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Six views on the Central Business District (CBD)
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Marketing Academy, August 13, 2005, author: Zhong Pengrong, editor:, send the article to Read on your mobile phone
In recent years, the central business district (hereinafter represented by the English abbreviation CBD) has become a hot topic in major and medium-sized cities in my country. At the recent CBD Forum held in Nanjing, the author was invited to speak at the conference and did some research on CBD. This article is some preliminary experience.
What is CBD?
From the existing research literature and the speeches at this conference, CBD has four levels of meaning:
First, CBD It is a spatial concept. The so-called central business district means that the business district is in the center of the city or in the center of many business districts.
Second, CBD is a business concept. The so-called central business district focuses on business clusters, that is, gathering places for various business relationships. A business relationship is a buying and selling relationship between businessmen. Bringing these businessmen with buying and selling relationships together will create a clustering effect.
Third, CBD is an architectural concept. That is to say, the houses here are the best built. Since it is located in the center of the city and the land is very expensive, the houses are also built the highest and the related facilities, including living facilities and business facilities, are also the most complete, so the housing prices are also relatively expensive.
Fourth, CBD is a service concept. In this area, not only the business hardware is relatively complete, but also various related institutions such as finance, investment, insurance, trade, logistics, information, legal and business consulting are gathered. Since various service agencies are relatively complete, companies do not need to handle a large number of things themselves. Companies in the CBD only need to concentrate on doing their own professional work, which not only saves effort, but also has a relatively high success rate.
Why is CBD so popular in China?
CBD has been very popular in China. Not only big cities such as Beijing, Shanghai and Guangzhou are building CBDs, but many medium-sized cities and even small cities are also building CBDs. Why is CBD so popular in China? I would like to use three sentences to summarize the reasons behind it, that is, real estate companies need themes, "Er Gouzi" needs brands, and local governments need to reshuffle their cards.
Real estate companies need themes. When speculating on real estate in China, various themes have always been used. For example, the real estate speculation in Beihai, Guangxi at that time was based on the theme of "the outlet of the southwest"; later, the theme of real estate speculation in many cities was business centers and logistics centers; now the concept of CBD is used, that is, this area will be the central business center of the entire city in the future. Although one square meter has now been sold for 15,000 yuan, it is not expensive and will continue to rise in the future. Each square meter will rise to 30,000 yuan. This is why Pan Shiyi’s Jianwai SoHo housing prices are getting higher and higher.
The so-called "ergouzi" need brands, that is, those big bosses and small bosses who have made a fortune need to buy a house in the central business district to show their success and nobility.
"Er Gouzi" needs a brand. This is what I said a few years ago when I analyzed why people need brands. Before the 1980s, "ergouzi" people all farmed in the countryside. After the reform and opening up, a group of "ergouzi" became rich and became multi-millionaires and billionaires. In order to distinguish themselves from those "ergouzi" who are still farming in the countryside, they have to smoke "Greater China" brand cigarettes, wear Swiss watches, and wear designer clothes. The more such "ergouzi" who have made a fortune, the greater the demand for famous brands in Chinese society as a whole. This is one of the reasons why society needs famous brands.
The reason why CBD is so popular now is first of all because of the demand. Without demand, Pan Shiyi could not raise the price of one square meter to tens of thousands, no matter how talented he was. According to Lao Pan himself, apart from the bosses from Zhejiang, the main buyers are from Shanxi. In recent years, coal prices have increased, and a number of coal tycoons have emerged in Shanxi. In the past, when Shanxi merchants made money, they would build large courtyards to show their nobility and success. Today's coal tycoons still want to build compounds. However, today's courtyards are not built in Shanxi, but in the CBDs of Beijing, Shanghai and other places. It is this huge demand that has created real estate stars such as Pan Shiyi.
The so-called local government needs to reshuffle refers to the fierce competition between cities and between different urban districts in the same city in attracting investment. The important means of competition is to compete for CBD. In a city, wherever the CBD is built, it means that this is the future business center, which means that the land price and housing price in this place are the highest. Regardless of business centers or high housing prices, local governments are the biggest beneficiaries.
In many cities, commercial centers have been formed in history, but historical commercial centers are not equal to today's business centers. Due to the development of urban scale and the arrival of the automobile society, the business centers of many cities have shifted.
