Guangzhou: A Luxury Market with Potential

April 5,2022

As the retail center of the Pearl River Delta in China, Guangzhou, the capital of Guangdong Province ranks third in the total consumption of luxury goods among the cities in Mainland China.

According to Luxe.CO’s user survey, Guangzhou is only second to Beijing and Shanghai among the Top 10 cities on Weibo with most tags on luxury brands.

Luxe.CO Intelligence exhibits that among 784 updates by 110 luxury houses on marketing and expansion in 34 Chinese cities, only 13 concerned Guangzhou which ranked 10^th on the list. This means that not only was Guangzhou’s ranking lower than major cities such as Shanghai (144), Beijing (82), Chengdu (48) and Shenzhen (47), but it was even lower than Ningbo, Nanjing, Hangzhou, Wuhan and Sanya.

The high contrast between these two factors in the survey and report shows exactly how Guangzhou is a market with potential that needs more attention from the luxury brands.

Due to its historical and geological conditions, a large quantity of the purchasing power of luxury goods in Guangzhou is transferred and released overseas or in Hongkong. Guangzhou has been lacking in favorable atmosphere and upscale shopping spots. In the recent couple of years, more developers of top-tier commercial real estate have stepped in to put more effort in Guangzhou to fuel the development of the luxury market and propel a stronger rebound of the purchasing power here.

In 2021, the total retail sales of consumer goods in Guangzhou exceeded one trillion yuan for the first time, reaching 1.012256 trillion, a 9.8% year-of-year growth. Guangzhou also joined three other cities in China, Shanghai, Beijing and Chongqing, to be the fourth and the only sub-provincial city to share the honor of surpassing one-trillion sales. The retail sales of gold, silver and jewelry and sports and entertainment goods jumped by 24.9% and 54.9% respectively.

More data on luxury brands:

In April 2020, Hermès relaunched its store at Taikoo Hui Guangzhou and hauled in 19 million yuan in sales on the opening day, breaking the daily record set by other Hermès stores in mainland China.
In 2020, Taikoo Hui Guangzhou achieved the fastest growth and best sales performance among its counterparts of Swire Properties Limited with sales increasing by 36.0% year-of-year. Throughout 2021, its retail sales maintained a 33.4% year-of-year growth.

In 2021, luxury brands held more offline events in Guangzhou than before.

Loewe, Moynat, Lanvin, Valentino and other brands all unveiled their pop-up shops in Guangzhou.

Prada, Gucci and Louis Vuitton rolled out cultural events such as exhibitions and offline conversations in Guangzhou.

According to Luxe.CO, since it opened its doors in 2011, Taikoo Hui Guangzhou has been home to much more luxury brands and enjoyed more dynamics than the shopping malls in other first-tier cities.

In 2020, Taikoo Hui Guangzhou introduced 19 new brands and among them 6 were luxury brands such as Bonpoint, CHAUMET, Chopard, Chloé, Hublot and Jimmy Choo.

In 2021, another 32 brands were introduced, of which 4 were luxury brands. Among them, FRED, Blancpain and Golden Goose opened their first stores in Guangzhou and Pomellato in Southern China.

According to the 2021 annual report of Swire Properties Limited, retail sales grew by 33%, yet retail occupation rate reached 99%, which meant that even new luxury brands wanted to establish stores or existing ones wished to expand store areas in Guangzhou, there was no space available.

The report also pointed out that in the future, multiple projects would be launched in the Greater Bay Area, including a brand-new commercial one, Taikoo Pearl River in the Julong Bay District in Guangzhou.

Other top-tier commercial projects include:

——The MixC

In 2021, China Resources (Holdings) Co., Ltd., announced that two MixC projects would be developed in Guangzhou. It is possible that the first MixC Mall in Guangzhou will be located in Huangpu District.

—— SPG Greater Bay Area Center

The total investment of the comprehensive development project of SPG Greater Bay Area Center Project in Guangzhou reached around 5 billion yuan, with its total gross floor area of 240,000 square meters. Upon completion, its height would be 260 meters, making it the highest landmark in southern Guangzhou.

——Nanfang Building

In 2020, the district people’s government of Liwan in Guangzhou launched a transformation and renovation plan that centered building complexes including Nanfang Building, Guangzhou Postal Museum and Canton Customs Museum, to build high-end commercial and tourism complexes with diverse business models.