As the gigantic Shanghai Disney Resort gets ready to launch on June 16, Pirates of the Caribbean, Star Wars, and Toy Story-themed attractions and Disney’s largest castle will likely draw many children, but the major attraction for Chinese parents will be nearby—luxury outlet shopping.
Located in the new 24.7-square-kilometer Shanghai International Tourism and Resorts Zone (SITRZ) across from the Disney resort at the end of the site’s manmade “Wishing Star Lake” is the second mainland China location for upscale European outlet company Value Retail, which is slated to open ahead of Disney on May 19. At 55,000 square meters with 140 boutiques, Shanghai Village will feature elaborate Art Deco-style architecture modeled after buildings in Paris, Milan, New York, Vienna, and Shanghai. The new location aims to be a destination in itself rather than an afterthought to the theme park thanks to the importance Chinese travelers place on shopping during their trips.
Launched after Value Retail’s first mainland China location in Suzhou, Shanghai Village has many lifestyle features aimed at catering to Chinese demand for “shopping tourism”—a newly defined concept named by the UNWTO in the wake of China’s outbound travel boom.
Although this will be Value Retail’s second global location near a Disney park—the other being the La Vallée Village near Disneyland Paris—it is unique in several key ways. “There will be a difference in scale and architecture in the sense that Shanghai Disney Resort is one of the largest destinations that Disney has ever built,” says Value Retail Management CEO Desirée Bollier. “Shanghai Village is the same: it is our largest investment to date.”
In addition, the village is run by a joint venture between Value Retail and Shanghai Shendi Group, the state-owned enterprise that was set up to manage the entire SITRZ, including the Disney Resort. As a growing number of Chinese tourists head abroad—especially to avoid China’s tariffs on imported goods—the Chinese government has been working to develop tourism zones with attractions and shopping to keep spending within the mainland.
“I think the government is moving to a consumer-led economy, and will want Chinese to spend money in China,” says Bollier. “They are looking at various ways to encourage Chinese to view China as a resort destination: hence the development of Hainan as a tourism destination, hence the development of SITRZ as an entertainment destination, hence investment in cinemas, IMAX, and major theaters. It’s a logical transformation in the Chinese economy.”
Although Hainan’s tourism development includes a duty-free shopping zone with the world’s largest duty-free mall, the SITRZ is currently not duty-free. According to Bollier, Shanghai Village will be following Value Retail’s usual model of offering goods at a minimum of 33 percent off and an average of 40 percent off the full domestic price. “Once SITRZ is designated as a duty-free zone, if indeed it is, it would potentially be a huge benefit to our brands in the way that they structure their China retail operations, but at this point that’s rather speculative,” she says.
While Value Retail’s Europe locations cater to a diverse group of international tourists (especially Chinese tourists—its Bicester Village is said to be one of the UK’s top tourism destinations for Chinese visitors), the company’s China locations are unique in the fact that their customer base is expected to be almost exclusively domestic. Over 45 percent of the Paris Disney location’s customers are international visitors, but Bollier states that she expects “predominantly domestic Chinese visitation” at the new Shanghai site.
Value Retail is opening the location at a time when many Chinese luxury consumers are becoming more discerning and malls across the country are adding more lifestyle activities. The company’s locations are targeted mainly at upper-middle class and affluent consumers, and place a heavy emphasis on the quality of the shopping environment. The Shanghai Village will offer “retailtainment” activities such as dining and exhibitions, including added touches such as outdoor cafe seating overlooking the lake, ferry rides to and from the Disney park, and streets named after famous historical figures in the Art Deco movement in Mandarin and French. Special VIP services including hands-free shopping, valet parking, concierge services, private lounges, and meeting spaces will also be added.
As many Chinese consumers become more individualistic and seek out niche brands, Shanghai Village will include not only brands from Value Retail’s usual portfolio found at its 10 global locations, but also a higher number of niche labels and boutiques by Chinese designers. While the brands on board have not been officially announced yet, the company says that half of the boutiques have been confirmed and have strong overlap with existing Value Retail locations. Brands available at the nearby Suzhou Village location include Armani, Givenchy, Alexander McQueen, Gucci, Maje, Salvatore Ferragamo, and Valentino.
While the new Disneyland in Hong Kong has struggled due to a declining number of mainland Chinese tourists in Hong Kong, the Shanghai Disney Resort looks more promising for now. With a lower price point for tickets than Hong Kong, it sold out of opening-day tickets within hours of making them available online.
Bollier is optimistic about the benefits of the Disney proximity for attracting luxury shoppers. “At La Vallée Village, the fact that we’re adjacent to Disneyland Paris has benefitted us immensely to attract an international visitation,” she says. “We work closely with tour operators and tourism institutions behind the scenes.”