Opening a High Fashion Boutique in Guiyang, China09 Jan 2015
My friends in Guiyang tell me they live in a second-tier city. In China, I don’t know if these tiers are officially described by the government or if it’s based on perception, but Guiyang does feel like a bit of a step behind in development from cities like Beijing, Shanghai, Guangzhou, Chengdu, and Shenzhen.
One aspect of life in a second-tier city in China is reduced access to international brands. Large international chains like Uniqlo are still available in one or two major shopping malls, but high-end luxury brands have not yet arrived.
But demand for luxury items certainly still exists in a city like Guiyang. One friend there told me “in Guiyang the rich are very rich, and the poor are very poor.” I’m not sure if it’s true (are Guiyang’s wealthy still wealthy when compared to wealthy people living in a first-tier city?), but one thing that’s noticeable is that Guiyang’s rich like to show off their wealth with flashy luxury cars, VIP access to restaurants and bars, and the latest high-end fashion.
That the city’s wealthy like to show off their wealth is not unique to second-tier cities, but in Guiyang it leaves a gap in the market between the demand for luxury goods and their availability. Many probably travel to Hong Kong (or maybe Seoul, Tokyo, Bangkok) to buy luxury goods, but international travel obviously isn’t feasible every time someone wants to go shopping. Additionally, though Hong Kong has no shortage of luxury goods available, it is such a large shopping hub that even high-end boutiques like Cartier and Louis Vuitton have so many customers that they frequently establish outdoor queues for their shoppers, a very unappealing practice for a wealthy elite that is accustomed to VIP treatment.
So last year, three friends of mine recognized this gap between demand and local supply and decided to open a boutique that would offer a VIP shopping experience with local availability of high-end clothing that they select by hand. It just opened on the first of January. I think a story about how they planned their business highlights a lot about how China’s wealthy like to shop, so it’s a story worth telling here.
The boutique owners enlisted their friends who are studying or working abroad in London and Tokyo to purchase items in person that they think will be popular among Guiyang’s wealthy. They obviously focus on purchasing brands and specific pieces that are unavailable in China. These friends and partners purchase the items in Tokyo and London at local retail prices and then ship them to the boutique in Guiyang where they are marked up 50% or more in order to make a profit. The result is a hand-selected catalogue of luxury shoes, purses, accessories, and clothing (usually only in one or two sizes) at sky-high prices but with a promise of exclusivity and the convenience of being able to see and buy everything in person.
My friends chose what seemed to me at first to be a terrible location: on the eighteenth floor of a commercial office building with no sign or directions at the bottom to draw people inside. I realized after arriving that the location is suitable because it adds to the store’s exclusivity. The shopowners will not be bothered with window-shoppers, and those who are serious about buying a specific brand that they stock will be able to find out about it online through their WeChat store (微店) and through a bit of targeted marketing in the right social circles. The location ensures that the volume of customers will be low but that each one will probably come with money and leave with something.
The customer volume and desire for VIP treatment was considered when my friends were planning their boutique’s layout. My friend Mengxin took me to see the store before it was opened and explained that she wants customers to sit and relax on a big leather couch with a coffee table (shown above), have a glass of wine and try some snacks sent from London or Tokyo that can’t be bought in China, and then eventually chat about the fashion styles they admire and brands they are interested in. During conversation, the shop owners may bring over a few items of clothing to showcase on the coffee table rather than encourage the customer to browse their selection themselves.
The design of the store is a mix of faux-vintage and industrial furniture and hardware that in China gives off a more cultured, international feel than China’s traditional luxury styles. The clothing racks and shelves are made of pipes purchased from a local hardware store and arranged in unique shapes (see above). The furniture and other accessories, like faux-rusted US car license plates and an antique-looking fan, were all hand-selected from stores on Taobao to fit their desired aesthetic.
The name of the store is in English. Using the three friends’ family names’ first letter, they came up with a name: T.Y.C: Take Your Clothes. They had a small issue as the first run of shopping bags contained a little typo (see above), but the actual name of the store is not too important for their business. What’s more important is that the name represents how personal they see their new store: these friends themselves have plenty of friends in Guiyang’s wealthier circles that will surely be customers as well as word-of-mouth advocates, and it’s these kind of personal relationships (which are always important in China) that will hopefully contribute to their business success.