With a growing number of Chinese luxury consumers heading abroad or online to do their shopping, high-end mall developers and landlords face a challenging industry.
Nonetheless, new shopping centers are still being built across China, and in Beijing, several new malls have popped up throughout the city in the past year alone. But when it comes to filling up the space, the challenges aren't only reserved for landlords dealing with brand new structures, but also those who want to revamp the space they already have and find innovative ways to cope with China's swelling mobile e-commerce users—by keeping them from staying at home.
To do this, landlords are changing their strategies to bring shoppers into the malls by providing entertainment, opening art exhibitions, renting spaces to niche luxury brands, and adding more restaurants.
Not all find success. Beijing's Yashow, a mall near the popular Swire-owned Taikoo Li shopping complex formerly famous for its bargain buys, is still dead six months into their redesign and relaunch. Its new tenants are angry and already threatening to pull out, according to the Beijinger.
However, Beijing's newly revamped Grand Summit believes it can find success in this challenging market. The shopping mall, which is connected to a diplomatic compound in the city's embassy district, opened in 2008 with a small number of offerings. Its layout looked pretty familiar for retail spaces of its time: it included an international grocery store in the basement, a few Western restaurants and cafes, including Starbucks, Fat Burger, and award-winning upscale Italian restaurant Tavola, as well as mostly forgettable shops. Things stayed relatively the same for seven years. Then fall 2015 brought a host of openings significant enough to cause local publications to include a listing for the mall for the first time. Suddenly, The Grand Summit was on the map.
For approximately the last six months, The Grand Summit has been filling up with locally based, high-end independent brands. These include concept stores like Fei Space, a multi-brand shop with a flagship in 798 Art District that carries mostly Chinese labels, and JNBY Concept Store, which has worked with UCCA to host in-store art installations. Also on the roster is the showroom of iliangcang, an online store that curates lifestyle and home décor accessories by top designers from around the world.
Mixed in with the shops are more upscale versions of local health-centric restaurants, including Baker and Spice (an upscale spin-off from the Wagas chain that offers olive oil and wines to take home, along with a wider dessert menu) and Obentos, a clean-eating Japanese restaurant. The Starbucks in The Grand Summit also upgraded to feature its upscale Starbucks Reserve coffees.
The Grand Summit's founders don't stop at playing up to health food trends and Chinese shopper's increased desire for unique high-end brands. The mall also regularly plays host to events held by members of Beijing's international community.
As The Grand Summit expands across China with a new Shenzhen location and upcoming flagship shopping center in Shanghai, Jing Daily caught up with The Grand Summit co-founder Wang Gang (王刚) to learn more about his approach to creating a space that extends beyond the traditional shopping mall and his plans for building a strategy for not simply weathering e-commerce, but working with it.
In 2008, the first diplomatic residence opened in Beijing. We initially wanted to create a boutique business district focused on lifestyle, which didn’t exist in Beijing at the time. Because the project was headed by the clubhouse, it was very service-oriented (90 percent). Our target customers were diplomats in the third embassy district and locals who were familiar with this type of business environment.
Because all of commercial real estate's key elements (building space, businesses, consumer behavior, marketing strategies, services of management companies) are changing, we as an integrated platform should at least conform, if not lead.
Is it a challenge to plan out which stores to put in your mall because of competition with e-commerce?#
Since our entire project would be limited to 20,000 square meters and serve as a lifestyle platform and incubator for businesses, e-commerce would benefit us tremendously. For instance, one of our stores, iliangcang, has a strong online presence. In order to expand and increase brand recognition, it needed a brick-and-mortar store. Additionally, brick-and-mortar stores like Majiao want to increase their presence online, thus needs a flagship store in a shopping center that stands out from the rest of the crowd to raise online recognition and credibility. Compared to the typical giant shopping center, these two boutique stores are better suited for The Grand Summit.
There are also other individual stores that focus on design and cultural creativity and prefer a stronger physical presence to their e-commerce business. The development of e-commerce has strengthened the shopper's experience in brick and mortar stores and promoted collaborations between stores.
You host Farm to Neighbors farmers market in the mall every week. Why do you think it is important to have entertainment instead of simply brick-and-mortar stores?#
The goal of The Grand Summit isn’t to provide a shopping center, but rather to serve as a lifestyle platform and incubator for health, art, creativity, and communication. The relationship between these businesses and The Grand Summit isn’t simply one between a renter and a landlord. These businesses can use The Grand Summit more creatively as a platform to host fairs, promotional activities, exhibitions, and more. In the future we’ll have more farmers’ markets and fairs to showcase to the community.
To keep up with the times.
The birth and development of The Grand Summit is the product of an entire team, which consists of people with various backgrounds. I played the role of integrating everything together. I entered the commercial real estate industry in 2003 and have always been working on projects that revolve around commercial lifestyle.
We want to provide content that is more flexible. By using digital technology, we can reach a relevant market and help them experience the lifestyle we are creating for them. Second, we have recently invested in certain brands that are suitable for The Grand Summit through acquisitions, collaborations, as well as our own creations. For instance, there will be art galleries, spaces for art education, yoga studios like Yoga Summit, and more. These brands will flourish through this commercial incubator.
This interview was translated by Jessica Xie.