Cheap produce and $60,000 bottles of cognac
September 10, 2014 § Leave a comment
This story was originally featured on American Public Media’s “Marketplace“
Fifteen minutes east of Marketplace’s Downtown Los Angeles studios is Hawaii Supermarket, a modest Chinese grocery store where one can buy eight pounds of watermelon for a dollar — or a bottle of cognac for $60,000.
You read that right. One bottle, at $60,000, is more than a lot of annual salaries.
But for Hawaii Supermarket’s wealthy shoppers from China, high-end liquor is its own kind of currency.
“Gift-giving is very important — fundamental, if you will — to most relationships in Chinese society,” says Sage Brennan, co-founder of the consulting group China Luxury Advisors.
Brennan says gift-giving is just part of doing business among the Chinese. But if you’re going to give a gift — say a French Bordeaux — it better be real.
“Otherwise, the fashion police will come get you,” Brennan explains.
However, since counterfeit booze is so rampant in China, getting ahold of authentic wine and spirits isn’t easy — which might explain why Moutai, a liquor that’s actually produced in China, is one of Hawaii Supermarket’s top sellers among Chinese visitors. Not only is high-end alcohol sold in America more likely to be genuine, but chances are it’s going to be cheaper, too.
“In terms of most luxury goods, you’re probably saving 40, 50, 70 percent just by shopping here in the U.S.,” says Brennan.
That’s because luxury goods in China face extremely high taxes. So Chinese consumers seeking the finer things in life know to buy abroad — which, in East Los Angeles County, means business for one humble Chinese grocery store.