A market for Western luxuries ?

Shanghai Expat Forum Index » About the Site Forums » Doing Business - Announcements

Author

Message

hadrianus

Newbie

Joined: June 23, 2004
Posts: 1

Status: Offline

Posted: June 23, 2004 - 11:56 PM
Post subject: A market for Western luxuries ?

Hi there,

I'm over here in Europe, and I keep reading about the boom in China and in Shanghai specifically. I hear a big middle-class demand is building up for Western luxury goods which are not made or sold in China (perfumes, clothes, handbags etc...)

Is all this true ? Are many Western entrepreneurs setting up small businesses there (I'm not talking about the big MNC's) ? Surely there must be many barriers, apart from the obvious language and cultural ones, which get in the way of setting up a business there ?

I would be very grateful for any advice/information anyone could give me on this subject.

In fact, I'm thinking about setting up a business exporting specific types of luxury items to China. Is there anyone out there (in Shanghai), preferably a Chinese person but not necessarily, who would be interested in a joint venture/collaboration on this ?

Cheers,

H.

wesley

Barker

Joined: Jan 02, 2004
Posts: 144

Status: Offline

Posted: June 24, 2004 - 03:25 PM

Hi Hadrianus,

I am over here in Shanghai, though not a local but an ethnic Chinese. I could speak and write fairly well the language of Chinese, understands the culture and eat the way they eat...

Setting up business units is easy in some aspect, the pay up capital for a local own (thatmeans you entrust a local to be the owner of the company) can be really low (fre thousands RMB?) to a min. of US$36k investment for a fully foreign owned company.

The hassles are there, depending on the type of products you are trying to sell in, the taxes of those products you are trying to import in etc will often diminished your profit margin making your product not really competitive... of course unless your product is one of his kind and not many competitors is around. However, bear in mind that, if your products is good and you didn't manage it correctly, it will often be duplicated in a much cheaper version before you knows it.

I didn't really see small (how small is small?) western entrepreneurs setting up small business here, even if they do, most gets into trouble. However, the bigger players, they seem to be doing well. However, you are right that at least in Sh , the people are generally riche and could afford more luxury items, but you may want to do a market survey first if your products are really acceptable and recognised here, in terms of culture and their spending power.

n fact, I have intentions of exporting things to Europe, as generally the products here are more competitive than those in Europe due to the lower cost of production, only setback is that I do not know many distribution channels in Europe. It may be worth investigating.

How about this, you let me know what are some of the products your intention to export, let me check with some of the trading companies the potential of it and also let me know if you do know of any FMCG distribution channels in Europe. Maybe we could collaberate on this...

PM me or message me.