Shoppers prop up U.S. business

Wrangler jeans, which in the United States are associated with cowboys and rodeos, are urban in China. A Wal-Mart opening is the social event of the year. Buicks are young and hip. And KFC and Pizza Hut are hot places for dates.

Coach, the upscale handbag brand, plans to add 50 shops in China within five years. Sports shoemaker Nike, which has 3,000 retail outlets in 300 Chinese cities, is expanding into smaller cities. And jeweler Tiffany recently opened stores in Chengdu, Tianjin, Shenyang and Qingdao, for a total of eight in mainland China, and hopes to continue opening four to five a year.

James Quinn, global president for New York-based Tiffany, said in an interview that Chinese customers are the “fastest-growing segment” of its business. “A lot of American customers have a complete wardrobe of jewelry, passed down from previous generations. That’s not the case in China. Chinese consumers are at the early stage of acquiring a sense of style and appreciation for design in jewelry.”

U.S. companies have been so successful in China because “Chinese consumers have a ‘look up to the rich’ attitude, and the United States is the world’s top developed country in their eyes,” said Gao Tao, a consultant for the International Brand Association in Beijing.

Take Wal-Mart, which has 215 stores in China and is expanding aggressively into smaller markets. The company said Thursday that in the first nine months of this year, net sales in its international division were up 16.5 percent compared with the same period last year, while in the United States they were up only 7.1 percent.

In the United States, most locations are big-box stores in the suburbs or in rural areas, but Wal-Marts in China are almost exclusively in downtowns. The food aisles are filled with everything from fresh squid and duck neck to kimchi-flavored potato chips.

Terrence Cullen, Wal-Mart’s vice president of development in China, said store openings — there were 30 last year — often feature dragon dances and fireworks, and attract thousands.

“It’s a big deal,” Cullen said. “Chinese really like brand names. And many people who may not have seen a Wal-Mart have heard of a Wal-Mart. So suddenly when they have a big brand name in their city, they have to go see what it’s like.”

The company that best epitomizes the realization of the American dream in China may be Yum! Brands. Faced with a declining consumer base at home, the Louisville, Ky., company sought a new market in China in 1987 when it opened its first KFC in Beijing. Now the company has more than 2,300 restaurants in mainland China and hopes to increase that to 20,000 in the long term.

A KFC store opens every day in China, and Pizza Hut has become the No. 1 casual dining restaurant.

Analysts say the secret to Pizza Hut’s success in China is its menu, which features such classics as pepperoni pizza as well as a mishmash of other international cuisine: garlic-drenched escargot, baked rice, wasabi-topped pizza.

In recent months, Pizza Hut has been promoting its afternoon tea service. For 25 to 35 yuan (US$3.70 to US$5.15), customers can choose one drink and one snack. There are seven types of coffee, six types of tea and a half-dozen other drinks, including waxberry juice. The sweets include a dozen varieties of cake, and the savory options include grilled meatballs, barbecue ribs and “pork in Italian style.”

Sitting down to her chocolate cake and chicken wings, Wang said she sees consumption as a liberation from the Mao-inspired conformity of her parents’ era.

“Many Chinese consumers spend,” she said, “because they are not as restricted as before.”

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