Chinese malls urged to differentiate themselves

Chinese shopping malls need to differentiate themselves by building a solid position in their own markets, instead of all being positioned as luxury and high-end malls, said the head of the China Shopping Center Development Association on Thursday in Beijing.

The country had 2,812 shopping malls with a construction area of 177 million square meters by the end of 2011, according to a recent report conducted by the China Chain Store and Franchise Association and DeloitteTouche Tohmatsu.

Of the existing malls, 80 percent are considered large, with between 50,000 and 100,000-plus square meters of floor space. By contrast, in the United States, only 20 percent of malls fall in that category, said Guo Zengli, president of the China Shopping Center Development Association.

James Hawkey, executive director of retail services for Cushman &Wakefield China, a subsidiary of a US-based commercial real estate services firm, said few shopping centers in Europe and the US occupy more than 100,000 square meters of space.

Most Chinese malls are aimed at buyers of medium-priced and relatively high-priced goods. They tend to offer the same brands and products and fail to meet the shopping needs of the general public, Guo added.

"The kind of shopping centers that most people need are the ones meant for the bottom of the pyramid," Guo said, meaning the ones that serve "ordinary people".

Although Chinese third- and fourth-tier cities are not suited to the construction of large shopping malls, they do have a need for shopping centers, Guo said.

"I would say that 50,000 square meters (of floor space) is quite enough, as those cities' population density and purchasing power are relatively small," Guo said.

Also, existing shopping malls should provide meals, movies and have comfortable layouts, Guo said.

China will have 4,000 shopping malls by 2015, a more than 40 percent increase over the current number. The number is likely to exceed 7,000 by 2025.