Shanghai downtown bonded warehouses fuel global brand attraction

Shanghai has attracted top-tier international brands, driven by innovative downtown bonded warehouses that have streamlined their entry into the Chinese market since November 2024.

Located in central business districts, including Jing'an and Huangpu, these warehouses offer international brands a new way to showcase and sell products in China. They allow goods to be displayed and sold under bond, with taxation deferred until the point of sale.

According to an official with the Jing'an District Commission of Commerce, the new model significantly reduces capital costs and market risks, encouraging more international brands to bring flagship exhibits to Shanghai. These customs-supervised facilities allow imported goods to be stored without immediate payment of duties, value-added tax, or consumption tax.

Luxury brands have been quick to adopt the system. Piaget, for instance, recently staged an immersive exhibition at Zhangyuan, a commercial hub transformed a residential complex featuring Shanghai's traditional shikumen houses in downtown Jing'an district, featuring high-end jewelry and watches, including collector's pieces debuting on the Chinese mainland, alongside a limited-time boutique.

Consumers can now purchase bonded goods in the time it takes to have a cup of coffee, compared with the days or even months previously required, said Zheng Qisong, general manager of Shanghai Anji Bonded Goods Service Co Ltd.

Since the Zhangyuan bonded warehouse began operating in November 2024, it has hosted 14 inaugural exhibitions by international brands, involving goods valued at over 100 million yuan ($14.35 million).

These warehouses are equipped with advanced security measures and precise climate control under customs supervision, according to the head of the Zhangyuan bonded warehouse.

Gong Lifeng, head of the Italian jewelry trader Vetiver, noted that goods can now be transported directly to the Donghao Lansheng bonded warehouse ahead of the China International Import Expo, cutting transit time from half a day to just 35 minutes.

Since July 2024, with the support from the General Administration of Customs, the bonded display and trade functions of Zhangyuan bonded warehouse have been extended to Louis Vuitton, Givenchy, and Loewe stores.