In a bid to strengthen its consumer economy and boost its global influence, Shanghai is offering brands that open their first store in Asia (or indeed the world) in Shanghai a one-time reward of RMB 1 million (about £111,000).
High-quality product launches and debut exhibitions held in the city will also have access to subsidies of up to RMB 1.2 million.
The incentive is part of the “First in Shanghai” campaign, which also includes provisions to optimise the application and approval process for permits for launch events, and ease customs clearance requirements for imported products to be used in those events (e.g. displays, samples, etc.).
While the incentive is unlikely to be significant enough to tempt major international brands (which most likely already have a store in Shanghai anyway), it could prove useful for SMEs or brands looking to test the waters in the Chinese market.
One international brand that has already bet on Shanghai this year is Supreme, which opened its first store in China in the city in March. Despite social media chatter that the brand had missed the peak of its popularity in China, the store attracted massive queues for the first few days after it opened. Also in March, luxury brand Loewe unveiled its first public exhibition, Crafted World, at Shanghai Exhibition Centre.
According to the Shanghai authorities, 5,840 stores opened in the city between May 2018 and December 2023, 80 of which were first stores in Asia. New retail concepts are already up 55% year-on-year in the first quarter of 2024.
Shanghai is a key destination for brands looking to tap the China market, and this policy is a step towards encouraging greater diversity in the city’s retail scene. Nevertheless, as journalist Yaling Jiang noted in her Substack publication, Following the Yuan, the policy doesn’t address China’s key economic pain point, which is consumer confidence.
