Chinese shoppers are famous for flying to Hong Kong and foreign cities such as Milan and Paris, but with Beijing eager to encourage greater domestic consumption, quality outlet malls could become the next hit in China, says an article in the Wall Street Journal Asia. Excerpts:

As the outlet-mall concept - whereby high-end retailers operate shops in outlet malls to sell out-of-season merchandise at a steep discount - comes to China, it's shaking up the retail environment.

Such malls promise to fill an important niche for China's brand-conscious middle class, who still lack for ways to spend their spare cash.

Chinese-owned outlet malls have been around for about a decade, but so far they still lag behind their foreign counterparts in both size and quality Foreign outlet-mall operators have a much easier time recruiting top brands to their China ventures because they have already established trust with their European and American malls.

Boosting domestic consumption is not simply a matter of diverting goods produced in exporting factories into the home market, instead, a successful consumption economy requires special skills to brand and market products, in addition to the ability to physically distribute them.

One of China's challenges in rebalancing is to build up such skills.

While domestic outlet-mall operators struggle, foreign ones with quality management and marketing have started pulling new middle-class consumers into the luxury market and convincing people to shop at home instead of flying abroad. Given the country's economic goals, this trend should be food for thought for the National People's Congress.

(China Daily 03/14/2012 page10)