Massive opportunity for China retail investment
China retail is “rife with opportunity” for retail and property investment according to a new report released at China Mall 2020.
Taubman Asia, a subsidiary of US mall REIT Taubman Centers, and Mingtiandi, China’s leading source of retail intelligence, released at the Hong Kong China Mall 2020 conference today a white paper with industry-leading insights on the future of China’s retail sector. The report analyses the challenges and opportunities for retail in the world’s second largest economy and provides a holistic overview and insights on the swift growth and dynamics of Chinese consumer behaviors over the past 15 years.
“China is uniquely positioned to build a modern, connected, and relevant retail real estate sector by 2020,” said Michael Cole, executive editor of Mingtiandi, and managing researcher for China Mall 2020.
“China’s malls of the future will be those that embrace powerful new technological capacities made for digital marketing and incorporate smart design elements to meet increasing consumer and retailer needs – differentiating the retail experience.”
Specifically, the report discusses several key drivers that will inform the future development and success of Chinese malls, including:
- Shopping center designs will need to be rethought to accommodate shoppers looking for cultural and social experiences as much as for visitors looking to tick items off their shopping lists;
- Integration of digitally-enabled strategies, such as online-to-offline (O2O) and big-data level resources will be needed to bring management of offline retail on par with online competitors;
- Adoption of mobile technologies, to meet consumer demand for on-the-go research in stores, will be needed to keep in tune with a market of mobile-connected shoppers; and
- Mall development, including innovative leading strategies that bring together the right mix of retailers at a pace that matches the increasing urbanisation of China and is able to anticipate the evolving needs and expectations of the Chinese consumer.
René Tremblay, president of Taubman Asia, said the company has always been optimistic about the growth and untapped potential of the China market, “and we were encouraged to see the results of Mingtiandi’s independent research affirm this view”.
“We believe the industry is undergoing its first stage of evolution, and we are well placed to lead the development of this next generation of malls in China – leveraging our 65 years of international development and design experience, as well as our robust local team.”
He said that while media reports often focus on how the macro environment has played a key role for a shopping slowdown sweeping the country, China Mall 2020 forecasts the sustainable growth of Chinese consumption, and suggests the cause of the retail sector’s struggles might lie more on bullish planning and early optimism of some retailers.
Similarly, while addressing the threats of an online retailing boom, the in-depth study showcases how traditional retailers and mall developers are on their way to fine-tune their marketing strategies, leveraging new technologies to drive more business.
Guohua Zhang, China MD of Taubman Asia said the retail scene in China is becoming increasingly sophisticated.
“Instead of viewing external forces as threats, many malls in China are utilising a powerful mix of digitally enabled strategies that leverage mobile, social platforms and big data together with traditional marketing approaches. These kinds of innovations are critical to our approach for the market.”
China Mall 2020 also analyses how the unique social context in China has evolved shopping malls from a shopping oriented destination to a public space cultivating social and cultural experience for the Chinese population.
The full report is now available for download on the Taubman Asia China Mall 2020 website. Taubman Asia, the sponsor of the project, is an active leader in retail real estate in the region. Its portfolio in China includes two CityOn lifestyle projects underway in Xi’an and Zhengzhou and The Boulevard at Studio City in Macau, which will open in October 2015. The company also owns Hanam Union Square in Greater Seoul, opening late 2016, and manages operations for the IFC Mall in Seoul which opened in August 2012.