Shenzhen’s strong economic and demographic fundamentals provided a solid foundation for the development of the local consumption market. Its GDP increased 6.7% YoY to RMB3,066.49 billion as of end-2021, ranking third among the cities in China. The city’s retail sales increased 9.6% YoY to RMB949.8 billion. Meanwhile,  the per capita disposable income and consumption expenditure of local residents increased 9.2% and 14.1% YoY to RMB70,847 and RMB46,286, respectively. These positive indicators rendered strong support to the growth of many retailers new to Shenzhen or at least helped enhance the confidence in expanding in the locality. The Commerce Bureau of Shenzhen Municipality announced a measure of building the city into an international consumption centre on the back of China’s nationwide implementation of expanding domestic demand and boosting consumer spending across the country, which is expected to attract more retail brands into the Shenzhen market.

LEASING MARKET EMBRACES BRAND-MIX UPGRADES BUT FACES  PERATIONAL CHALLENGES

As consumption is upgraded in the city in terms of fashion taste and increasingly metropolitan lifestyle, retail brands spanning from luxury to chic and fashion labels have become widely known to the locals, spurring store openings to capitalise on Shenzhen’s business growth in the past two years. On top of that, although the suspended cross-border travelling resulted in a lock-up of consumption of luxury products within Shenzhen, it gave a bigger room for luxury brands to rapidly expand their business in the city. This could be demonstrated in several cases.