If your business is looking to open its first store in China, this may be the perfect time to do it. Last March, the Beijing Municipal Commerce Bureau, together with nine other government bureaus of Beijing, announced the continuation of financial support measures to further develop their First-Store and First-Launch economies.
According to the Beijing government, more than 3,000 first stores representing domestic and foreign brands are expected to open locally by 2025. Their objective is to turn the Chinese capital into an international consumption center.
The 2022 Measures state that companies which set up their first store in Beijing and companies who hold new product launch events of famous brands can get fiscal support of up to RMB 5 million (US$784,000) and RMB 2 million (US$313,600), respectively.
In 2021, a total of 901 first stores -five times more than 2020- were opened in Beijing, corresponding to data released by the Beijing Municipal Commerce Bureau.
Among them, 134 were international brands from 23 countries and regions. These include 29 American brands, 21 Italian, 18 French, and 18 Japanese. A few examples are – Italian sportswear brand FILA, the Manchester United Theater of Dreams, French jewelers SATELLITE PARIS, and German optical tech giant Leica.
China's local brands had a strong presence. Among the first stores opened in Beijing, 767 were domestic brands, accounting for 85%.
In terms of services provided, first stores in the catering industry ranked first, with a total of 468, the equivalent of 52%. There were 276 in the retail industry, and 75, 52, and 24 first stores that deal in leisure and entertainment, personal care and services, and children-related business, respectively.
This is not the first time that Beijing releases first-store support policies, however the 2022 Measures are the first jointly document released by multiple bureaus – the commerce bureau, Beijing Customs, Beijing Public Security Bureau, and Beijing Administration for Market Regulation, among others. The 2022 Measures provide more concrete standards for businesses to apply for the fiscal supports.
The so-called “first-store economy” is a type of real economy measured by the launch of leading industrial and fashion brands that open their initial brick-and-mortar shop in specific areas. The definition also includes the launch of traditional brands’ flagship or experiential stores that operate under an innovative model.
The following types are included in the definition:
A brand’s first store in Asia;
A brand’s first store in mainland China;
A brand’s first store in Beijing;
A brand’s flagship store in Beijing; and
A brand’s innovative concept store in Beijing.
Since Beijing rolled out its ambitious plan to transform the capital into an international consumption center, the city has been renovating its shopping malls, developing a first-store economy, and introducing business outlets that offer residents more convenience. This program has become a new driver of local consumption.
The initiative offers eight measures in four aspects, including building a service system for brands to set up first stores or debut products, supporting the development of first stores, building a platform for new product launch event of brands, and supporting the development of headquarters of brands.
Companies which open first stores of domestic and foreign brands in Beijing, can access a certain amount of financial support. However, there are a few conditions such as the enterprise needs to be an independent legal personality in Beijing; the total of rent and storefront decoration paid exceeds RMB 500,000 (US$78,400); and the store has stable performance and good growth potential, with an annual revenue of more than RMB 2 million (US$313,600).
The maximum amount of financial support varies depending on the type of shop and sector: retail enterprises can get up to 50 percent of their actual investment amount, while catering enterprises can get up to 20 percent of their actual investment amount, subject to a ceiling of RMB 500,000 (US$78,400).
Companies holding a new product launch event in Beijing can get 50 percent of their total expenses for venue leasing, exhibition booth construction, and event promotion; RMB 2 million for new product launch events of fashion consumer products such as cosmetics, watches, bags, gold and silver jewelry, and others, and RMB 1 million for other consumer brands.
One of the main conditions is that the brand should be well-known in China and abroad.
Other steps are also geared to further support this initiative. To cut administrative red tape and optimize services, the 2022 Measures propose to develop green channels for site selection, fire prevention certificate application, advertising plaque setting, and trademark registration. First stores may enjoy the privilege of holding promotions without pre-approval from authorities.
In addition, the measures offer to plan and organize a Beijing Launch Festival and build an all-media platform to promote first stores newly settled in Beijing.
To apply for financial support, companies must follow the guidelines published by the Beijing Municipal Commerce Bureau, which stipulate the materials required, the application procedures, and the application deadline.
Enterprises, institutions, and economic organizations registered in Beijing with independent legal personality, engaged in the operation, service and management of the circulation of commerce and trade can apply for financial support as long as their projects meet the necessary requirements.
The applicant must commit to operate for no less than one year from the date of obtaining financial funds. If the projects supported by financial funds are demolished, suspended, or get their business licenses revoked within one year, the corresponding financial funds shall be returned.
Companies interested in entering the Chinese market are advised to take full advantage of this pro-business policy.
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