Behold China’s consumer paradise – Asia Times

Behold China's consumer paradise - Asia Times

‘Cause we are living in a material world

And I am a material girl

You know that we are living in a material world

And I am a material girl

– Madonna

China is now the greatest consumer paradise the world has ever known. Before anyone gets all bent out of shape, let us first define what we will be talking about in this piece.

We will not attempt to figure out how much is being consumed, who is consuming, who is not consuming, the growth rate of consumption, consumption’s share of GDP nor whether consumption patterns are morally or ethically virtuous.

Nor will we wax sanctimonious about the plight of sweatshop workers, migrant delivery men or whether ethnic “slaves” are or are not driving cotton harvesters in Xinjiang.  

We just care about shopping. And eating. And drinking. And traveling. And clubbing. And KTV. But we do want value for money. We are not writing this for Saudi princes who have Monte Carlo to race their Bugattis. This is for the rest of us.

Aspirational influencer girls, flexing their swag, showing off their drip and being baddies (on a budget) for their incel followers. Gadget freaks addicted to the latest gizmo that takes spectacular aerial videos, mops the floor or scoots through city streets in eerie silence without breaking the bank. Foodies with hundreds of restaurant choices within walking distance and thousands within shared bike delivery distance.     

Chinese foodies are spoiled for choice. Image: Author Supplied

We are not talking about the countryside, although it can be nice in many places. We are talking about first-tier cities (Beijing, Shanghai, Guangzhou and Shenzhen), the new first-tier cities (Chengdu, Chongqing, Hangzhou, Wuhan, Nanjing, Tianjin, Suzhou, Xi’an, Changsha, Shenyang, Qingdao, Zhengzhou, Dalian, Dongguan, Ningbo), almost all second-tier cities (there are a few stinkers like Shijiazhuang and Baoding) and cool, quirky third-tier cities (Sanya, Qinghuandao, Lijiang, Dali, etc).

The first thing to understand about this consumer paradise is that service in China is now second to none – and we mean you Japan! This applies to everything, from restaurants, to e-commerce platforms, to hairdressers, to banks, to airlines. But this isn’t Japanese service with lots of bowing, scraping and artisanal attention to detail. This is the Haidilao model – industrialized customer service scaled for the masses.

The happiest place in China must be inside Haidilao hotpot restaurants. The mid-priced (US$16 per person) restaurant chain singlehandedly raised the bar for all retail service in China. Customers are ushered through the “Haidilao experience” – a balletically choreographed cascade of thoughtfulness.

Waiting areas have an onsite manicurist, a supervised child playpen, masseuses, table games, shoeshine machine and snacks. Bathrooms are spotless, smell of incense and have bum-washing toilets. Toothbrushes, toothpaste, floss, cotton swabs and lotion are provided by the sink.

Bins for coats are under the table. Warm towels are dispensed shortly after seating. Solo diners are provided a large plush companion. Chefs come to your table to twirl dough into long spinning circular ribbons of noodles. Costumed performers emerge at unexpected intervals to entertain the kids.

Good times at the dinner table. Photo: Author supplied

The “Haidilao experience” has now percolated throughout China’s retail sector. It is now common for malls to devote multiple floors to restaurants, each one crawling over the next trying to differentiate themselves with splashy interiors and creative touch.

Barbers offer hot tea and fruit plates to waiting patrons. Bank receptionists instruct customers on how to use new automated kiosks, ushering the old and the dense to live tellers while serving tea and biscuits.

Bath houses pamper families with hot spring tubs, saunas, massages, tearooms and buffets. The “Haidilao experience” – to envelop customers from entry to exit in a warm embrace of attention – has become the new consumer benchmark. And, of course, no tipping.

In my Hong Kong finance days, I would implore every talented young Hong Konger to take his or her career north – to do time on the mainland. If not, I warned, they would over time feel progressively more boxed-in in their own city. For whatever reason, I never had a taker.

I am now surprised to hear that young Hong Kongers are crossing the border on weekends like herds of migrating wildebeest. They swarm into Shenzhen’s restaurants, hair salons and bath houses to experience a level of service that was never available in Hong Kong at prices affordable to underpaid and checked-out youth. Evidently, Shenzhen’s restaurants and hair salons have greater pull than career advancement – who knew?      

And travel in China. Oh God, the travel. Remember Euro-rail summer backpacking around the continent in highspeed rail, staying in wretched youth hostels, ogling the young lovelies, totally paranoid of pickpockets?

China is Euro-rail on steroids. Faster, cheaper, with more to see, better accommodations and zero safety concerns. You like bright lights, big city? Zip down from Beijing to Shanghai ($92), then make forays into Hanzhou ($10) and Suzhou ($6).

Spicy food? Now go west through Wuhan ($49) to Chongqing ($39) and onto Chengdu ($13). Want to Zen out in Shangri-La? Go south to Guizhou ($42). Stay awhile in a mountain village then go west to Lijiang or Dali ($50) in Yunnan.

