Shanghai eyes long-term retail transformation by boosting 'first-store economy'

With an average of three new "first stores" opening every day, Shanghai's retail market is gaining momentum. From Parisian luxury houses to cult Japanese labels and niche European designers, the city has become a magnet for first stores, each vying for a slice of China's US$400 billion luxury and fashion market.

Last Sunday the city unveiled the Measures to Further Promote the High-Quality Development of Shanghai's Debut (first store/launch) Economy, including a one-time reward of 1.2 million yuan (US$165,886) for brands opening Asian or higher-level flagship stores from March to May.

As a matter of fact, the city has cemented its position as the go-to city for global brands making their China debut.

In 2024 alone, Shanghai saw 1,269 new first stores, with high-impact flagship stores accounting for 17 percent, signaling both retail innovation and a rebound in consumer confidence.

Jing'an and Huangpu districts have emerged as prime battlegrounds for brands. Between 2019 and 2023, Jing'an welcomed 952 first stores, with 234 more added in 2024.

Among Shanghai's many retail hubs, Nanjing Road West has cemented itself as the top destination for first-store openings, with its status as a high-end fashion and lifestyle district.

From 2021 to 2023, the road introduced 352 new first stores, including seven global debuts and seven Asia-first locations.

For many brands, securing a presence in Shanghai is no longer just about entering the Chinese market – it's about leveraging the city's retail ecosystem for long-term growth. But behind this wave of first-store openings, there is more than just market demand.

It is also backed by strong policy support. The city government has introduced a series of initiatives to stimulate consumption and actively promote the development of the "first-launch economy."

"We have made the first-launch/store economy a top priority and mobilized districts to develop global product launch hubs with tailored support policies," said Liu Min, Deputy Director of the Shanghai Municipal Commission of Commerce. "We will focus on strengthening the foundation for first-store growth. By enabling businesses to introduce more innovative products and explore new business formats, we aim to drive long-term retail transformation."

Since this year, a steady of "fist stores" have settled in Shanghai. The largest Asian flagship store of Spanish luxury brand Loewe has opened at Jing'an Kerry Centre, while Italian luxury home brand Visionnaire has chosen Wuyi Road for its first store in China.

At the same time, a series of notable first stores are set to debut in Shanghai, including the global flagship of French sportswear brand HOKA, and the only Asian pop-up store of French luxury brand Goyard. Prada will also offer dining space for the first time in China at Shanghai's Rong Zhai.

"The global economy is going through a slowdown, but that also means opportunity. If your designs stand out and your pricing is competitive, now is a great time for contemporary luxury brands to enter," said Zoe Wang, creative director of ZONA20 MILANO, an Italian fashion brand that has just launched its first-ever retail store in China at Galeries Lafayette, in Pudong New Area, Shanghai.

"As an Italian brand that has been focused on the European market, choosing Galeries Lafayette as our first offline retail location in China is a natural fit. It serves as strong brand positioning for us, not only in China but internationally," she said. "We also have plans to open a second store in the Nanjing West Road commercial district later this year. So let's stay tuned."