Cofco’s Joy City adopts asset light approach to China shopping mall growth

Joy City, the Hong Kong-listed commercial property arm of Cofco, mainland China’s biggest food supplier, has continued to expand at a steady pace, successfully opening seven malls in nearly a decade, despite increasing competition.

Zhou Zheng, chairman and general manager of the developer, said that as a young mall operator it has been putting particular effort into maintaining quality to ensure it builds customer confidence and branding. But the company is now ready to usher in a faster period of growth and is eyeing more asset-light projects in which it can offer its branding and management expertise to struggling department stores. This will grow its mall portfolio at lower cost, with a target of 20 malls by 2020.

Joy City has not expanded quickly until now. What’s the reason?

We have opened one or two new malls a year. Some firms have opened very fast, but they don’t cultivate them. We have set our own pace and focused on establishing a sound business model, including building our team and operations, and being innovative.

We’ve also made a lot of effort to create enjoyable scenes for customers. For example, the architectural design of Chengdu Joy City incorporates elements of the local Jiuzhai Valley National Park, with four changes of season. We would never sacrifice quality for scale.

Now we can speed up because the company is entering maturity. We are eyeing asset-light projects to realise faster growth. Not every company can succeed in an asset-light business, as it requires a proven track record of successful projects. We are confident because we have built a solid foundation.