SHANGHAI — Shenzhen and Guangzhou may be only an hour’s train ride from each other, but to compare the two Chinese cities is like night and day.
The former is the shiny and immigrant-driven tech capital that has risen from the shadows of Hong Kong, while the other is a key historic port and axis of old-school Cantonese culture. What they do share in common — other than being both located in Guangdong province — is that they are two of the most important powerhouses in China’s south, with each influential in its own right.
Lately it is Shenzhen that has grabbed a lot of the limelight. Brands like Burberry have invested big in the area. The British fashion house recently unveiled its experiential retail Burberry x Tencent store there, a collaboration with WeChat’s owner that fuses physical and digital elements and lets shoppers use their phones to game their way around the store. Beyond that, Balenciaga is due to open a major store in Shenzhen this fall and it’s where SND, the hotshot retailer from Chongqing, chose to open its first outpost outside of western China.
These investments are no mere coincidence. With neighboring Hong Kong battling its third COVID-19 outbreak and its political problems compounding, a significant amount of consumer spending on fashion has been brought back to Shenzhen.
Yichi Zhang, the founder of ASP Consulting and a former Vogue China editor, said her industry peers are reporting their top-selling stores are now in Shenzhen.
“That’s why you see so many store events in Shenzhen recently,” Zhang said.
A native Shenzhenite herself, Zhang said the city has quickly evolved since 1980, when it was set up as China’s first special economic zone. The city is marked by its large youth population and one made up of immigrants from other parts of the country.
“They tend to be high-value customers,” she said. “Shenzhen will be the place if you are seeking purchasing power, but you also can’t neglect the fact that Shenzhen is 14 minutes away from central Hong Kong by speed train [COVID-19 aside]. People in Shenzhen do not mind traveling a little bit to get a better selection or price when it comes to buying foreign luxury brands.”
The retail scene in Shenzhen, although scattered, is dominated by MixC, a national chain of malls owned by China Resources Holdings, and in particular, its Luohu and Tiandi locations. Ultimately, Shenzhen is a border town and its geography reflects that — with the city developing as a long strip along the border it shares with Hong Kong, meaning there are several city hubs.
“The clientele is quite different [across the city],” said Bohan Qiu, founder of the agency Boh Project and also a Shenzhen local. “The eastern parts of Luohu and Futian were developed earlier and were also the commercial centers 10 to 15 years ago. But as Shenzhen’s urban development has expanded west, districts such as Nanshan and now Qianhai are concentrated with tech giants and new elites. We compare it to L.A. sometimes as you have to drive to many places.”
He added: “A lot of the tech companies in Shenzhen are going global, so the mind-set is very different. They are a lot more open-minded, super connected with Hong Kong and also a lot have lived abroad and the mind-set is very international and easy to absorb new cultures and new things.”
Even though Shenzhen is described as “the Silicon Valley of China,” thanks to it being the base of high-profile tech companies like Huawei and DJI, its dress code tends to be a lot flashier than say, San Francisco’s Bay Area. Instead, it’s Guangzhou that has a laid-back approach to dressing.
As the capital of Guangdong province, Guangzhou has been an important city since the mid-Qing dynasty, and thus home to China’s oldest trade show, the Canton Fair. Modern-day Hong Kong-based conglomerates such as Jardine Matheson, Wheelock and Swire all started their businesses in the former French and British concessions of Shamian Island on the eastern side of the city.
To visit Guangzhou is to relish in distinctly Cantonese culture — immersed in great food and in the dialect of Cantonese, which is the same dialect dominant in Hong Kong. In contrast, most people in Shenzhen, a melting pot of arrivals, do not ever learn to speak Cantonese.
Over the years Guangzhou, on the contrary, has kept expanding east. Shangxiajiu Pedestrian Street, Beijing Road Shopping District, Haizhu Square, Wuyang New Town and Taojin Road were the historic districts for shopping, and still enjoy popularity among tourists and local residents. But Zhujiang New Town is now a draw, with fashion lovers increasingly checking out the dazzling flagship stores in International Grand City Mall, G.T. Land Plaza, Guangzhou Friendship Store and Mall of the World, and K11.
But the most prime retail real estate is on Tianhe Road, where Taikoo Hui, One Link Walk, Grandview Mall, Parc Central, Teem Plaza, Grandby Department Store and Victory Plaza sit next to each other, offering all the major international brands, from Louis Vuitton to Zara, and countless small shops selling so-called extra orders — i.e., designer goods straight from the factories.
