China's traditional stores slow to grab consumers

China's retail sector is booming -- especially in e-commerce and mega malls. But not all industry players are winning market share, traditional stores are under increasing pressure.

These are shots of three different shopping sites in Beijing taken at the same time over the weekend. It looks like the Parkson department store is the least visited place.

"I prefer places like this, where I can wander around and buy at ease. Parkson looks like something from the last century," Beijing resident of Solana Shopping Mall

China's retail sales are posting annual growth of around 13 percent, but traditional players are lagging behind. Beijing's department stores are posting less than 5% annual sales growth, far off the over 30 percent growth in their heyday.

Stores in Shanghai face the same scenario. The Yong'An store celebrated its 95th birthday in early May, but customer numbers were still low, even with promotions and coupons.

"People need stores that are ten times larger these days. A few thousand square metres cannot meet consumers' demand and they will disappear," said Wang Liuhe, secretary general of SH Merchandise Commercial Profession Trade Assoc.

Perhaps the only good news for Yong'An store is loyalty from customers, who are from the older generation and value brand names more. But traditional stores need more to survive. Parkson launched its online shopping site last September to jump on the online shopping bandwagon, but lack of variety and poor customer experience have put an extra burden on operations.

Analysts say the problem is that traditional chains believe online presence is just complementary to their physical stores, and they have been hesitant to invest more in e-commerce.