Bulgari to Taco Bell: Across China, Buyers Are the Target

Coca-Cola Store; Beijing.jpg

I work for myself, and when I travel to China on business I have the “luxury” of sleeping on trains and in hostels, and getting around during the day by bicycle. This spring I made a circuit from Beijing to Chengdu (in western China), to Wuhan (right in the middle), and to Shanghai (east coast), before heading back to Beijing. Ostensibly I was there to hunt down consumer trends.

What I saw was:

  • Cars and smog are killing off the grace of the old cities

  • High-rise apartment towers have doomed more village markets than collectivization did
  • Much of China’s continuing economic boom is a currency sleight-of-hand, and
  • Chinese consumers are a lot less interested in Western brands than CEOs of multinationals would have us believe in their upbeat annual reports

Herewith, notes from the lower berth on many sleepers and the saddle of whatever Giant bicycle I could rent, by which means I covered 3,134 miles in less than two weeks:

Beijing: For grace and charm, nothing in China beats central Beijing. At night, the lights around Tiananmen Square glow like those along the grand canals of Venice. During the day, Beijing suffers from a carbon dioxide whiteout, China’s equivalent of London fog that has made the city a respiratory health disaster.

Beijing is also at the uncomfortable crossroads of a political system struggling to accommodate dialectical materialism with emerging consumer pleasures. But the means of production are distant from Beijing power brokers, a reminder of how Marx railed against absentee landlords.

The biggest contribution that the central bureaucracy has made to the Chinese economic miracle is to depreciate the renminbi to subsidize exports. With an exchange rate of ¥6.25 (yuan) to the US dollar, things that cost $150 in the West, such as a hotel room, are $24 in China.

That accounts for an economic boom on the export side, but limits the demand for imported western products. If you are a Chinese worker who earns, on average, $900 a month, are you going to spend $150 on imported Air Jordans?

The currency mismatch feeds the thriving market in Western knockoffs, but another reason for rip-off branding, I suspect, is that the idea of personal space is alien to Chinese daily life. Translated into consumer speak, that may explain why no one cares a fig about copyright laws, patents or trademarks.

Across China: My train ride to western China lasted more than 24 hours. From my window, beyond the miasma that is Chinese air, were countless high-rise towers, many forty or fifty stories high, where rural residents have been resettled. Someday, China will be the people’s republic of tenement housing. The next revolution will begin when enough elevators are out-of-order.

In the meantime, local shopping has become as centralized as once was the communist party. Big box stores — from Home Depot to the French supermarket Carrefour — are betting the ranch on making it alongside these brave new world housing complexes.

The do-it-yourself corporate entities — a big fixture of malldom — have not yet figured out that Chinese women, not men, drive the Saturday afternoon purchases, and that few Chinese have SUVs to haul the stuff home.

Chengdu: Yet another faceless city of the Asian miracle, Chengdu is clogged with late-model cars in traffic, and dotted with western boutiques and high-rise buildings.

Cartier and Bulgari are on the best corners, but what attracts local crowds is American fast food, the ideal combination of Asian, on-the-go convenience and international branding, held together with US trans fats. Shares in YUM! Brands — the Chinese franchise owners of KFC, Pizza Hut, and Taco Bell — are up 600% since 1999.

South of center city, I biked past the world’s largest building, the New Century Global Centre, about the size of four Astrodomes with the façade of an airport terminal. Part mall, part exhibition center, water park, university, iMax cinema, hotel, restaurant, and office complex, it's a consumption monolith. Still, it has the feel of an enormous recycling center where government money is, so to speak, washed (maybe at the artificial beach?) into the accounts of the new class. So much for the Chinese economy prospering only as the result of long work hours.

Wuhan: East of Chengdu, this Yangtze River city is a conglomeration of three Qing Dynasty districts into a modern juggernaut. It saw the first outbreak of the 1911 Revolution, remembered with a few Sun Yat-sen statues and museums (although he was in Hawaii when the first shots were fired).

Crossing the Yangtze on a ferry — new China as a slow passage through the heart of darkness — the river water was the consistency of crankcase oil, and smog obscured the far shores, no doubt the byproduct of all that Appalachian coal that gets exported to China on Warren Buffet’s trains and bulk carriers.

Doing my field research on Chinese consumerism in several superstores, including Walmart, and at Starbucks, I was fascinated at how little Western companies cater to Chinese tastes. It's not only that there’s no Dragon Latte at Starbucks. One of the sins of branding is to add Chinese characters to Western labels, so French supermarkets in China look just like those in Paris.

Maybe the centrally planned economy is alive and well, but it's living in exile in places like Arkansas or Seattle? At least I didn't hear anyone in Wuhan complaining about aisles full of junk made in China.

Shanghai: Its new reputation is as China’s New York City, a blend of high-rise glitz and coastal sophistication. But that’s if you are in expense-account Shanghai, eating in all those revolving restaurants. I got around on long marches to metro stops and by bus and taxis— China on five traffic-jams-a-day.

At a food services convention that I had travelled to attend, huge exposition halls were devoted to things like espresso machines and Italian gelato, the budding tastes of modern China.

From the view at the convention hall, China looks like a treaty port of Western desires, with Mao’s capitalist road running through it. I wonder, though, if shoppers will ever make the switch from street vendors to the Great Mall.

On the outskirts of Shanghai, a colonial-style shopping center had everything from Pizza Hut to Ben and Jerry’s ice cream. It was awash with French wines, English clothing, American cosmetics, Spanish fashions, and Swiss pharmaceuticals, but, when I was there, few customers. It felt like an ultra-upscale military PX, although the shoppers were as listless as terra cotta warriors. Build it and they will come?

Wandering the aisles of China's consumption centers, I came to the conclusion that Western sales representatives (with their sample bags) are the new missionaries. They've come to the East to preach salvation, based on new packaging for old products, but they're as rigid in sticking to the gospels of Home Depot as they once were about peddling the Book of Mormon.

As André Malraux wrote in 1933, as prescient about the Chinese revolution as he was about 2014 consumers, “Europeans never understand anything of China that does not resemble themselves.”

Matthew Stevenson, a contributing editor of Harper's Magazine, is the author of Remembering the Twentieth Century Limited, a collection of historical travel essays. His new book, Whistle-Stopping America, was recently published.

Flickr photo, in Beijing's Oriental Plaza shopping mall, & caption by Ming Xia, The Coca Cola Store: "China is a very receptive market to brand extension programs - Playboy clothing and Pepsi sneakers are ubiquitous in the PRC… this looks to me as if it is a test unit."



















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Resemblance

I find this to be so true in West Africa as well. The interventions, the solutions and the offerings resemble those that have worked in the West. Oh there is some localization but usually not enough for them to be durable.