Retail  and  Shopping  Center     Development  in  China   Jeff Zhang National Strategic Relationship Controller of Watsons China Expert Committee Member of China Commercial Real Estate Association China Chain Store and Franchise Association Mall China Information Center (ICSC Affiliate) [email protected]  

Agenda •  Retail  Development  and  Trend   •  Shopping  Center  Development  and  Trend   •  Overview  of  Top  Sales  Shopping  Centers   •  Opportuni;es  and  Challenges  

Retail  Development  and  Trend:  Transforming  Economy •  The 18th Communist Party of China congress – smooth leadership transition. •  In 2012, GDP growth reached 7.7%, consumption growth reached 14.3% (source: China Statistics Bureau). •  What’s NEW - Average Personal Income in 2020 shall be doubled based on the level of 2010. •  Total consumption scale shall be $10 Trillion in 2020 (source:   China’s  Economic  News).  

Retail  Development  and  Trend:  Transforming  Economy •  Economy transforming to consumption-driven. •  In the first 8 months of 2013, the total retail sales of consumer goods grow by 13.4% from a year earlier, Vs. annual GDP growth target 7.5%. •  By 2018, import $10 trillion of goods, invest $500 billion overseas, send 400 million tourists abroad.

Retail  Development  and  Trend:  Online  Shopping Source：China  Chain  Store  and  Franchise  Associa2on,    August,  2013 

12.0%  

10.5%  

10.0%   8.0%  

11.2%   11.2%   11.1%   11.1%   11.0%   11.2%  

9.2%  

9.0%  

7.8%   6.3%  

6.0%  

4.3%  

4.0%   2.0%  

3.2%   2.1%   1.2%  

0.0%   2003   2004   2005   2006   2007   2008   2009   2010   2011   2012  

Total 连锁百强 Sales of 占社消品 Top 100 比例  Retailers

Total on-line 网络零售 Sales 占社消品 比例 

Retail  Development  and  Trend:  Brick  +  Click Source：China  Chain  Store  and  Franchise  Associa2on,    August,  2013 

Retail  Development  and  Trend:  Convenience  Stores Source：China  Chain  Store  and  Franchise  Associa2on,    August,  2013 

Retail  Development  and  Trend:  Booming  Consump;on

Source:  McKinsey  Quarterly  Report    March,  2012  

Retail  Development  and  Trend:  The  Needs  Are   There

Retail  Development  and  Trend:  Popular  Brands  

Retail  Development  and  Trend:  Luxury  &  High-­‐end   Brands  

Retail  Development  and  Trend:  New  Brands  in  China  

Retail  Development  and  Trend:  New  Brands  in  China  

Shopping  Center  Development  and  Trend:  Close  Coopera;on

Shopping  Center  Development  and  Trend:  Visited  82  Ci;es

Daqing Wulumuqi

Harbin

Changchun Jilin Shenyang Huhehaote Baotou Yingchun

Kashi

Xining

Datong Taiyuan

Lanzhou Dingxi Baoji

Xi’an

Baishan Chengde Chifeng Fushun Huludao Beijing QinghuangdaoAnshan Tangsha Baoding n Dalian Tianjin Shijiazhuang Yantai Jinan WeifangWeihai

Zhenzhou Luoyang

Shiyan Chengdu Xaingyang Chongqing Yichang

Municipalities Special Administrative Regions Other Cities

Xinyang

Zibo

Qingdao

Yangzhou

Wuxi Nanjing Shangha Suzhou Hangzho i Wuhan Cixi u Changsha Shaoxing Ningbo Nanchang Guiyang Wenzhou Xiangtan Zhuzhou Lijiang Kunming Fuzhou Dushan Guangzhou Xiamen Naning Foshan Dongguan Taibei Yingjiang Shenzhen Hong Xishuangbanna Zhongshan Kong Zhuhai Macau Haikou Wenchan g Wanning Sanya

Suifenhe

Shopping  Center  Development  and  Trend:  Overview New Shopping Centers Opened in Each Year 

•  TEEMALL-opened in Guangzhou in 1996, building area160Ksqm. •  By 2012, 2,800 •  By 2015, 4,000 •  300 new shopping malls opening in each year in 2013-2015. •  Become the most important platform for retailers of all sorts

400 350 300 250 200 150 100 50 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source:  China  Chain  Store  and  Franchise  Associa2on 

Shopping  Center  Development  and  Trend:  Major   Players

Shopping  Center  Development  and  Trend:  Major  Players

Shopping  Center  Development  and  Trend:  Major  Players

Shopping  Center  Development  and  Trend:  Major  Players

Shopping  Center  Development  and  Trend:  Top  5  Malls

Beijing Shin Kong Place $1.2B

Hangzhou Tower Shopping City $0.98B

Guangzhou Grandview Mall $1B

Shopping  Center  Development  and  Trend:  Top  5  Malls

Guangzhou TEEMALL $900M

Shenzhen MixC $900M

Shopping  Center    Development  and  Trend:  Top  25  Malls Beijing: 1)  Shin Kong Place (1) 2)  Xidan Joy City (16) 3)  Cuiwei Tower (18) 4)  Oriental Plaza (21) Shanghai: 1)  YAOHAN (8) 2)  Plaza 66 (14) 3)  New Word Dept. Store (15) 4)  Grand Gateway (17) 5)  IFC (22) Guangzhou: 1)  Grandview Mall (2) 2)  TEEMALL (4) Shenzhen: 1)  MixCity (5)

