WWD.com/retail-news/retail-features/eyeing-olympics-retailers-undeterred-by-beijing-air-quality-478000/
government-trade
government-trade

Eyeing Olympics, Retailers Undeterred by Beijing Air Quality

When a thick blanket of smog fell over Beijing last Friday air travel in and out of the Chinese capital ground to a near halt, road traffic slowed to a crawl and irritation with the city's omnipresent pollution rose to new heights.

BEIJING — When a thick blanket of smog fell over Beijing last Friday air travel in and out of the Chinese capital ground to a near halt, road traffic slowed to a crawl and irritation with the city’s omnipresent pollution rose to new heights.

Melvin Chua boarded his flight in Shanghai at 8:30 a.m., bound for Beijing and the opening of the capital’s new Lane Crawford outlet that evening. After a “nightmare” wait of six hours on the runway, publicist Chua’s plane finally took off and he made the opening. Several others weren’t so lucky, as hundreds of flights were canceled or delayed last Friday.

But industry insiders and researchers agree that Beijing’s famously bad and not-improving pollution is more annoyance than deterrent as retailers prepare for the 2008 Olympic Games here with massive expansion and new outlets.

Last weekend’s pollution was very bad by any measure. The two days Oct. 26 and 27, according to the State Environmental Protection Administration, scored 184 and 179, respectively, on the Chinese air pollution index (the base is 100). Those days marked the worst air in the capital since last July, when levels of pollutants included sulfur dioxide, considered by the World Health Organization simply unhealthy for human consumption.

The smog of Beijing is a modern rule of the city rather than an exception. Residents tend to sigh, cough and carry on as they slog through life in one of the world’s most polluted capitals.

Still, the impact of Beijing’s bad air on its burgeoning retail sector appears, at most, negligible. While sales clerks at capital-based outlets for Nike, Zara and Sephora confirmed that indeed, business is noticeably slower when the air worsens, major retailers report little concern over possibly losing customers who choose not to venture out when pollution is at its worst. Instead, they focus on the capital’s growing appetite for consumer goods. A lack of environmental awareness among the general population means retailers in China have not yet been pressed into enacting “eco-friendly” programs as in other countries. Chinese consumers don’t have access to the same information about pollution and climate change so prevalent now in Western media, said Paul French, Shanghai-based partner with the U.K. research publisher Access Asia, and hence, remain less concerned.

“The sort of initiatives that [companies] like Tesco are taking in the U.K. to reduce carbon emissions from their stores do not seem to be being implemented here — I’d argue that’s due to no consumer pressure, so they don’t do anything,” said French.

All this as Beijing prepares for its Olympics debut just 10 months from now. In a new report, the United Nations Environmental Program said the outlook for the 2008 Games remains bleak when it comes to Beijing’s air quality. Despite moving heavily polluting factories elsewhere and other “cleanup” measures, the agency found that Beijing’s bad air will be an unwelcome presence during the Games in August 2008.

Poor air quality from industrial and commercial pollution remains a “major concern” as the Games approach, the report found, and little can be done to reverse current patterns.

“Beijing’s old or nonexistent infrastructure, rapid development and geological constraints mean the city still has considerable challenges to overcome, especially in the areas of air and water quality,” said the report.

The city’s geographic location, amid mountains that block air circulation, and its growing number of seasonal dust storms compound the problem, the report added.