China Shopping Mall Operations Indepth Research and Investment Strategy Report, 2013-2017

With the economic development and the improvement of living standard, consumption no longer means shopping with a purpose for consumers only, but the experience and enjoyment during the shopping. As a consumption industry which joints shopping, leisure and entertainment together, the shopping mall is booming. According to statistics: the annual added amount of domestic shopping mall is about 100 to 200 from 2002 to 2004 while it will be 300 to 400 from 2012 to 2015. In other words, the growth rate of total opening amount for China shopping mall is 893%. Such a speed is rare in new market country. What surprise us more is that added number of new China shopping mall will exceed 1,300 in next four years according to researches. In a detailed view that there are 285 complexes which open in the first-tier city in 2011 and 75 in 2012, 55 in 2013 and 2014; there are 595 complexes which open in the second-tier city in 2011, and 230 in 2012, 400 in 2013 and 2014.

After over ten years of development, the distribution of shopping mall has expended from the first-tier cities such as Guangzhou and Shenzhen, to the second-tier cities such as Wuhan, Dalian and Chongqing, as well as to the third-tier cities. In spite of providing considerable tax income for local government, the building of shopping mall is a grand landmark for a city. With supports from local governments, the shopping mall construction becomes popular in medium and small cities like Wuxi, Xuzhou, Lanzhou and Huizhou, Guangdong, etc.

According to data, consumption rate in Beijing and Tianjin is less than 0.3 and it is only about 0.3 in Shanghai, Guangzhou and Shenzhen. However, it is over 0.6 in the second and third tier cities such as Shantou, Wenzhou, Qiqiha’er. (Consumption rate refers to the proportion of the total individual and social consumption to the current GDP for a country or region during a certain period.) But according to another statistics, the cities with less than 50 new shopping malls and a 150% growth rate since 2003 are mostly belonging to the second and third tier cities which with a higher consumption rate. Accordingly, market space for the second and third tier cities is larger than the first tier cities.

The main type of China shopping mall is community shopping center which takes about 49.3%. It reflects that during the 20 years of development, China shopping mall industry is adapting to the market demand and gradually enters into the community living and service. The proportion of community shopping center which is nearly 50% is a significant symbol of the reasonable and healthy development for China shopping mall in general. China shopping mall once purchased over large size and over wide business district. However, limited by investment resource and geographic conditions, supra-regional shopping mall will gradually reduce to smallest amount in China shopping mall industry.

Due to the enhancing control force for real estate industry, there are many limitations for housing real estate investment. Therefore many real estate corporations start business in commercial real estate. China Vanke announces that the proportion of holding property will be 20%; Poly plans that proportion of commercial real estate to the whole investment will be 30% by 2012; Kinji will invest 20% investment into commercial project in the 2011 land investment plan. And the experienced commercial real estate developers such as Wanda and China Resources will continuously expend the market. On the other hand, the traditional department stores also joint the shopping mall market. In order to enter the shopping mall industry, Lushang Group registered the "harmonious square" brand, and cooperated with Zhaolong Holding Group to establish the Yinlong business management company as a special operation institution. All these increase the competition of shopping mall industry, and promote the development of the industry as well. With the joint effects the operation of China shopping mall will move towards standard and rational. And the shopping mall industry will become a mature one.

Here, we’d like to express our sincere gratitude to China Shopping Mall Industry Information Center, Shanghai Shopping Mall Association, National Statistics Bureau of China, International Information Institute, National Institute of the Ministry of Commerce, National Tsing Hua University Library, Institute of Market Economy of the State Council Development Research Center, and Beijing Qinghua Forward Market Research Center, etc. Thank you so much!

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Qianzhan Business Information Co., Ltd. Industry Research Center
Research Team of Shopping Mall Operation