LONDON - Just a day before the Olympics began, the Bank of England announced poor second-quarter economic data, a downturn of 0.7%. The recession is worse than expected.
Obviously Britain was not going to waste the opportunities presented by the event. Using the world’s attention to the London 2012 Games as a magnet, the country has organized more than a dozen business summits, including one theme event called China Business Day devoted to discussing business opportunities in the UK.
Among the 8,000 accredited reporters who have come to London to cover the games, 700 hail from China. This probably explains why several meetings are organized specifically between Chinese journalists and members from the All Party Parliamentary Group for East Asian Business, London & Partners, the official promotional organization for London, the Greater London Authority, and not surprisingly the London Chamber of Commerce -- all aiming to attract both Chinese investors and consumers.
Aren't other countries jealous of this unique attention?
“China is indeed the biggest focus,” David Slater, London & Partners Global Sales Director told Caixin. “It’s a once-in-a-lifetime chance to showcase what London can offer.”
Slater said that London & Partners employ seven staff members who speak Chinese -- precisely to introduce a series of investment possibilities in London. China comes second after America in terms of number of investment deals in the UK .
In 2011, London received more than 30 Chinese investment projects, providing 550 job opportunities in sectors such as software, financial services, the creative industries and retailing.
A delegation from the China Entrepreneur Club comprising two dozen top Chinese industrialists occupied the most significant place on the red carpet thrown for global investors. Among the visitors were Liu Chuanzhi, the founder of Lenovo and the world’s second biggest personal computer maker; Ma Weihua, the President of China Merchants Bank; and Yu Minhong, the founder and CEO of New Oriental Education & Technology Group.
This visit initiated by the China Entrepreneur Club received full cooperation from UK Trade and Investment, a government department, which contacted the UK's business elite -- including Lord Rothschild, the Virgin Group, as well as the Prime Minister, the Mayor of London, members of the royal family and other dignitaries.
On July 25, several of these entrepreneurs had a brief meeting with Prime Minister David Cameron at Downing Street, followed by a roundtable with the UK Trade Minister Stephen Green and London's Mayor Boris Johnson. "Although the meeting with Mr. Cameron lasted only about one minute, it was just great," Liu Chuanzhi told reporters, "because for the Olympic opening, eighty heads of state will arrive. It is particularly unusual that we were received under such circumstances."
Meanwhile, the message brought by Chinese industrialists is music to the Brits' ears. The Chinese economy is shifting in a consumer-driven direction now, and industrialists are looking for British partners to develop this market together.
China’s affluent class has become the object of close attention for the British luxury industry. As Michael Ward, Managing Director of Harrods, London’s most famous luxury department store, told Caixin that Harrods business with the Chinese has grown nine-fold over the past four years. In 2008, the store’s business with the Chinese was two-thirds that of the Americans, whereas it’s now five times greater.
To cater to Chinese clients’ needs, Harrods now hires more than 150 staff who speak Mandarin and they are equipped with more than 100 CUP (China Union Pay) terminals. “The menu of the restaurant has been revamped to be more in line with Asian tastes,” Ward said. “Europeans typically get to know these famous brands through their parents. Others learn to know them through practice. However the Asians’ stage of practice is shorter than anyone else. They reach for the top luxury apparels very quickly, whether it’s Christian Louboutin shoes, Hermès bags or Vacheron Constantin watches.”
Blooming on the London stage
London has set the stage for the Olympics -- and the Chinese firms have started taking advantage. On July 26, Bosideng, a Chinese clothing retailer, launched a new flagship menswear store near Bond Street, the poshest shopping area in London, just a few hours before the Olympic torch passed by the store. “What we’d like to change is the image that China is only a garment manufacturer and not a design power,” said Zhu Wei, the CEO of Bosideng’s London store.
The Group’s Chief Financial Officer, Jimmy Yun Kuen Mak explained that Bosideng has invested 300 million yuan for the flagship store which is aimed at sales in upscale business and leisure menswear, as well as Bosideng’s more well-known garments of down. "A Chinese brand with UK design and manufactured in Europe."
“The cost of this store’s opening has been very high, but we think it’s worthwhile”, Zhu Wei said of the 300 million RMB ($47 million) pricetag. This is a breakaway for Bosideng from its previous sales model selling through distributors. Switching to take control of their own retailing is still very rare in China among similar garment companies. "We intend to put roots down here for the long-term and use London as a bridgehead to extend into the European market".
Zhu is not worried about the effects of the slowdown of the European economy. “This is a strategic decision. We are aiming for results in five or ten years, not an immediate gain or loss,” he said.
Bosideng is not the only Chinese upmarket clothing brand ready to debut in London. On the same day of the Olympic opening, a fashion show of the Eve Group --another Chinese menswear outfit -- was organized as part of the China Business Day event. “It’s a particularly good opportunity. We can influence some very important business figures through this activity and get them interested in elements of Chinese fashion -- as well as propagating Chinese culture,” Eve’s CEO, Xia Hua, told the journalists. “This is a far more influential method than calls from the government.”
The fashion show was a warm-up for the brand’s first workshop as well as a retail store opening this coming winter in London. Xia revealed that the store will be situated in Notting Hill, since the group has a brand with the same name.
What triggered Eve Group’s decision to accelerate its entry into the London market was the praise offered by the chairman of the British Fashion Council after the fashion show last February. “Notting Hill changed the image of Chinese design. It can be worn by Westerners. And it’s a brand that can develop huge commercial value,” Xia concluded.
This fearless Chinese company intends to aim at the high end of the market, with a price range similar to that of Armani and other famous brands. “To have confidence is one thing, to have a good attitude is another. We have chosen to come up with a Chinese brand with Chinese concepts,” Xia Hua declared. “So now we have to make it endure."
Read the original article in Chinese
Photo - Bosideng Facebook