You walk into a restaurant and instantly you’re greeted by a long line to be seated. It’s not so bad though because the room is tastefully decorated, well lit, and has granite floors and marble counters. After about 15 to 20 minutes a hostess in her early 20s seats you at a booth with a beautifully stained hardwood table. You look around at your neighbors–they’re all young, affluent looking types wearing designer brands either on dates, or with colleagues, and of course the occasional impeccably-groomed mother treating her child to a fancy meal. You then look at the menu and everything looks delicious. For appetizers you can choose from such dishes as escargots, or sauteed scallops. Or perhaps you’d rather have a salad topped with imported lox and tropical fruits. Or maybe you want a soup; perhaps the lobster bisque? For an entree you could choose the angus steak sirloin, or maybe seafood linguine alfredo, or any number of spaghettis and many other Italian dishes. For dessert you could have the panna cotta, but at the same time, the tiramisu looks so good! If you were to guess that you were in some kind of European bistro, I wouldn’t blame you but that could not be further from the truth. In this case, you are sitting in a Pizza Hut in China.
Through a miracle of marketing and just plain good timing, Pizza Hut has established itself as a luxury brand in China and hey, more power to them! Throngs of the Chinese equivalent of yuppies, milfs, and cocks swarm into these stores to pay American prices for American food. While 2 USD will buy you a decent meal pretty much anywhere else in this country, you can’t even get a drink for that much here. KFC, McDonalds, Burger King, Starbucks… the list goes on. Unlike Pizza Hut, their storefronts remain similar to their American counterparts but like Pizza Hut, they’ve managed to get Chinese people paying American prices.
This phenomenon is hardly regulated to fast food. Chinese people will typically pay about a 10% surplus on western brands like Apple computers or Prada bags. In fact, they flock to the opportunity! Brands mean a lot in this world but I think it means more in a developing country like China. If you can afford to dress and eat like a first world citizen at above first world prices then there’s definitely a sense of pride to be had. It’s hedonistic capitalism at it’s finest (albeit in a “communist” state).
Out of this whole situation, what surprises me most is not the exorbitant prices people are willing to pay for status, it’s that most western brands have yet to capitalize on this invaluable opportunity! Where is Peet’s Coffee, and Dunkin’ Donuts; hell, Krispy Kreme could make a killing too! This is one country that is big enough for two sheriffs. And let’s not even get into the smoothie franchises… What gives? It’s not like it takes so much overhead to expand a franchise. When I was here in 2007, the only Starbuckses were concentrated in areas heavily frequented by foreigners. Now there’s one ever kilometer and they’re packed with Chinese people paying 22 RMB for a cup of coffee!
China’s not going to be a developing country for long–especially if they successfully unpeg their currency. The middle class is ever-growing and with it, average household income. As it stands, western brands make a killing but eventually, China will have success with brands of its own and if you’re an American company that missed its chance to gouge while you could, you can bet you’re gonna be sorry in the future. Opportunities like this don’t come knocking everyday.