SKP dominates the Xi’an booming luxury market
What: Xi’an is a city with a strong potential, even though it does not have either the size or the power of Beijing and Shanghai, and SKP was the first retailer to sense it.
Why it is important: SKP is planning to double down on Xi’an by opening a SKP-S location, just like in Beijing, where the SKP-S location is praised for its quality and edgy approach.
Although Shanghai and Beijing dominate the Chinese luxury market, other and lesser-known destinations are also important in terms of consumption. Xi’an is a good example, by being the 10th city in terms of luxury consumption in China, with 12.95mn citizens (the 8th most populous city in China) and the 24th largest GDP in the country (growing +13.7% vs. 2019).
SKP has led the way in terms of luxury consumption, by opening the Xi’an 20-floors store in 2018 and bringing all luxury behemoth brands to the city. SKP Xi’an is 3 times the size of Harrods and showcases more than 1,000 brands on 250,000 square metres (60% of those brands entered Xi’an with SKP). In 2021, SKP Xi’an reported a revenue of USD $1.26bn, the 18th most successful mall in China. It is believed that the extremely popular SKP VIP black card membership is strongly contributing to the success of SKP in the city.
The article also explores other notable retail hotspots in Xi’an: SAGA Mall (where stores are not directly managed by luxury brands like at SKP), and Zhongda International Shopping Mall, which is less high end than SKP and SAGA. Luxury shoppers in the region include what the article calls the “Coal bosses”, mine owners who made their money in natural resources extraction (the region is rich in coal and other natural resources), but also a rising middle class working in the booming logistics and technological sector (Alibaba and JD.com have offices in the city), and customers from the north western cities where luxury brands are not yet massively deployed (Gansu, Ningxia, Qinghai, Xinjiang).