SKP opens in Wuhan: Can world’s top luxury mall replicate its success?

What happened Another SKP luxury mall is set to open in central China on July 26. The Wuhan SKP, spanning 150,000 square meters of retail space, will host over 1,000 global brands across beauty, fashion, jewelry, watches and home goods. In addition to luxury giants like Louis Vuitton, Dior, Gucci and Cartier, the mall will also introduce 200 smaller brands new to Wuhan, further cementing the city’s status as a key shopping destination in central China. During its two-week trial operation that started on July 13, Wuhan SKP has already achieved impressive results, with daily revenue reaching 20 million RMB ($2.8 million) on the first opening weekend. On social media, the hashtag #WuhanSKP has garnered over 16 million views on Xiaohongshu and 417,000 on Weibo. The Jing Take The Wuhan location is the fourth SKP luxury mall to be developed by Beijing Hualian Group in China. It joins centers in Beijing, Xi’an, and Chengdu. Since opening in 2011, SKP Beijing has earned a place as China’s top-performing luxury mall for over eight years now. In 2020, SKP Beijing surpassed London’s Harrods with an impressive annual revenue of 17.7 billion RMB ($2.5 billion), to become the world’s number one luxury mall. By 2023, revenue had reached a staggering 26.5 billion RMB ($3.7 billion). The Beijing store owes its success to its concentration of luxury brands, as well as the significant number of high-net-worth individuals (HNWIs) in the country’s capital. According to Hurun’s “China High Net Worth Family Cash Management 2023” report, there were 2.11 million families in China with a net worth exceeding 10 million RMB ($1.4 million) in 2023. Among them, Beijing leads with 306,000 households, followed by Shanghai and Hong Kong. By comparison, the Xi’an and Chengdu SKP malls have faced more challenges. Xi’an SKP, which opened in 2018, generated peak revenue of 9.5 billion RMB ($1.3 billion) before slipping to 8 billion RMB ($1.1 billion) in 2023; Chengdu SKP, which opened just over a year ago, generated 5.5 billion RMB ($761 million) last year. To address these challenges, both Chengdu SKP and Xi’an SKP have been rebranded as more than just luxury malls, positioned as day-to-day “citywalking” destinations to increase traffic. In 2021, Xi’an introduced the second SKP mall outside of Beijing, incorporating art exhibitions and technology-driven shopping experiences. Chengdu SKP, on the other hand, was built around the concept of creating a complex that included a park and other entertainment facilities. Wuhan SKP, meanwhile, has taken a different approach by placing luxury brands outside of the mall, offering a standalone luxury street named “K-avenue” that gives brands more flexibility to design their stores and engage customers. Besides top luxury brands, Wuhan SKP has also introduced more affordable and youth-oriented brands such as Clot, Goldwin, Youngor, and Adidas. Despite these efforts, the competition among high-end malls in Wuhan is intense. Wuhan does not have the same concentration of HNWIs as Beijing, and there are already several major businesses operating in the city, including top local leader Wushang Mall, as well as Hang Lung Plaza and K11, built by Hong Kong developers. Netizens have expressed excitement online about SKP opening in this city. Xiaohongshu user @Tyrannosaurus_X commented: “SKP has profoundly transformed the commercial landscape of Wuhan; now Wuhan truly has a top-tier luxury venue.” Another user, @Shaodongjia (邵东家), commented: “Wuhan is exceptionally strong now. Its high-end luxury store count ranks fifth nationwide.” Whether SKP can replicate its success in Wuhan will become apparent in the near term. But for many, SKP is a landmark that signifies the city’s growing importance in China’s luxury market. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

SKP opens in Wuhan: Can world’s top luxury mall replicate its success?

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Published July 25, 2024

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SKP opens in Wuhan: Can world’s top luxury mall replicate its success?