Shopping with an artistic twist
New World hopes to bring a new and unique experience to shoppers at its K11 themed malls
Shopping is only part of the experience at the mall network that Adrian Cheng Chi-kong is building on the mainland. Art and culture are also offered at the K11 development in Shanghai, which has quickly emulated the success of the namesake shopping centre in Tsim Sha Tsui that launched the concept.
Cheng, joint general manager of New World Development and founder of its K11 art-shopping fusion project in Hong Kong, said he wanted "to bring a new and unique experience to shoppers" under the firm's expansion plans for the themed malls. "Our mission is to educate and bring art to the masses," he said.
His first mainland project involved converting the Shanghai Hong Kong New World Tower into Shanghai K11 as a test bed for an ambitious introduction of 19 shopping centres under the K11 brand over the next five years.
The art concept stems from a shoppers' survey the company did in 2008. "We found many customers are bored by the traditional shopping centre format. The malls have the same retailers and the same shopping experience. It inspired us to do something different," Cheng said.
"Also, the shopping population is younger than before. We believe K11's concept of culture and commerce can take off in Hong Kong and on the mainland.
"We want our shopping centre to feel less commercialised. We don't want our shoppers to visit our mall to buy a luxury bag only. We hope they can have a cultural experience and stay longer in our mall. We are creating a journey of the arts."
Moreover, the concept involved more than the static displays of artwork, Cheng said, with the centres aiming to promote local and global art.
"Even if we have the same tenants as other malls, the products will be different," he said. "We would invite retailers to have crossover products with local designers or artists. Customers can buy such unique products at our mall only.
"We believe in customer participation. We have a cooking studio in Hong Kong and Shanghai. They have workshops every week. In Shanghai K11, we have a plot for our VIP customers to cultivate vegetables."
New World's quest for differentiation in the retail market is driven by the fierce competition. Consultancy Knight Frank said 33 and 42 shopping centres with more than 100,000 square metres of space were completed in 2012 and 2013, respectively, in 11 major mainland cities.
Buoyed by the success of Shanghai K11, Cheng believes New World is on the right track with the concept, achieving a different positioning in the market.
The Shanghai centre, in Huaihai Road, has achieved the highest retail rents in the prime shopping district since it opened in June. "Retail rents surged 70 per cent from previous levels, while office rents recorded 30 per cent growth. Our rental income has risen 30 per cent," he said, adding that foot traffic had doubled to one million shoppers a month.
New World plans to badge each K11 centre with a different theme in the arts. "Hong Kong K11 is focused on design. Shanghai K11 has the theme of contemporary art. Our next project, Beijing K11 [scheduled to open in 2017], is close to the Temple of Heaven and the old home of Cao Xueqin [the writer of classical novel Dream of the Red Chamber]. So we hope to develop a unique theme for Beijing K11 to match with the neighbourhood," Cheng said.
As for the outlook for the retail market, he said: "It will be supported by urbanisation and an annual growth rate of 8 to 10 per cent in salaries."