China property

Fright nights and blind dates: China’s malls put on a new face to combat online shopping

Brick-and-mortar malls mount shopping experience to fight for business with online shopping

PUBLISHED : Tuesday, 25 October, 2016, 3:26pm
UPDATED : Tuesday, 25 October, 2016, 11:39pm

At the Joy City Chaoyang mall in Beijing, a haunted house looms near the entrance. For those shoppers brave enough to try, they must negotiate five separate mazes taking about 40 minutes, where professional actors play out the characters of South Korea’s hit horror comic Beauty Water.

Welcome to the new shopping experience in China, brick-and-mortar style.

As e-commerce upends retailing in the world’s most populous consumer market, China’s malls are reinventing the shopping experience to retain customers and survive the onslaught.

“We are making new attempts to attract different types of consumers, and this one is targeting those who love to try new things and adventures,” said Zhao Bo, assistant marketing director at Joy City Chaoyang, owned by Hong Kong-traded Joy City Property. “Purely promotional events are no longer our interest.”

There are 4,600 malls in China, with the number likely to more than double to 10,000 by 2025, according to an estimate by Deloitte.

While retail sales have held steady, China’s online shopping has been booming, growing 33 per cent in 2015 on track to reach US$1 trillion this year, according to Ecommerce Europe.

Alibaba Group, operator of the world’s largest online shopping platform and publisher of the South China Morning Post, is the biggest driver of that growth. Its annual Singles’ Day extravaganza is the largest online shopping event on earth, drawing in US$14.3 billion of transactions last year in 24 hours.

Against such an onslaught, malls are reinventing themselves to remain relevant. Located in Beijing’s most prosperous neighbourhood of Chaoyang, Joy City is a mid-range mall, where brands like Zara, UniQlo and Muji are aimed at attracting the 18-to-35 year old demographic. The mall has a pet world for young children and a cooking studio.

In the end, most customers will buy at our stores as we provide an ideal shopping experience and environment
Zhou Zheng, Joy City chairman

The haunted house, riding on the coat tails of the Korean horror hit and ahead of Halloween, attracted 89,000 visitors on its first opening Saturday, 10 per cent more than the same weekend a year ago, Zhao said.

On the outskirts of the capital, Longfor Properties’ Changying Paradise Walk is offering the family theme to attract entire households to spend the day in its 270,000 square metre complex. An entire floor occupying 12,000 square metres is devoted to children’s play and education. The mall has an IMAX cinema, and features the popular South Korean cafe chain Tous Les Jours.

Kids can spend the whole day having fun with slot car racing and the trackless mall train, or engage in more educational activities such as reading books, attending English classes, or even participating in gymnastics classes.

“There could be impact from e-commerce, but we have shifted to focus on the shortcomings [of online shopping], such as kids playground, movie theatres, and even blind date activities [for adults], ” said Peng Peixi, general manager of Changying Paradise Walk.

He added that the kids theme will be a priority promotion with more facilities expected to be added as the company’s research shows that about 60 per cent of residents in the neighbourhood are in the 25 to 38 year age group, offering big potential for future kids-related consumption.

Dining and entertainment, including space allocated for children, accounts for two-thirds of Changying’s total tenant mix by floor area. “We will become a one-stop shopping destination for families,” Peng said.

Joy City believes mall operators should not be afraid of the internet, but rather embrace it.

“We welcome customers to come and try clothes on but shop online. In the end, most customers will buy at our stores as we provide an ideal shopping experience and environment,” said Joy City chairman Zhou Zheng. “In fact, we see strong sales on every year’s Singles’ Day.”

Zhou added that this autumn the Shanghai Joy City mall will be decorated as a park, with the ground covered with maple leaves to attract young couples.

Analysts say the development of experienced-based consumption is the right direction for mall operators.

“Shopping mall transformation has a long way to go but is a must-do,” said Yew Hong Koh, managing director of Accenture Asia Pacific and Greater China retail practise.

“There are still many segments which online shopping cannot satisfy, for example, family outings and people who prefer convenience or quality goods. As long as one can catch the changing consumer behaviour, there will be room for making profits, for sure,” Yew said.