumer level are poised to attempt to woo new customers from among the millions of Chinese who are expected to travel to Shanghai from the provinces for the fair. But analysts say the impact is less about actual sales than about making an impression, registering brand names and ideas with consumers.

Lan Feiyan, a retail industry analyst, said it’s not clear-cut whether the expo will be worth the cost, in terms of brand-building and outreach.

“It is not a thing we can judge simply,” said Lan. “Maybe in the short term, the commercial influence won’t be that big, but [the expo] will have positive impacts on the city, the country and brands in the long term.”

In the days leading up to the opening of the expo, some structural flaws have begun to emerge surrounding the six-month-long fair, which has been planned for years by city and event organizers. Shanghai beat out Yeosu, South Korea, and Moscow in the 2002 bidding for the fair, drawing on the theme of sustainability, even though most of the site will be dismantled when the expo ends this fall.

This month has tested the expo’s organizers with some well-publicized flaws and embarrassment. A trial run for visitors opened with a preview last week for 200,000 guests, in a dress rehearsal that reportedly resulted in long wait lines. Meanwhile, organizers suspended use of the expo’s official theme song after persistent complaints it had been copied from a Japanese singer-songwriter. Even Haibo, the cheery blue mascot designed to resemble an animated ocean wave, did not escape the latest round of expo negativity. Chinese netizens seized on his striking similarity to the old American cartoon character Gumby, with bloggers posting accusations that Haibo’s design also was stolen.

In any case, the show is scheduled to go on, and soon. Li Yating, spokeswoman for Metersbonwe, the Chinese sportswear brand, chuckled when asked about potential problems the expo might cause for business.

“Our stores might become too crowded and we might have too many visitors,” she said, laughing. “This shouldn’t be a problem.”

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