Shopping centers one-stop solution for consumers

At Sanlitun Village in Beijing, which was designed with an open plan, shoppers can pass freely from building to building and from store to store. Zhu Xingxin / China Daily

For Alvin Kong, they act as the cornerstone that holds the whole together. You can build a fancy hotel, throw some desirable office space on top and finish it off with rows of luxury shops, but if you do not have the shoppers you are essentially wasting your time.

Kong, of Swire Properties, reckons that in a multipurpose development, a shopping center is the thing that brings and holds everything together, including the hotel guests, the office users, business people and others.

"A shopping center is a place where people meet others for personal or business purposes, entertainment or shopping," Kong says.

Swire Properties continues to display its confidence in the retail business in China. As it has done with Sanlitun Village in Beijing and Tai Koo Hui in Guangzhou, the Hong Kong company is focusing on large-scale multipurpose complexes. The latest of these is Indigo, in the Chaoyang district of Beijing, with a total site area of 59,000 square meters.

Differentiation matters

While most shopping centers have a certain sameness about them, Swire Properties says it is intent on ensuring that each of its operations develops with its own, unique characteristics. That means different operating models in each location to meet the demands of consumers looking for something better and a little different when they shop.

"Our three shopping centers illustrate how we would like to approach the business in China," Kong says. That will come through in the choice of products, appearance and architecture as well as the brand portfolio.

In Sanlitun Village there are 240 shops, TaiKoo Hui has about 180, and Indigo will have 170.

"Each project has its attractiveness and position, and what we don't want to do is simply have one shopping center, and copy that in 15 other cities in China," Kong says.

Nevertheless, apart from the unique traits that Swire hopes each of its projects enjoys, in each of them it is looking for a carefully crafted mix of trade and brands, professional management and targeted marketing.

At Sanlitun Village, which was designed with an open plan, shoppers can pass freely from building to building and from store to store, and there are many flagship stores, such as those of the German and Italian luxury goods makers Montblanc and Emporio Armani. Other big names with a presence include the fashion houses Alexander McQueen, Maison Martin Margiela and Balenciaga.

"It captures all the fashion elements and sense of Beijing," Kong says. "It carries very fashionable brands, such as Christian Louboutin from France, and you can also find the BNC store that brings many Chinese independent designers together."

The TaiKoo Hui center in Guangzhou is a high-end multipurpose development with an indoor center. The architect was Arquitectonica, of Miami. On the ground floor there are Prada, LV and other luxury goods stores, and the first Channel store in South China is located in the shopping mall.

"Although it is high-end, we want to have a comprehensive range in our shopping center," Kong says.

"We do make an effort to include day-to-day good-quality options as well, and we have Food Republic, one of the largest food court chains in Asia, as well as the supermarket Ole."

As for Indigo in Beijing, it is a regional shopping center catering to a particular community, Kong says.

On a Wednesday morning, nearly half of the tenants were still renovating shops, and there were few customers, including Guess, Gap and Costa Coffee.

However, at lunchtime on the second floor, Food Republic was so busy that some customers could not find a seat.

"We see a lot of potential in the Chaoyang district in terms of demographics and geographic location," Kong says.

With its convenient location, between the main airport and downtown, and the large office work force, the company aims to make most of the market that the people living in the area offer.

"Apart from the office and business hotel component, a shopping center is a regional hub that offers a one-stop solution to meet the demands of consumers for a movie on the weekend, for dating needs, for a good meal, or for day-to-day needs," Kong says.

Good choice

Goods need not be expensive, but they need to be good selections, he says.

So the key to choosing brands is not the price or their popularity, but whether they are attractive to those living in the area and whether they gel with each shopping center's trade-mix concept.

"In general, overseas brands account for 70 percent of the three projects' brands. How to make brands together under one roof and make it interesting is important for us."

When it comes to determining the target consumer for each shopping center, Kong says he is reluctant to over-categorize customers.

"People who are interested in quality and the environment will come to us. Choices are there, but you don't need to spend a lot of money. You can just go for a cup of coffee with about 30 yuan ($4.75)."

Retail leases generally last three to five years, meaning shops and brands can be refreshed from time to time.

At Sanlitun Village, opened in 2008, Swire Properties brought in 33 new tenants in one section last year in an effort to improve the mix.

"There are always changes, and new shops are popping up there," Kong says. However, he sees no need to be in a rush to grow.

A company project in Chengdu, Daci Temple, is due to be completed in 2014, and a project in Shanghai, including a shopping mall, is expected to open after 2016.

This year Swire Properties also announced that it has plans for a multipurpose project in Miami with gross floor space of about 269,000 sq m, including space for shopping and dining.

yaojing@chinadaily.com.cn