Take Nanjing City as an example. The current commercial center and business center are all in the Xinjiekou area. In recent years, the Nanjing Municipal Government is planning to build Nanjing's CBD in Hexi District.
The implementation of this plan means that Nanjing's business center will gradually shift to Hexi, and Jianye District will become the biggest beneficiary of this transfer.
What can CBD provide merchants
The reason why powerful companies are willing to enter CBD is because CBD can bring them both nominal and real benefits.
Let’s look at the name first. Staying in the CBD can enhance the brand value of the company. Because CBD has the most expensive housing prices and the best office environment, a company operating in the CBD means that the company has certain strength. Especially for companies such as accounting firms, law firms, and consulting companies, since there are no physical assets such as factories and equipment, no tangible products and brands related to these products, the office location itself is the company's image and brand. important component. In fact, accounting firms and law firms operating in the CBD are better able to accept orders, especially large orders.
Look at the reality again. The actual benefits brought to businesses by moving into the CBD are mainly in two aspects:
First, it can bring about a cluster effect. As the saying goes, birds of a feather flock together. In the CBD, people of the same kind gather together. The so-called similar people are companies that are related to each other in business, or companies that are comparable in size and strength. Due to the in-depth exchanges between the personnel of these companies, many new business opportunities will arise.
Second, people living in the CBD can enjoy better business services and life services, thus improving business efficiency.
The core value of CBD lies in business clusters
To understand business clusters, we must first start with industrial clusters. In China, a very typical city with industrial clusters is Shaoxing, Zhejiang. In Shaoxing, there are thousands of textile companies. They all revolve around one industry, weaving. Nearly 4 billion meters of cloth are woven every year. There is a very fine division of labor between each other. Some specialize in weaving, some specialize in spinning, some specialize in printing and dyeing, some specialize in selling cloth, some specialize in pattern design, and some specialize in the production of textile machinery. In this kind of industrial cluster, due to division of labor and cooperation, each enterprise is very specialized and can form core competitiveness as soon as possible. The same product is the sum of the core competitiveness of many enterprises, and the entire cluster will form a global core competitiveness.
If Shaoxing is a typical industrial cluster in China, then Yiwu is a typical commercial cluster in China. In Yiwu, there are hundreds of thousands of people engaged in business. They bring the best small commodities in China to Yiwu, making Yiwu the largest small commodity market in the world. There are five to six thousand foreign wholesalers from all over the world every day. They buy more than 30 billion yuan of small commodities from here every year.
Of course, Beijing’s Wangfujing and Xidan are also business clusters. A variety of retail businesses are concentrated here. It is this kind of cluster that attracts tourists and customers from Beijing and even across the country to visit and shop here.
Different from industrial clusters and business clusters, CBD should be a business cluster.
The so-called business cluster is neither a concentration of factories nor a concentration of goods, but a concentration of people. It means that similar companies and people are brought together. Through concentration, they are brought into contact with each other and have in-depth exchanges, thus creating new products. ideas and create new business relationships.
The so-called people gather together, there are two ways of gathering: one is to gather the richest people together, the largest companies together; the other is to gather the business-related ones. together.
Just by bringing the richest people together, division of labor and collaboration may not necessarily form between them. Just like many city residents who live in the same compound or even on the same building, they have not had any contact with each other for decades. This kind of aggregation, CBD only brings brand benefits to the companies staying there, but cannot bring benefits in terms of division of labor and collaboration.
In recent years, many cities in our country have opened development zones. Mayors, secretaries and all cadres have gone out to recruit investors. They recruit anyone who has money, regardless of whether they are related to the industry. As a result, a considerable number of companies will collapse within a few years.
Guangzhou Huadu District is different. They have a very strong investment target, that is, they mainly attract leather goods manufacturing companies and commercial companies. After attracting investment, a leather industry cluster was quickly formed in Huadu.
The future world competition will not be an individual battle between enterprises, but a team competition between clusters. CBD is no exception. We should strive to build the CBD into a business cluster for a certain type of industry or a certain type of economic activity. This kind of business cluster can make CBD have lasting vitality through its cluster effect.
