SHANGHAI — Shenyang, an industrial city in northern China, currently boasts more luxury stores than anywhere else in the country, outside of Shanghai and Beijing, but that could change soon, according to new research from FDKG Insights.
FDKG’s study shows that Shenyang, the capital of Liaoning Province, with a population of 5.3 million, boasts more than 100 luxury stores along a strip locally referred to as The Golden Corridor.
Shenyang’s popularity with luxury fashion brands stems from the city’s traditional role as a hub of local industry, making its people unusually wealthy for citizens of a Tier Two city, according to Ken Grant, director at FDKG Insight in Shanghai.
“Historically, the industry in Shenyang has reflected the industries that were driving development China. Industries to do with minerals, big industrial equipment, lots of mines or factories, so the disposable income was completely disproportionate to the economy of the area,” Grant said.
But the good times may be ending for Shenyang, or at least on the wane, as China’s economy moves beyond the heavy industry that made this city rich and Shenyang is struggling to move with the economic times.
“They are kind of being left behind because they haven’t moved on to the service industries or IT or anything like that, they are in the dark ages where China’s economy is concerned,” Grant explained.
Compared to other people in China, Shenyang residents are more likely to shop in order to stay competitive with their peers, FDKG said. In other words, consumers closely follow what everybody else is buying and act quickly in order not to “lose face.”
“I agree that northeastern people purchase for ‘face,’ it is one of the reasons why luxury brands were so popular here. It’s the personality that most our people share in common,” said Miss Li, a 29-year-old TV station editor, who earns 10,000 yuan, or $1,532, at a month and was interviewed as part of the research.
Thus far the city has seen very few luxury store closures, although Grant said that could change soon. The oldest of Shenyang’s four Louis Vuitton stores declined to renew its lease last year, while brands like Dior, Burberry and Cartier have relocated some of their stores recently.
“In the future I think there are possibly too many luxury stores in Shenyang. There are currently three Louis Vuitton stores in Shenyang and if the economy continues on as it is for the next few years, I suspect we will see only two Louis Vuitton stores in a few years,” he said.