Hong Kong’s Lan Kwai Fong Expands in Southern China’s Guangzhou

Lan Kwai Fong Holdings Ltd., developer of Hong Kong’s iconic stretch of bars and restaurants, will expand in southern China’s Guangzhou to tap growing domestic consumption.

As many as 70 bars and restaurants will be opened in a 1.6 million square feet shopping mall in the southern Chinese city later this year, Lan Kwai Fong Chairman Allan Zeman said in a Jan. 10 interview in Hong Kong, without giving an investment amount. The “Mall of the World” project will be a joint venture with the government and have 400 shops.

Consumption of bottled white spirits has increased at a compound annual growth rate of 20 percent in the past five years, according to China’s government. Retailers including LVMH Moet Hennessy Louis Vuitton SA and Salvatore Ferragamo SpA are seeing rising Chinese sales and some are planning expansions in the world’s fastest-growing major economy.

“Consumer spending is huge in China, it’s absolutely amazing,” Zeman said. Tea houses and hot-pot restaurants were opened for the company’s Chengdu expansion to cater to Chinese tastes, and a similar plan will be adopted for Guangzhou, he said.

“If you want to do well in China, you have to fit in with the culture,” said Zeman, who is studying a third expansion in Hangzhou in the eastern Chinese province of Zhejiang.

Retail sales in China grew an average of 18.4 percent in the first eleven months last year.

Lan Kwai Fong in Hong Kong’s central business district contains more than 100 restaurants and bars, including Club 97, Volar and Zinc. A two-year redevelopment plan of the stretch, which includes building a 28-story block designed with terraces every floor for smokers who are banned from lighting up indoors, is expected to be completed by 2013, Zeman said.

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