Shanghai welcomes more overseas brands looking to make a mark in the metropolis

A host of international brands are looking to make their mark in the east China metropolis of Shanghai, with more overseas firms opening up their first stores in the megacity as they look to tap into the vibrant market and meet the diversified demands.

Shanghai, long known as a buzzing cosmopolitan center, now has more coffee shops than any other city worldwide. But despite the fierce competition, foreign brands remain enthusiastic about opening up new stores in the city.

Despite the city having over 9,500 coffee shops all vying to give customers their daily caffeine fix, more top brands are keen to get in on the action and offer fresh drinks to the city’s consumers.

American fashion brand Coach opened up its first coffee shop in the city in early July, with this being only its third global venture.

“The objective for us is not to compete with coffee shops. We are not competing. The objective for us is to create unique experiences from a retail point of view and luxury, fashion and hospitality are two things that go very well together on that,” said Sandeep Seth, chief marketing officer of the Coach Brand.

In the first seven months of the year, there were 770 so-called “first shops” which opened in the city, a year-on-year increase of over 16 percent.

Many believe the increasingly sophisticated demands of Chinese consumers and their desire to try new things is one of the prime reasons why companies are rushing to compete in this bustling retail market.

“I visit new shops during weekends for leisure,” said a local resident.

“My office isn’t far from here. When I’m not busy at work, I come to check out new shops,” said another.

China has seen a consumption boom so far in 2024, with retail sales in the first half of the year reaching some 21 trillion yuan (around 3 trillion U.S. dollars), marking a year-on-year increase of over 3 percent.

The healthy consumption trend in Shanghai is also clear in the number of new shopping malls which are springing up. In the first half of the year, 18 new commercial complexes opened in the city, with over a dozen new ones expected to welcome customers in coming months, hitting a historic high.

Insiders believe that the appeal of launching a business in a renowned destination city like Shanghai is what draws in many firms to “test” themselves on the market.

“If you’re a foreign brand, I think you tend to follow other brands that have already entered the market. You feel confident that this is a good place to test your brand. And obviously from the domestic sector, the domestic brands, the new entrants, the startup companies, equally, Shanghai is a good marketplace to test your brand,” said Anthony Couse, CEO of JLL Asia Pacific, a leading professional services firm.