Bigger Means Better: Chinese Shoppers Love Massive Malls

IMG_1055

A giant LED screen at Beijing’s The Place shopping center. (Jing Daily)

Brands looking for their next China store location may want to opt for a spot in a mega-mall rather than on a busy shopping street, according to the results of a new CBRE survey on Asia-Pacific consumers’ shopping habits.

For a recently released report, the commercial real estate firm questioned over 11,000 consumers in 11 major countries across the Asia-Pacific region about where they like to shop. Across the region, affordability, cleanliness, and security were the most valued factors in a shopping center for all age groups. “The key message from consumers is clear—landlords and developers need to get the basics right,” said Jonathan Hsu, the director of CBRE Research for Asia Pacific.

Retail

The report also found some key differences in consumer preferences across different countries. In Greater China, which includes Hong Kong, Taiwan, and the mainland, large shopping centers are a favorite venue. A  total of 66 percent of respondents said they prefer to shop in a large shopping center with at least 50 stores, while 22 percent opted for a small shopping center and only 12 percent chose street shopping. In a related trend, respondents from Greater China also demonstrated high demand for a well-rounded shopping experience that includes a mix of both retail and food and beverage options.

While Chinese consumers like to visit big malls, they don’t want the shops inside to be small: the report found that “bigger means better” in the Greater China region, and that consumers prefer to visit large shops and flagship locations.

China’s mall building boom means that respondents from Greater China said they’d seen more improvements in their shopping experiences than those from other areas such as North Asia and the Pacific. The top improvements Chinese consumers have observed are better catering facilities, renovation, expansion, and the addition of more international brands. The report also states that this trend coincides with the growth of “retailtainment” such as as special events in shopping centers as they compete with one another for foot traffic.

Malls aren’t just competing with each other in Asian cities, however. They have another major competitor that will pose an increasingly large challenge: e-commerce. “Whilst the outlook for the bricks-and-mortar format remains upbeat, shopping center operators must be alert to the challenges posed by online retail,” says CBRE Head of Retailer Representation Joel Stephen. “Eighty percent of survey respondents said they would continue to shop as often or more in a physical store, however, 85 percent said they would also shop online, half of which said they will shop even more online in the future than they do now. The use of online shopping is increasing rapidly across Asia Pacific and retail landlords will have to integrate this platform into their overall strategy to remain competitive and, ultimately, to survive.”

The report notes several key ways in which shopping centers can remain competitive in this challenging environment. “Shopping center landlords must focus on understanding emerging retail trends, technology, and consumer behavior. Landlords will have to develop fresh and innovative ways to understand and reach their audience in order to counter the growth of the online retail market,” says Sebastian Skiff, CBRE’s executive director of retail services for Asia. First, they should embrace big data by utilizing social media platforms to track “likes” and “check-ins” in order to formulate a tailored marketing strategy. They can also create engaging shopping center apps featuring special offers and contests in order to boost user engagement. In addition to these high-tech features, shopping centers can’t forget one basic factor, according to the report: a focus on building their brand to maintain customer loyalty.

 

Categories

Fashion, Investment & Real Estate