Why Chinese Stores Are More Expensive

This picture taken on July 11, 2013 shows a man (L) resting in front of a billoard outside a mall in Beijing. China’s economic growth dropped to 7.5 percent in the second quarter of this year, analysts predicted in an AFP survey ahead of fresh GDP figures Monday, projecting a further slowdown for the world’s second-largest economy.

Photo by WANG ZHAO/AFP/Getty Images

Patti Waldmeir on the promise and peril of building a luxury retail presence inside the People’s Republic of China:

Mainland luxury taxes are so high that even when discounted, luxury merchandise at outlets is still more costly than shopping overseas. […]

In the nearby Gap outlet store, where hooded sweatshirts are offered in every conceivable colour, their price tag of Rmb399 is hardly a bargain. A shop assistant points out that a 50 per cent discount is offered – but only if shoppers buy six Gap items.

That’s about a $65 hoodie at today’s exchange rates, which is quite a bit more than the undiscounted prices listed on today.