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Exclusive | Qiandama’s funder GenBridge sees ‘substitution’ in China’s retail downgrade, tepid growth
- GenBridge Capital founder Robert Chang, whose investments include the grocer Qiandama, says this trend presents ‘an unexpected opportunity’ for Chinese brands.
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Wency Chenin Shanghai
Mainland China’s consumer sector has proven to be resilient amid the slings and arrows of outrageous fortune – including the property crisis, elevated unemployment and weak consumption – as people switch their spending to more affordable goods in an economy where being frugal counts, according to venture capitalist Robert Chang Bin.
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“This is what I call the substitution effect,” Chang, founder and managing partner of Beijing-based VC firm GenBridge Capital, told the South China Morning Post in a recent interview. GenBridge’s investments include the grocery chain Qiandama.
“When people opt out of a major purchase like real estate, which involves millions of yuan, they redirect their spending towards other categories – from hundreds of thousands on cars to tens of thousands on furniture, down to thousands on travel and hundreds on clothing,” Chang said. “For Chinese consumer brands, this presents an unexpected opportunity.”
His view reflects how the world’s second-largest economy continues to perform well below expectations, as it posted 4.7 per cent growth in the second quarter after recording 5.3 per cent growth in the first quarter.
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