Ikea’s shopping malls business – one of the world’s largest – has kicked off the sales process for some 500 flats at its first-ever mixed-use retail and residential development, in Changsha, southern China.
Cindy Andersen, MD at Ingka Centres since February, said in an interview she expected flat buyers to start moving in during March next year, after the adjacent mall opened last month following pandemic-related delays.
Ingka Centres has 45 malls, or “meeting places” as it calls them following a strategy tweak a few years ago, anchored by Ikea furniture stores across Europe and Russia, and in China where they are branded Livat.
The company has shifted towards more entertainment and social spaces in its developments as consumers, in China in particular, increasingly shop online, visiting malls more for food or movies. Andersen told Reuters a third of tenants at the Livat Changsha mall were retailers currently.
With housing, it is testing yet another income leg, banking on the rapid urbanisation in China. Livat Changsha’s residential building, besides the flats, also sport common living and workspaces designed and decorated in co-operation with Ikea that it hopes will appeal to people working from home.
Andersen said the Livat Changsha mall – Ingka Centres’ fifth in China and its first development across markets to also offer housing – had around 95-per-cent occupancy in July, with tenants ranging from restaurants and sport and entertainment outlets to around 350 retailers including Decathlon and Uniqlo across 130,000sqm.
“I think we had a really relevant strategy even before the pandemic, and now the trends we saw already then have accelerated.”
She said that Ingka Centres, along with parent Ikea, still has great belief in a future of physical shopping, including in China, as long as it is tailored to consumer expectations around services, omnichannel and convenience.
“There is a need to include retail experiences in the meeting places also going forward. We have a lot of confidence this is a need for the consumer also in China,” she said, adding that Ingka Centres had added 50 international retail brands to its portfolio in China over the past year.
“I think it very much comes down to the fundamental needs of people. We like to be with other people and we like to be in environments where we can experience, where we can touch and feel,” she said.
Across markets, Ingka Centres is trying various omnichannel models and digital services at its malls with tests ranging from local e-commerce platforms to live shopping events.
At Livat Changsha – where it has invested more than US$616.8 million to date – the focus initially will be on a loyalty scheme app that is connected to Chinese social media WeChat, sporting services such as virtual reality centre navigation, online restaurant queuing and cinema ticket purchases.
Andersen said the program currently has around 2.3 million members in China, compared with 1.5 billion in May last year.
- Reporting by Anna Ringstrom, additional reporting by Sophie Yu in Beijing, of Reuters.