Shanghai, which is building itself into an international consumer center city, boasts a lot of attention-grabbing labels: it is the city with the largest number of internationally renowned brands, the city with the largest number of time-honored enterprises, and the city with the highest quality live broadcasting. Nowadays, such open, innovative and inclusive city has a more and more outstanding new label - the first city of new brands.

Data from different platforms and organizations indicate this new label coincidentally. The New Brand Entrepreneurship Map released by Tmall last year reveals that among the 500 new domestic brands most favored by consumers, 90 brands are from Shanghai, ranking first in the cities of China; new brands registered in Shanghai contribute to nearly one-sixth of the national brand sales.

Whether it is the place of origin, sales, or the speed of absorbing consumers, Shanghai as the “first city of new brands” can be well-deserved. Highland of consumption, highland of entrepreneurship, trend property, business environment... the sum of each advantage will pave the way for a large number of new brands in Shanghai to take root and thrive.

Opening up a new world from a window of opportunity

A large number of startups are stationed in a shared office space converted from a residential building along Lixi Road in Changning District, where the new consumer brand “HowBottle” is based. As its name suggests, it starts with eco-friendly plastics and ends up with backpacks, clothes and other goods.

“When we started in 2017, what we were making was a niche product, and there were few entrepreneurs in this track.” According to Lun Jiayu, HowBottle co-founder and COO, since there are no benchmarks to compare it with, everything has to be figured out on its own: What is an environmentally sustainable product? Who is the target audience? How does supply chain management get started? It wasn't until a few years later that the new Shanghai-based brand with a distinct identity finally defined its own tone - a sustainable fashion and lifestyle brand. At that time, it was already a strong performer in the market segment.

Looking at the new brands that have broken ground in Shanghai in the past five years, the most important feature is to open up a “new world” from a window of opportunity and to compete at the forefront of the segmented track.

According to the RHINO data, 65% of the investment and financing events of new consumer brands in the past three years were distributed in five major cities, including Shanghai, Beijing and Shenzhen, with Shanghai's new consumer brands accounting for 20% of the total, especially in the tracks of beauty and food, which are ranked first.

New brands are complementary to the city's DNA

Just like the nature of New York, the avant-garde of London, the fashion of Paris, the tone and genes of any consumer brand are particularly dependent on the soil environment in which they grow. Why Shanghai can become the “first city of new brands”? From this round of new brand growth in Shanghai, we can see the soft power of its urban functions and environmental supply.

As a consumption highland, Shanghai has been planning to hold the “May 5 Shopping Festival” since last year. In the view of Lao Guoling, director of the E-commerce Research Center of Shanghai University of Finance and Economics, the second “May 5 Shopping Festival” of this year has done a great job on the word "new", focusing on the unveiling economy to create new momentum for business development. It provides an excellent stage for the growth of a number of new consumer brands. The data shows that within two months, more than 150 internationally renowned brands and more than 450 leading local brands released and displayed nearly 3,000 new seasonal products.

“At a deeper level, Shanghai is favored by new consumer brands owing to its excellent genes.” Liu Gongrun, deputy director of the CEIBS Lujiazui Institute of International Finance, believes that Shanghai itself is the premier consumer center city, with a rich consumer market, diverse scenes and leading fashion consumption trends. It is the most suitable city for new consumer brands to start businesses. “In other words, Shanghai's demand for new consumption gives new consumer brands a soil for rapid growth.”

Advancing the construction of an international consumer center city

With its traditional advantages and urban temperament in nurturing new consumer brands, Shanghai also plays an important role in promoting brand support, industrial chain development and talent gathering based on its top-down design.

At the end of July, the Three-Year Action Plan (2021-2023) to Accelerate the Construction of an International Consumer Center City by Fully Launching the "Shanghai Shopping" Brand was released, less than half a month after the State Council approved Shanghai to take the lead in cultivating and building an international consumer center city. In the “three-year action plan”, the “special action for upgrading brand economy” is clearly defined for the first time, which will “promote the expansion of sales of locally made consumer goods brands, and enhance the influence and reputation of local brands”.

It is easy to see that Shanghai has incorporated the cultivation of new consumer brands into the ecology of “Shanghai Shopping”, played the role of a testing ground for new business forms and new models, helped new brands to find a foothold, and continued to inject fresh blood into the cultivation of an international consumer center city.

“The rise of new consumer brands in Shanghai is of great significance for building Shanghai into an international consumer center.” Liu Gongrun said that new consumption is a powerful driving force to boost the new economy and achieve new growth, and new consumer brands are an important reflection of the transformation and upgrading of consumption, representing the consumption fashion and consumption preference of young people in the new era. “The international consumption center city is bound to be a city that leads the consumption trend and rejuvenates the vitality. In this regard, as the capital of fashion innovation and the 'first city of new brands', Shanghai is well-deserved”.

By: Jinghui, Wenhui Bao