The expansion of China’s online retail sector, which grew to RMB 12.3 trillion ($1.9 trillion) in 2014, has led many observers to predict dire consequences for bricks-and-mortar commerce in the country.
However, despite the impressive growth of Taobao and
Part of the reason that e-commerce and shopping malls in China both are growing at comfortable clips, despite China's recent slowdown in economic growth is that they both serve useful functions for the growing crop of mainland consumers, with offline commerce providing a social function that is lacking both in online platforms and in other areas of Chinese society.
Weekends are for Window-Shopping
With Chinese having more disposable income and leisure time after twenty years of record economic growth, Guangjie, which roughly translates as window shopping, has become a primary pastime for many of China’s newly affluent consumers.
Artist's rendering of the CityOn Xi'an mall in western China. (Image courtesy of Taubman Asia)
In communities that lack adequate public spaces such as parks, gyms, and other activity areas, malls have quickly become popular meeting places, particularly in China, where homes are smaller and multi-generational living is common. They also have become destinations in themselves, drawing in people to enjoy a day out and fill their leisure time.
“Malls have evolved from prosaic boxes accommodating shops with functional circulation through to lifestyle centres with greater integration of F&B and entertainment, public spaces, and often day-lit arcades designed to maintain a longer dwell time, enhanced consumption, and keeping shoppers in a browsing trance”, says Christine Lam, Executive Director of global architectural firm Aedas. “They are palaces of consumption.”
The importance of shopping as a social activity in China is backed up by research from McKinsey. The firm’s survey of Chinese consumer attitudes finds that 73% of respondents regarded shopping as a leisure activity, and roughly half said it was “among the best ways of spending time with the family.”
Online Retail Bringing Social Shopping to the Forefront
The phenomenon of shopping as a social activity has become more important as Chinese consumers use online sources for many mundane purchases, but rely on shopping in malls for entertainment and social activities.
“The growing effect of online retailing requires malls to evolve from a palace of consumption to palaces of experience,” says Lam. “Moving away from the globalised ubiquitous retail environment to the creation of unique experiences by various means of implementation of tenancy mix, retail planning, spatial character, use of function, social, and cultural response.”
Making Malls Fit the Community
With real estate consultancy JLL estimating that 40 million square metres of new malls will open in China over the next three years, developers and designers are having to work harder to ensure that their new project dovetails with consumers trends, and with the local community.
“You’ve got to have an identity that is particular to the location, to the people, the shoppers – everything,” says Trevor Vivian, Global Director and Hong Kong Studio Head at architectural firm Benoy.
The global design firm, which designed Shanghai’s popular iAPM luxury mall, looked to incorporate such details as landscaped terraces and elements of the city’s traditional Shikumen lane-house architecture into the shopping centre along Huaihai Road.
Other elements of the neighborhood included in the 130,000 square metre retail destination include rows of “dining boxes” carved into the street front of the seven-storey structure. These boulevard-style terraces, which are woven among landscaped gardens, allow retailers to re-create streetfront cafes in upper floor retail space that faces the city’s Xiangyang Park.
Dining Space Takes Over More of the Mall
The emphasis on designing appealing dining spaces at the iAPM is not surprising considering the growing role that food and beverage outlets play in China’s shopping malls.
According to research done by Mingtiandi for its retail real estate white paper, China Mall 2020, malls in China set aside 30-40% of their gross floor area for food and beverage, up from 10-15% before 2007.
Some developers, such as the Wanda Plaza chain owned by billionaire Wang Jianlin's
Guohua Jean Zhang, Managing Director, China at developer Taubman Asia, a subsidiary of U.S.-based REIT Taubman Centers, which is developing shopping centres in Zhengzhou and Xi’an, China points out that with Chinese malls often being integrated with housing projects, the higher rate of food and beverage and entertainment space is natural.
“In the last 15 years, Chinese shoppers have experienced major changes to their shopping environment, from retail under a traditional department store model to a shopping centre model”, explains Zhang. “The resulting rise in mixed-use developments – meaning real estate projects blending residential, office, and commercial use – has spurred mall operators to combine shopping, dining, and entertainment options under a single roof and this has consequently become a central part of the Chinese lifestyle.”
However, even with the rise of mixed-use projects, Zhang pointed out that malls that rely on dining venues for over 50% of their leased space are often the result of poor planning.
Social Shopping Creating Bigger Malls
The result of more dining in malls, along with other social elements, is that China’s shopping centres have begun to grow ever larger, especially as developers begin creating more open spaces for non-retail activities, which are increasingly relied on to generate foot traffic.
“We’re saying that the public space is actually an anchor now,” says Vivian of Benoy. “It could be an outside space like the old town square in Italy. But things need to happen in there all the time. There needs to be something new happening there, and it brings people to the area.”
According to JLL research, the average size of new shopping malls in Shanghai alone has doubled over the past 15 years, from 40,000–45,000 square meters to 90,000 square meters today. On average, mall sizes across China are 95,000 square meters, at least 30% larger than other countries, and some bigger malls can reach 200,000 square meters or more.
