International Law

The Nightmare Of China Retail. It's All Good. And Damn Hot.

By Dan

I have a client/friend going into China retail in a BIG BIG way. I wish I could be more descriptive of what he and his company are doing, but about all I can tell you is the following:

1.  His company is moving faster than I have ever seen a company move. Their plans are to open more stores in less time than I have ever seen. Despite this, my client has nightmares they are not moving fast enough. He really does.

2.  My client sees China retail as THE biggest thing he has ever seen in his 30+ years in business and he is of the view that it is absolutely critical to gain first mover advantage. He thinks that whoever gains first mover advantage in his company's quasi-niche will be the leader in that niche for the next fifty years and that the niche will be profitable "beyond belief" during that span. He says China retail is where US retail was in the 1940s and 1950s and that anyone who is not trying to get in there now to take advantage of this is making a huge mistake. 

3.  My client seems impervious to costs and losses over the next 1-5 years. As he is always saying, "we are building a business here, short term losses be damned." They are getting expensive leases in top locations.  

4.  He says most high end retailers are, at present, "losing their shirts" in China and they just don't care. He thinks they are on the right track with this and that they will start swinging to huge profits within a few years.    

Is he right? 

Full post as published by China Law Blog on June 15, 2010 (boomark / email).