Sun Hung Kai's Beijing manager Ian Choy has learned to adapt
Sun Hung Kai's man in the capital has seen shopping malls evolve rapidly, and remembers some of the early challenges
Fifteen years ago, the concept of a "shopping mall" was still new in Beijing when Ian Choy Chi-keung, chief local representative of Sun Hung Kai Properties, was tasked with opening a new shopping mall in the city.
Today, in the 10 major districts in Beijing's city centre, there are 62 malls that act as magnets to draw shoppers into the large complexes in which they are located.
"My job, in January 1998, was to prepare the opening of the former Beijing Sun Dong An Plaza [since rebranded as Beijing apm]. At the time there were only a few shopping centres with floor areas of more than 100,000 square metres," recalled Choy, who was speaking by phone from his office in Beijing.
The first challenge was to hire staff to manage the mall.
"The concept of property management was not understood at the time," said Choy. Instead there was a simple concept of "service" and applicants thought it was easy to serve people and all they needed to do was simply stand in the mall and serve customers.
"So we had to train them how to serve the shoppers and in the end we hired staff from the hotel industry since they were well-trained to serve hotel clients."
Beijing apm on Wangfujing Street, one of the most famous shopping streets in Beijing and a Mecca for tourists to the city. So from the day the shopping centre opened most of the visitors were tourists.
"Local people seldom went shopping on Wangfujing Street at that time because they thought most of the shops targeted tourists and they would not find anything they wanted. Instead they liked to go shopping in Xidan [a shopping district in Beijing's West, especially popular among younger shoppers]."
Although several international luxury brands had opened stores along the shopping strip of Wangfujing at the time, it had not yet become famous as a destination for luxury shopping, said Choy.
But since then the Beijing retail market and the area has changed rapidly, particularly as it geared up in 2007 for the Beijing Olympic Games to be held the following year.
"Local and overseas developers were in a rush to build shopping malls and hotels as they expected the Games would attract millions of visitors from all around the world and the local economy would benefit," he said. "That brought a big change to Beijing's retail market."
After witnessing the strong purchasing power of mainland tourists in Hong Kong, many international brands embarked on aggressive expansions in the capital after the Games. They found they were supported by increasingly affluent local shoppers as well.
Taking a lesson from these developments, Sung Hung Kai has shifted its target market from tourists to local young shoppers and carried out a facelift of its mall, rebranding it Beijing apm - following on from the success of its apm concept in Hong Kong. [apm, or "am to pm", signifies the longer than usual opening hours at the mall.]
"Average annual spending per capita on the mainland has risen from 80 yuan at the time we opened the mall in 1998 to more than 800 yuan (HK$980) currently," said Choy. "Now, about 70 per cent of our shoppers are local people."
Following the completion of several new shopping malls over the last few years, the retail market had become very competitive, Choy added.
"We now have to find tenants that are attractive to the shoppers. For example, while Apple has several stores in the city, its Beijing apm store is the flagship.
"We have to change fast to attract young shoppers," he said.