If the gathering of people in the CBD is divided into two types: A and B, A means gathering the richest people and the largest companies in the CBD, and B means gathering companies and people who are related to each other in business. The two types of aggregation have the following four differences:
Type A aggregation is fast, while type B aggregation requires a process.
After a period of time in Class A agglomeration, quite a few companies will withdraw from the CBD because they find that there are not many agglomeration benefits here, but they have to pay higher business costs. They found that working in the CBD is no different from working in office buildings in other places. For office buildings in other areas, property costs are much lower and transportation is much more convenient.
Type B agglomeration can help the city form core competitiveness as soon as possible; type A agglomeration can only bring about a temporary improvement in the city's image.
Type B agglomeration can bring about industrial clusters and business clusters around the city through CBD business clusters, thereby forming mutual promotion between business clusters, industrial clusters and business clusters; Type A agglomeration can only promote the city The rise in house prices.
5. The development of CBD should take the path of diversification and decentralization
The concept of CBD was introduced from developed countries such as the United States. The most typical CBD in the United States was formed in the transportation background, communication background and urban development background of the 19th and 20th centuries.
Today in the 21st century, when we plan for CBD, we must consider the following major background changes:
1. The Internet allows interpersonal information exchange to be unrestricted by space;< /p>
2. The development of modern transportation and the emergence of automobile society have changed the concept of distance. In Beijing, I would rather walk the 10 kilometers of the 5th Ring Road than the 10 meters of the 2nd Ring Road. Not to mention in Xidan and Wangfujing, even in the Guomao area, it may take more than half an hour to walk 10 meters at peak times.
3. As the city expands and traffic volume increases, traffic congestion in the city center will become more and more serious.
4. Convenient travel and fresh air will be important indicators of urban people’s work efficiency and quality of life.
Because of the above four aspects, if the CBD is still located in the city center and in a bustling downtown, the business costs of companies operating in the CBD will become increasingly higher. Its business costs include:
1. High office building costs;
2. High housing costs for employees to live near the CBD, which will eventually be converted into the company's labor costs;
3. The time cost of commuting and entering and leaving work due to traffic jams;
4. The health cost of bosses and employees due to environmental pollution. Traffic congestion around the CBD and dense buildings in the CBD have led to a reduction in the greening rate and an increase in floor area ratio. A large amount of air conditioning and car exhaust have caused a decrease in air quality. The glass walls of the building refract each other, causing light pollution. All of these will affect the health of bosses and employees in the CBD.
Therefore, in the planning of CBD, the thinking of the traditional economy should be replaced by the thinking of the network economy, and the thinking of the walking era or the horse-drawn carriage era should be replaced by the thinking of the automobile society. If we still use traditional thinking, especially the thinking of real estate development only, to plan the future CBD, we are likely to leave a pile of high-grade urban garbage for the future metropolis.
With the advent of the Internet economy and the automobile age, many large companies in developed countries such as the United States have moved their headquarters from the city center to the suburbs. For example: Microsoft is headquartered in Redmond, Washington, Mobil Oil is headquartered in Irving, Texas, Kodak is headquartered in Rochester, New York, and Wal-Mart is headquartered in Bentonville, Arkansas. IBM's headquarters is in White Plains, New York. I believe that the future business district will be diversified and decentralized.
The success or failure of the CBD lies in whether the incremental benefits brought to the enterprise are greater than the incremental costs
Companies entering the CBD office hope to gain more benefits than working in other business districts. More benefits, this is the incremental benefit that CBD brings to the company. However, due to the above four factors, there will also be cost increases for companies entering the CBD. It should be noted that this cost increase will continue to rise. Because, with the increase in urban car ownership, especially as the white-collar car ownership rate in the CBD increases, the time cost and health cost caused by traffic congestion will continue to rise. When the incremental benefit from entering the CBD is less than the incremental cost, people will evacuate the CBD one after another and shift their company offices to the suburbs with beautiful environment and convenient transportation. Therefore, from a large-scale perspective, in the short term, metropolitan cities such as Beijing and Shanghai are the best locations for CBD; in the long term, medium-sized coastal cities such as Xiamen, Qingdao, and Dalian will be better choices for CBD.
From a small space perspective, in the short term, bustling downtowns and city centers are the best locations for CBD; in the long term, urban-suburban fringes and even outer suburbs with beautiful environments and convenient transportation will be better choices for CBD.
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