Bras have suddenly become a hot economic benchmark in China. All started with what Ren Zhiqiang, chairman of Huayuan Group and one of China’s best-known real estate tycoons, said during a business conference in Beijing in mid May.
When Yuyu, head of online retailer Dangdang, complained about China’s high housing prices during the conference, Ren replied by saying that even bras are more expensive than properties:
“A real estate project takes years to finish from planning to completion. How long does it take to make a piece of clothing? What’s more, something as small as a bra may cost several hundred yuan. If we go by price per square meter, [bras] are much more expensive than houses.”
Later, Ren revealed on his Weibo account (China’s Twitter) that the “bra theory” was originally from Feng Lun, another real estate tycoon in China and chairman of Vantone Holdings. In Feng’s calculation, a good bra costs about RMB 600 yuan, with a surface area of just 0.02 square meters, which means that bras cost about RMB 30,000 per square meter. That’s 7 times more than the average housing price in China’s 2nd and 3rd tier cities. If one also takes into consideration that bras are only good for a year or so while houses are good for at least 40 years, the real price of a bra is about 300 times higher than that of a house.
Ren’s argument and the “bra theory” drew tons of ridicule online. Many netizens asked: “Can I give your bras in exchange of a house?”
“I can give you 3 best bras. Can you give me just one of your smallest houses in exchange? A house of 100 square meters is about the size of 5,000 bras. Can I exchange 5,000 bras for a house from Mr. Ren?”
Others joked: “Try G-string, they are even more expensive by price per square meter.”
Ren’s words are insensitive, to say the least, during a time when almost everybody in China is complaining about high housing prices, and when even the government is trying very hard to curb rising housing prices. Like many netizens argued: “We can live without bras, but not without a house.” More importantly, “there are cheap bras, but there aren’t any cheap houses.”
To add to the “bra complexity,” Liang Haichen, vice general manager of China’s Shou Qi Group, said during Beijing’s Taxi fare public hearing that taxi fares in Bejing have to increase because the industry’s profit margin is too small. To give an example of industries that are enjoying massive profits, Liang said: “Taxi industry is making money, but not a lot. If talking about massive profits, look at some other industries such as watches, handbags, female lingerie. Look at real estate.”
In response, one netizen asked: “What’s wrong with bras? Bras are enjoying massive profits and it’s an industry that everyone can enter. But a taxi company isn’t something that everyone is allowed to open. If this manager feels so wronged, why not go ahead and start a bra business?”
While China’s real estate tycoons and taxi companies are filled with envy at bras makers’ massive profits, an actual bra maker, boss of Nanhaiweiye clothing factory in Guangdong province, stood out to clear bra’s name: “The profit of selling one bra is about RMB 1 yuan. The net profit margin is about 5% to 6%. How is that even close to the profit of the real estate industry?”
Anyway, lesson of the day is: don’t buy anything in China if it costs more per square meter than your bra.