Passionate consumers and supportive policies make Shanghai a great place for foreign businesses
For many international consumer goods companies, Shanghai is simply “right” as the most important location for their operations in China and beyond.
Perfetti van Melle, one of the largest confectionery manufacturers in the world, based in Italy and the Netherlands, started its Chinese activities in 1994 in Shanghai and recently made the city its regional headquarters.
“Shanghai is a global mega-city, with a healthy economy, an open culture and good offerings in logistics, finance, supply chain, marketing services and technology, etc. Said Hans-Peter Edelbluth, Managing Director of Perfetti van Melle China.
“The city government provides great support, creating an environment conducive to innovation and entrepreneurship, and it is attractive to all kinds of professionals,” he added.
“Especially for a fast-moving consumer goods business, Shanghai is where the market is – local consumers are open to innovative products and concepts, which gives us the opportunity to get feedback and feedback. learn, and that’s extremely important, ”said Edelbluth.
Well known for its brands such as Chupa Chups Lollipop, Fresh Mint Mentos and Alpenliebe Sweets, Perfetti is confident about its future development in China.
“Shanghai offers a perfect setup for the growth of foreign-invested enterprises… It is of course not the cheapest, but we were convinced to settle here, awaiting the continued support of the government, which is the basis of success. of a foreign company. company in the market, ”said Edelbluth.
Indeed, Shanghai is strategic for global consumer goods companies. It was ranked among the top five cities to develop international consumption centers in China by the Ministry of Commerce.
The size of the consumer market in Shanghai is huge, with 90% of global premium brands present in the city, according to the Shanghai Commerce Commission. The city is also the first stage for many international brands, ranking first in China for the opening of the first stores and flagship stores of the companies.
In the first half of this year, total retail sales of consumer goods in Shanghai reached 904.8 billion yuan ($ 139.9 billion), an increase of 30.3% year-on-year and 7.3 percentage points higher than the national average growth.
“Being cultivated in an international consumption center is a boost for the future development of Shanghai,” said the city’s vice-mayor, Chen Yin. “Shanghai is poised to attract more global consumption resources, improve its functions and consumption capacity while accelerating the construction of a modern metropolis with global influence.”
It is therefore not surprising that in Edelbluth’s eyes Shanghai is “ambitious” as a city striving to further develop a more dynamic consumer market to support domestic traffic and serve as a crossroads for a dual strategy. circulation.
By comparison, Shanghai is “dynamic” for Pascal Bizard, senior vice-president of Decathlon China. As a world leader in the distribution of sporting goods, Decathlon has also made Shanghai the regional headquarters of two of its subsidiaries.
“We have been drawn to the rapid economic development and the quality of the business environment in Shanghai, and Decathlon has a firm footing here,” said Bizard.
“Shanghai was the first city on the Chinese mainland to introduce a specific policy aimed at attracting regional headquarters of multinational companies. That was in 2002. And since then, Shanghai’s business environment has improved dramatically, such as faster administrative approvals and more open market access conditions.
“After decades of industrialization, the average level of ‘hard’ environment in Chinese cities has improved. But Shanghai is really competitive in creating ‘soft’ business environments,” Bizard said.
Such strength in soft power has given Decathlon particular confidence to develop further in the market.
“For Decathlon, we encourage people to learn new things and not be afraid to take on challenges,” said Bizard. “These are the qualities of the Shanghai consumers… The people of Shanghai are demanding, and this is a driving force for us to become more innovative and launch more new products.”
Bizard has been in Shanghai since 2000 and has witnessed the evolution of Chinese attitudes towards sport. With more education, people no longer see sport as dangerous, but as an essential part of life to stay healthy.
“People wore whatever was available to play sports. You could see them running down the street in jeans and the wrong shoes ten years ago… But it’s completely different now,” said Bizard.
Shanghai’s rapid changes have given Decathlon confidence in its future development, and it is also the place where the company can find its partners.
“We will benefit from Shanghai’s dynamic innovation environment and seek opportunities to incubate global innovation projects,” he said. “There are many large companies around the world in the consumer goods industry. I see a lot of them in Shanghai. Now is the perfect time for us to work together, to exploit the favorable opportunities of China’s dual circulation strategy.
Besides international companies, Decathlon has also cooperated with a number of Chinese companies, which are also global industry leaders, and hopes to co-innovate with them, Bizard said.
The COVID-19 pandemic has bolstered foreign investor confidence in Shanghai, as the city quickly returned to work and made efforts to turn around its economy while keeping people safe.
“It’s also part of soft power,” Bizard said. “If you call it ‘Shanghai Speed’, it goes beyond our previous definition that if people leave the city for a month, they can find a new completed highway on their return, which is also amazing. “
For Edelbluth, the biggest takeaway from the pandemic is the acceleration of digitization in the city.
“It is changing at an incredible rate, and it is a change in people’s buying habits that is vital for a consumer-centric business,” said Edelbluth, adding that Perfetti van Melle will accelerate the construction of its business channels by line over the next five years.
According to the city’s commerce commission, online retail sales amounted to 148.57 billion yuan in the first half, up 21.2% from the previous year and accounting for 16.4% of the total retail sales of consumer goods.
For Decathlon, e-commerce is also vital and the company has developed online and offline platforms with activity covering the entire sector.
“Shanghai is the gateway to the future, and Decathlon runs on the same track,” said Bizard.
“Over the next five years, we believe that sports will be one of the fastest growing consumer trends in China. To do new tests and do something crazy and relevant in ‘Sport +’, Shanghai has to be the best place, ”Bizard said.