High-end retailers in China are betting that their customers’ appetite for luxury goods is matched by their appetite for food.
Vendors selling everything from jewellery to exquisite kitchenware and expensive cars have been adding cafes and restaurants to their shops in the hopes of creating an experience that appeals to social-media savvy younger customers.
And it seems to be paying off, if waiting lists are anything to go by.
Zwilling JA Henckels, the German upscale knife and cookware maker, has found its experimental crossover restaurant atop its store in Shanghai’s buzzing West Nanjing Road has a backlog of reservations.
Eva Liu, the restaurant’s deputy general manager, had to turn down requests from her friends for a table on Christmas Eve and Christmas Day.
“Sorry. Two spots at the bar at 8.30pm, that is the best we can offer,” she told her friends over the phone. “We’ve been fully booked for a couple of weeks.”
Those seats at the bar were quickly snapped up soon afterwards.
The Mediterranean-style eatery, in which food is prepared and eaten using Zwilling’s own products, is the long-established kitchenware giant’s first foray into the food and beverage business in China.
It is expecting revenue in December to reach 1 million yuan (US$143,000).
“Dining is not just about eating, it is more about the experience now in China, and in particular those experiences that can be shared or even shown off. Eating at a top-notch brand like Zwilling is something that is worth taking pictures of, posting on social media and waiting to get tons of likes,” said Liu.
China’s catering market has stood up to the country’s economic slowdown, which saw growth in gross domestic product slow to 6 per cent in the third quarter – the weakest pace in more than 27 years.
Catering revenue through November rose by 9.4 per cent year on year to 4.19 trillion yuan, according to the National Bureau of Statistics, maintaining the same breakneck pace as in 2018.
“Luxury retailers tapping F&B business will be a sustainable trend in the coming years riding on China’s large consumption market,” said Shirley Hu, director of research, CBRE China.
“It’s inexpensive to take a cup of coffee or a drink in a luxury-branded eatery [as compared to actually buying a luxury product]. This will be an important way for luxury retailers to maintain the loyalty of younger consumers.”
The famous New York jeweller Tiffany& Co opened a flagship store on Shanghai’s Huaihai Middle Road on December 23, with one of its signature Blue Box Cafés on the second floor.
The eatery has a six-month waiting list, largely composed of fans of the iconic movie Breakfast at Tiffany’s, according to a spokesperson quoted by local media at the launch ceremony. An enduring image from the film is actress Audrey Hepburn standing outside Tiffany Fifth Avenue, clutching a coffee cup and a croissant.
On Shanghai’s famous riverfront Bund, the French fashion house Lanvin opened a Lanvin Café in December.
Next to it, German luxury car maker Mercedes has one of its concept stores, Mercedes Me, offering test drives as well as peripheral products like teddy bears wearing T-shirts emblazoned with their logo. But most of the space – a whopping 1,500 square metres – is dedicated to food. Western cuisine takes up the first floor while Sichuan food can be found on the second.
Up to 28,000 local foodies on average come to eat in the car maker’s kitchen every month. About eight months after it launched, the experience store has started to turn a profit.
“We are not aiming for a Michelin-starred restaurant, or to make a fortune, we just want a profitable business that appeals to Mercedes-Benz customers,” said Jane Li, chief commercial officer with Applied Brand Solutions, which has exclusive rights to run Mercedes Me stores in mainland China.
Having three already in Beijing, Shanghai and Chengdu, the luxury car producer is planning to open a fourth one next April in Shenzhen.
Adding restaurants allows upscale brands not only to maintain existing customers but also to bring in new ones.
“We have seen that through such platforms [the food offerings], we are getting closer to average people, and making the brand less masculine and much younger, instead of what people used to think of Mercedes-Benz: that it only represents middle-aged, ultra rich guys,” said Li.
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