K11 scores with culture of success
It's worked in HK, and now Shanghai's trendy set are buying the idea of New World's art mall
The driving force behind Tsim Sha Tsui's popular K11 Art Mall has been buoyed by the response to the opening of a namesake shopping centre in Shanghai's busiest shopping strip.
Adrian Cheng Chi-kong, an executive director of New World Development, says shoppers on the mainland have embraced with enthusiasm the concept of infusing culture and art into the shopping experience.
Cheng, the grandson of property tycoon Cheng Yu-tung, says the move to transplant the K11 model to the mainland's commercial capital was motivated by more than just the idea of introducing affordable luxury with a splash of culture. It is about understanding of the demands of increasingly affluent mainlanders and responding to their individualism, he says.
"They want to get a taste of culture at shopping centres," Cheng said. "They will get bored if the shopping malls display and sell only a variety of luxury items."
New World officially opened its K11 Art Mall on Shanghai's Huaihai Road last month. However, the centre's doors opened late last year, as tenants began filling up the vast 40,000 square metres of space.
Since the centre's "soft opening", the mall that combines an art gallery experience with shopping has drawn rave reviews in Shanghai. It is now regarded as a "must see" among its target demographic of the young and fashionable.
"Well-to-do Chinese shoppers are mostly young people aged between 25 and 40," Cheng said. "Their wealth is the biggest potential to tap in the market."
The success of the K11 Art Mall in Tsim Sha Tsui gave Cheng the confidence to export the brand to the mainland. The 33-year-old says the response from Shanghai's fashionable set shows the time was right to embark on his mission to change the retail landscape on the mainland.
New World plans to bring the K11 concept to 11 mainland cities, including Beijing, Guangzhou, Shenyang and Tianjin, with a total investment of about US$1 billion.
"Mainlanders are not tightening their purse strings. They are more concerned about the shopping environment and their own position," he said. "We want to differentiate ourselves from others to gain a competitive edge."
Cheng said the K11 shopping malls could rake in annual sales of 20 billion yuan (HK$25.2 billion) when they become operational. In Shenyang, Liaoning province, the K11 mall would bring the concept to northern China and feature Chinese cultural traditions such as Peking Opera when it opens in 2015.
At the Shanghai mall, New World has 120 tenants including Dolce & Gabbana and Max Mara.
Chinese shoppers were the biggest buyers of luxury goods last year, with their purchases representing more than a quarter of the world's total for the sector.
While the authorities' anti-corruption drive has fuelled concerns about an impact on luxury brands and retailers, Cheng sees no threat to the K11 concept.
Property services firm DTZ said Shanghai K11 could revolutionise shopping malls on the mainland as the threat from online vendors forced developers and retailers to innovate.
Aside from the mall, the mixed-use complex includes 80,000 sq metres of office space.