Choice of accommodations ranges from $20/night youth hostels to $500/night rooms at the Park Hyatt resort in Sanya during peak season. The trendiest accommodations these days are boutique hotels or Airbnb-type rentals managed by resort operators.

Competition is fierce. Expect free pickup to and from the airport, welcome drinks, a bottle of wine and a professional photo shoot at a splashily decorated boutique beachfront hotel with gimmicky voice-activated room controls ($350 per night during peak season in Sanya). Offseason in Beidaihe, an equally beautiful two-bedroom dog-friendly vacation home rental can be had for $110/night.

Sanya’s beach paradise hotels. Picture: Author Supplied

Don’t like trains? China has 5.3-meter paved roads (versus 5.2-meter in the US) accessing every corner of the country. Barrel down brand-new highways in whatever kind of motor conveyance you like. There are over a million EV chargers in China (versus 160,000 in the US). The putrid American tradition of RV’ing is now all the rage in China. So is the glorious American tradition of the chopper, with its full regalia of leather, tattoos and bottom rocker insignia.

China offers the widest selection of personal vehicles in the world. About 5-10% of Chinese are certifiably crazy, in line with world averages. But in China, that amounts to 70-140 million people, enough to make a market for anything. Every make and model from every corner of the world can be found on China’s highways from the usual suspects to Italian supercars to Ford F150s to Jeep Wranglers to Triumph Motorcycles.

Then there is the explosion of Chinese EVs blinged out with feature-itis which an old car guy like yours truly struggles to keep up with. The topical new Xiaomi SU7 offers a top-of-the-line Max version that goes zero to 100 kilometers per hour in 2.78 seconds, has a range of 800 kilometers and costs $40,000 (versus 3.1 seconds, 640 kilometers and $75,000 for Tesla’s Model S).  

Are you a shopper? With Shein as prelude, Americans are now stupefied by Temu. Those are just tendrils folks. Imagine what the shopping is like at its beating heart source. People, it’s all made in China – whether it’s a $250 pair of PowerBeats Pro earbuds, $55 Xiaomis or a $7.65 as yet generic version sold directly by a contract factory’s retail side operation. The generic earbuds sound no different and have longer battery life than premium versions.

Savvy shoppers can play this game for every consumer product imaginable. Carbon fiber road bikes are now all over Beijing. You can pay $10,000 or more and build a no-apologies Trek frame/Shimano components ride. There are, however, shops all over the city that will build you a custom racing bike with equivalent Chinese parts (e.g. Elves frame, L-Twoo components) for well under $3,000.     

While American tech platforms spent the last decade shoring up their monopolies, China dismantled Alibaba and Tencent’s empires. Is it any wonder that competitors for Amazon and Meta emerged from China and not the US?

While the US Congress has TikTok in its sights (and Shein and Temu have already drawn scrutiny), consumers in China will continue to be spoiled for choice with cutthroat competition between Alibaba, JD and PingDuoDuo in e-commerce and WeChat, Bytedance, Xiaohongshu and Bilibili in social media.

The US and EU are also likely to erect barriers to China’s EVs. This is unfortunate. The US car market has been highly distorted since the 1964 Chicken Tax – a 25% tariff on light trucks implemented to retaliate against European tariffs on US chicken. This has shifted marketing and engineering budgets to pickup trucks, which were once a niche product for farmers and construction crews.

BYD booth at the 2023 Bangkok International Motor Show. Chinese EVs are now the subject of a complaint filed with the World Trade Organization. Photo: Wikimedia Commons

Other bailouts like federal loans to Chrysler in 1979, “voluntary” import quotas on Japanese cars in the 1990s and the 2008 bailout of GM and Chrysler (again) does not suggest that barriers to Chinese car imports will lead to a more competitive Detroit (or even Tesla). It, in fact, suggests that the US will become more and more a Galapagos market of overpriced and uncompetitive pickup trucks.

Similarly, European carmakers, without a solid plan to match or exceed China’s EV producers, risk surviving on expensive and poorly performing nostalgia products – like mechanical Swiss watches – forced on a public pining for $20,000 EVs available in Morocco.      

China’s consumer paradise is strictly enforced by brutally influential customer ratings on e-commerce platforms. Yours truly once gave a boutique hotel perfect marks in all categories except one, which I rated four out of five stars. The proprietor called immediately, offering amends. The better half mistakenly scored a free portable phone battery after writing a negative review without realizing that she had not properly read the instructions. Oops.

Right now, China is clearly a buyer’s market. It might not last. But is this an indication of lackluster demand? Or has China unlocked heretofore unappreciated levels of productivity? Is the over-the-top service a sign of business desperation? Or has China upgraded the attitude and responsiveness of its workforce?

Is deflation or GDP growth being underestimated as product quality and services improve while prices stay the same – or are those one and the same? What China’s new consumer paradise says about the economy is probably in the eye of an economist’s biases. What it means for foodies, shoppers, travelers and gadget freaks is heaven on earth.