Out­let leader uses ‘vil­lage’ for shop­ping

China Daily (Canada) - - CHINA - By WEI TIAN in Shang­hai weitian@chi­nadaily.com.cn

Fac­ing a slow­down in China’s lux­ury mar­ket, Value Re­tail, the world’s leading out­let de­vel­oper, is look­ing to re­de­fine lux­ury shop­ping in China with more than just com­pet­i­tive prices.

“Our in­tent is to cre­ate an au­then­tic ex­pe­ri­ence, in­clud­ing the art­work and restau­rant, which would be some­thing you can only ex­pe­ri­ence in our vil­lage,” Mark Is­rael, Value Re­tail’s CEO, told China Daily.

Al­though Value Re­tail may not be fa­mil­iar to most Chi­nese cus­tomers, one of its star projects — Bices­ter Vil­lage in Eng­land —has gained recog­ni­tion among over­seas Chi­nese tourists who love fash­ion. Lo­cated in north­ern out­skirts of Lon­don, Bices­ter Vil­lage is among the must-go des­ti­na­tions for the nearly 300,000 Chi­nese trav­el­ers to UK ev­ery year.

“We at­tract more and more cus­tomers from China. In fact, 80 per­cent of Chi­nese tourists vis­it­ing the UK also visit Bices­ter Vil­lage,” Is­rael said.

Bices­ter Vil­lage has the high­est per square me­ter an­nual sales vol­ume in the world at 13,000 pounds ($21,926). But Value Re­tail’s am­bi­tious growth plan isn’t stop­ping there.

“China is the most im­por­tant con­sumer mar­ket. If you are go­ing to be truly global busi­ness to­day, here is where you need to be,” Is­rael said.

In May, Value Re­tail opened its first vil­lage out­side of Europe, in Suzhou, an af­flu­ent city in East China’s Jiangsu prov­ince. The Suzhou Vil­lage is twice as large as Bices­ter Vil­lage, and it’s the largest among Value Re­tail’s 10 vil­lages world­wide. There are about 100 bou­tiques and 15 restaurants in the de­vel­op­ment’s first phase, and Is­rael said the vil­lage will be ex­panded by an­other 50 per­cent in phase two.

Scat­tered among the stores’ Euro­pean-style ar­chi­tec­ture are some of Chi­nese cus­tomers’ fa­vorite brand names, in­clud­ing Gucci, Coach, Hugo Boss, Givenchy and Ralph Lauren.

Al­though only fewer than 10 stores have opened, Is­rael said the ob­jec­tive for Suzhou Vil­lage is to ex­ceed the Euro­pean sales vol­ume.

Suzhou Vil­lage is the first step for Value Re­tail’s longterm strat­egy for China.

A shop­ping vil­lage in Shang­hai, which will be even larger with 150 bou­tiques and

We at­tract more and more cus­tomers from China. In fact, 80 per­cent of Chi­nese tourists vis­it­ing the UK also visit Bices­ter Vil­lage.” MARK IS­RAEL CEO OF VALUE RE­TAIL

restaurants, will open in the au­tumn of 2015. The Shang­hai Vil­lage will be lo­cated in the Pudong New District and be a neighbor to the Shang­hai Dis­ney­land Re­sort as part of a new in­ter­na­tional tourism com­mu­nity.

“Over the next five years, we’ll add an­other three to five vil­lages in China,” Is­rael said. To­tal in­vest­ment for the five-year ex­pan­sion may be around $450 mil­lion, the Wall Street Jour­nal re­ported.

In 2012, Chi­nese go­ing abroad be­came the big­gest spenders among over­seas shop­pers, with $102 bil­lion spent in for­eign coun­tries. Union­Pay es­ti­mated the num­ber of out­bound Chi­nese tourists will grow by an­other 15 per­cent in 2014. A re­port by McKin­sey & Co sug­gested that over the next decade China’s ur­ban fam­i­lies that can af­ford a pri­vate car or lux­ury prod­ucts will grow by six times.

But Is­rael said there can be only so many Chi­nese tourists go­ing over­seas, and the huge po­ten­tial for pur­chas­ing power is still within China’s do­mes­tic mar­ket.

“A lot of our brand part­ners are plan­ning to build a fu­ture in China, and they need to have a proper way of be­ing in the out­let mar­ket. They asked us to come here,”he said.

Is­rael said that when it comes to prices in China, Value Re­tail of­fers the same dis­count as in Europe.

“For us, one of the most im­por­tant things is au­then­tic­ity,” Is­rael said, ex­plain­ing that be­cause Value Re­tail only works di­rectly with brand part­ners, prod­ucts will be au­then­tic, new and within one or two sea­sons.

“So you may find less ex­pen­sive prod­ucts some­where else in the world. But you won’t find the en­tire ex­pe­ri­ence, the se­lec­tion and range of prod­ucts, the ser­vice and hos­pi­tal­ity, for a cheaper price,”he said.

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