Retail: East Meets West

This past April, I visited Washington, D.C., to attend the graduation of the School of Foreign Affairs at Georgetown University. The keynote speaker was Madeline Albright, former U.S. Secretary of State. In that role, Secretary Albright had many dealings with one of our perceived rivals, The People’s Republic of China. I’ve just returned from a 10-day, five-city tour of China that included Beijing, Suzhou, Wuxi, Hangzhou and Shanghai. Despite being separated by the earth’s most expansive ocean and an even greater cultural divide, the denizens of both lands want similar things. Accordingly, the Chinese believe that the three most important elements of life are longevity, prosperity and happiness.

One of the world’s oldest civilizations that’s still impacting the modern world, China has made tremendous contributions to the collective family of humankind during its 4000-year history. From the Ming, Qing, and Tang Dynasties to present day, China has provided the world with paper making, printing, the compass, tea, silk, porcelain, and now advances in technology.  

The transpacific 16-hour crossing was relatively uneventful if you don't consider a mere flutter of turbulence and a well-prepared overnight dinner of pork dumplings. My first impression of China, while still on the airplane making our final approach, was the sheer density of the place. With its soaring population, the urban landscapes of all the cities on the journey were lined with endless clusters of high-rise residential buildings. With so many people, the only way to build is up. Retail is all about numbers, and the numbers in China are staggering. In contrast to New York’s 8 million people, Shanghai, China’s most populous city, is home to 25 million. 

Once safely landed, the adventure truly began. The first stop along the way was Beijing’s Tiananmen Square. Originally the main entrance to the imperial palace in the Ming and Qing Dynasties, it was at the great gate tower of this magnificent square where emperors of the past gave forth their imperial edicts with great pomp and circumstance. Now, after the War of Liberation, Tiananmen has become the symbol of “The New China.” Throngs gathered under the portrait of the revered Chairman Mao Tse-tung as we were firmly cautioned not to mention the student uprising or the iconic photograph of the Chinese man boldly standing alone to block a line of tanks on June 5, 1989. After seeing scores of soldiers in their dress greens and spit and polished boots; some standing stiffly at attention, others marching in military syncopation, I kept my lips firmly sealed. 

Although dense smog and tangled traffic jams were the order of the day, business opportunities abound as the growth and development of this ancient society is exponential. In order to manage, the government considers the masses above the individual. Accordingly, Beijing controls the numbers crunch through technology, and online retail giant Alibaba, leads the way. Based in Hangzhou, Alibaba is described by The Wall Street Journal as, “by some measures, the world’s biggest online commerce company.”

“They have hundreds of millions of users, and host millions of merchants and businesses. Alibaba handles more business than any other e-commerce company.” The WSJ continues, “Alibaba is the most popular destination for online shopping, in the world’s fastest growing e-commerce market. Transactions on its online sites totaled $248 billion last year, more than those of eBay and Amazon.com combined.”

Also of note, shoppers in China rarely carry a wallet, rather they pay for merchandise in stores with a flash of their smartphones, using apps like WeChat and AliPay connected to their credit cards. In Hangzhou, facial recognition is the newest p-o-s technology.

While in Napoleon’s land of the sleeping giant, I experienced four distinct retail approaches. First, there was the sophistication of the staff at both the jade store and the Chinese herbal store in Beijing, the silk embroidery studio and the silk spinning factory in Suzhou, the fresh water pearl center in Wuxi, and the Longjing tea village in Hangzhou. Here, visitors (tourists are welcomed with open arms by the Chinese government) were captivated by great stories, educational demonstrations and master craftsmanship. The offerings were of the utmost quality.

Second, there was the ever-present street peddler offering everything from silk scarves (high quality polyester) to watercolor brushes and small musical instruments. While at first an item may be offered at one for 100 yuan (roughly $14), upon first refusal it goes down to 50 yuan, and as the process continues, it’s 6 for 20 yuan. It was at the Great Wall that scores of peddlers waited for the enraptured westerners. I was drawn to a Chinese Army hat complete with red star. The price, $20 dollars USD, was more than I wanted to pay, so I declined. $10 dollars USD was the next offer. As I walked away, the hat was unceremoniously placed on my head with a price tag of $5. Sold! The irony was that this purchase of a symbol of authoritarian rule took place at the foot of one of the eight wonders of the world, and it was consummated in communist China with American dollars. (The greenback is still desired by all.)

The next experience was a visit to Peter the tailor in Shanghai. A clever guy, Peter took myriad measurements from my waist and chest to my biceps, thighs, calves and inseam. This 10-minute process began at 1 p.m. By midnight, a custom-made tailored suit of fine Italian wool was delivered to my hotel. At 1400 yuan ($200) I wondered why I didn't buy two or three.

Then, finally, there was “the knockoff market,” appropriately named for obvious reasons. Here, one is ushered in a rather clandestine manner to a secret back room. And here, the haggling begins. The proprietor offers a “Chanel” bag of sorts for a mere $300 American. When one settles on $200 American, the proprietor says, “Take two, one for your sister.” The purchase is made and the merchandise is stuffed into two innocuous black plastic bags as the shopkeeper holds a finger to her mouth and says, “Don't tell.”

In Shanghai we explored the well-known Xintiandi, a stylish pedestrian street featuring Shikumen architecture, and offering strollers everything from barbecued frog on a stick to fine silk Chinese fans. We then boarded the Maglev (or magnetic elevation) train, the fastest train in the world that reaches an incredible top speed of 603 kilometers per hour (375 mph).

From the invention of paper more than 2000 years ago under the Eastern Han Dynasty to lightning fast transportation and retail at the speed of the Internet today, it is clear that the sleeping giant is once again stirring in its lair.