Given its rich history, Guangzhou also offers worthwhile street-level shopping. The neighborhood of Dongshankou was frequented by the rich and famous at the turn of the 20th century and is now filled with curated boutiques, indie galleries and trendy bars.
Labelhood’s Guangzhou store, A Brick by Labelhood, made its home in the neighborhood. It occupies a well-preserved, Western-style red brick house built in the Thirties. Tasha Liu, cofounder of Labelhood, said she expanded the retail concept to Guangzhou because she was so in love with the building and its unique location.
“People value the quality of life more than anything,” said Liu of Guangzhou. “Compared with consumers in Shenzhen, consumers in Guangzhou pay more attention to practicality. They care more about the design itself, instead of how famous the brand is. They don’t really go for trends or bold designs, they prefer items made with nice fabrics and details. And if they like it, they don’t care about the price point.”
Some, like Yueqi Qi, a Central Saint Martins-trained designer from Guangzhou, had a more critical view of the city’s practical and conservative fashion choices, however.
“My first thought about fashion in Guangzhou is that most people don’t care about fashion,” Qi said. “Most of the men I see in Guangzhou wear sandals and prefer not to wear a shirt, but they will throw on a T-shirt to oblige social etiquette.”
Guangzhou natives tend to be nonchalant about their wealth. An old man wearing a tank top and flip-flops walking in the street could very well own a few buildings in the city center, and a wealthy housewife may bring a Birkin bag to the wet market to carry her groceries in.
Nonetheless, it is the city that helped Hermès haul in an estimated $2.7 million in a single day from just one location right as COVID-19 began to subside in China. A sales representative working at a luxury brand in Taikoo Hui, Guangzhou’s leading luxury mall, explained the seeming taste contradiction by saying that many luxury shoppers prefer the more generic designs over bestsellers or runway pieces in the city.
“The generational shopping preferences are quite obvious,” he said. “The younger generation will ask for the same bag that a celebrity just wore or something they saw in a magazine, but the older generation will go for bags with big space and traditional shapes that we don’t even promote. But these bags sell really well,” he said. “Our Shenzhen store sees less of a phenomenon like this.”
Renee Lu, marketing director of The Fashion Door, which has shops in Guangzhou, Shenzhen, Wuhan and Suzhou, agreed that Guangzhou’s consumers are more conservative in taste but they should not be underestimated. Guangzhou has also benefited from a repatriation of spending recently. The city has been a popular source of immigration since the 18th century and wealthy overseas Chinese have come back in big numbers due to COVID-19 travel restrictions. Their generous spending helped The Fashion Door triple its monthly sales target last month, Lu said.
While it would be easy to characterize the relationship between these two cities as a rivalry, it’s how they fit together that’s more pertinent. The Chinese government’s roadmap for economic development is intensely focused on mega-city clusters.
Nineteen city clusters have been identified across the country, but the three that are of global relevance are Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Pearl River Delta Greater Bay Area.
The Greater Bay Area (GBA), first mentioned in China’s 13th Five-Year Plan in 2016, includes Guangzhou, Shenzhen and Hong Kong as the primary growth nodes but also Dongguan, Foshan, Zhongshan, Huizhou, Jiangmen, Zhuhai, Zhaoqing and Macau.
Each city is connected by highway and high-speed rail, and a dozen inter-city metro lines and multiple bridges are under construction to provide even better connectivity and to boost economic output from the area from the 12 percent it contributed to national gross domestic product in 2018.
A June JLL report on the GBA expects Shenzhen’s growth trajectory will focus on innovation-heavy industries like AI, 5G, robotics, and genetics, while Guangzhou focus will be on more labor-intensive sectors like e-commerce, mobile apps, software and game development.
“Talent has poured into the GBA from across China to the tune of over a million new arrivals per year; working-age residents form half or more of the population of many GBA cities, significantly higher than other parts of China,” the report said.
“While new supply in the retail sector has been substantial, with Guangzhou and Shenzhen seeing 2.1 million and 3.2 million square meters of prime supply respectively over 2015 to 2019, space provision per capita in the GBA continues to trail Shanghai and Beijing and lags behind the average of China’s 12 largest cities.”
John Yao, general manager for the North Face China, described the sister cities as a perfect combination of tradition and innovation. “The two cities both have a huge potential…they can complement each other in a very good way.”