Shopping  Center  Development  and  Trend:  Top  25  Malls Nanjing: 1)  Deji Plaza (6) 2)  Golden Eagle (9) 3)  Zhongyang Dept. Store (10) Hangzhou: 1)  Hangzhou Tower (3) 2)  Intime Wulin (25) Wuhan: 1)  International Plaza (11) 2)  Wuhan Plaza (19) Changchun: 1)  OuYa Commercial Capital (7) 2)  Charter Shopping Center (13)

Shopping  Center  Development  and  Trend:  Top  25  Malls Shijiazhuang: 1)  Beiguo Commercial Building (12) Harerbin: 1)  Grand Shopping Center (20) Chengdu: 1)  Wangfujing Dept. Store (23) Shenyang: 1)  Zhongxing Commercial Building (24)

     Shopping  Center  Development  and  Trend:    

       -­‐  Floor  Plan  and  Brand  Mix  -­‐  Shin  Kong  Place  –  No.  1  in  BJ  and  No.  1  na;onwide Operator: Beijing Hualian Group

Floor Plan: B/1: supermarket, food court, H&B, local product F/1: cosmetics, luxury goods, coffee, shoes F/2: luxury fashion, ladies’ fashion and accessories F/3: international boutiques, young’s fashion F/4: casual & sports wear & shoes, men’s shoes F/5: electric appliances, Brand Mix: event hall kitchenware, Luxury brands: Gucci, F/6: restaurants Prada, Armani, Dior International boutiques: Coach, Michael Kors,

 Shopping  Center  Development  and  Trend:    

 -­‐  Floor  Plan  and  Brand  Mix  –  Grandview  Mall  –  No.  1  in  GZ  and  No.  2  na;onwide Operator: Zhengjia Group

Floor Plan: B/1: Flagship Supermarket F/M: Fashion Port F/1: Fashion Metropolis F/2: Tide world F/3: Colorful Life F/4: Charming City F/5: Colorful City F/6: Residence & Food F/7: Century Joy City

Brand Mix:

Well-known Fashion: H&M, Orchirly, CK, Guess, Bershka, Pull&Bear Selected, UR, GXG, Lily International Food : Taixing, Pizza Hut, DQ, Las Vegas Buffet, Ajisen Family Entertainment:

Shopping  Center  Development  and  Trend:    

-­‐  Floor  Plan  and  Brand  Mix  –  MixC  –  No.  1  in  Shenzhen  and  No.  5  na;onwide Operator: China Resources Land Ltd.

Floor Plan:

B/1: supermarket, fast food restaurants, H&B, watches F/1: luxury goods, car exhibition hall, banks F/2: luxury fashion, ladies’ fashion, watches & gifts F/3: fashion & accessories, shoes & bags, restaurants F/4: fast fashion, skating rink, movie theater, toys F/5: electric Brand Mix:appliances, international cuisines, Luxury brands: LV, fast and food court Dior,food MiuMiu, Prada, Armani, Dunhill, Bally, Cartier International boutiques:

Shopping  Center  Development  and  Trend:    

-­‐  Floor  Plan  and  Brand  Mix  –  Plaza  66  –  No.  2  in  SH  and  No.  14  na;onwide Operator: Hang Lung Properties

Floor Plan: B/1: men’s & ladies’ fashion, shoes & accessories, jewelry F/1: luxury fashion, shoes & accessories, jewelry, café F/2: luxury fashion, shoes & accessories, western cuisine F/3: luxury fashion, shoes & accessories, children’s wear F/4: fashion, underwear, children’s wear, audio/visual Brand Mix: F/5: international cuisines, Luxury brands: LV, Dior, H&B care, dental care Prada, Armani, Hermes, Tod’s, Fendi, Zegna, Dunhill International boutiques: UGG, Brooks Brothers, CK, Celine, Jimmy Choo,

Shopping  Center  Development  and  Trend:  Global  Harbor  

Shopping  Center  Development  and  Trend:  SH  K11  

Shopping  Center  Development  and  Trend:  Parkview  Green  

Shopping  Center  Development  and  Trend:  Global  Center  

Shopping  Center  Development  and  Trend:  Galaxy  Mall  

Shopping  Center  Development  and  Trend:  Chengdu   Wanda     Layout & Brand Mix

1/F

Wanda Department Store, ZARA, H&M, D&G, CK, Sephora ● Clothing 70% ● Boutiques 20% ● Restaurants 10%

Sephora: 377sqm

Boutiques Clothing

Commercial walking street area

Anchor Restaurants Escalator Lift Traffic flow Main entrance

V

Video location Video Line

30% of customer

G/F Second entrance

North Renmin Rd.

V

Shopping  Center  Development  and  Trend:  Chengdu   Wanda     Layout & Brand Mix 2/F

Wanda Department Store, Hot Wind, Spa, Chemist, Manicurist ●Clothing 66% ●Boutiques 22% ●Restaurants 12% Watsons Boutiques Clothing Restaurants Video Games

Commercial walking street area

Dept. Store

Escalator Lift Traffic flow Entrance

V

Video location

Tapenade

Video Line

Olivedesolive I

Tea shop

酷圣石

Shopping  Center  Development  and  Trend:  Xi’an  DMG  Wanda     Layout & Brand Mix

1/F

Wanda Department Store, Nautica, Citizen, Tissot, Levis, Lee ●Clothing 76% ●Others 19% ●Restaurants 5%

Dept. Store

 Clothing     Others

Starbucks    

Main traffic flow Lift Entrance

V  

Escalator    

Stairs

Entrance of Office

Video line

Video Location

Shopping  Center  Development  and  Trend:  Xi’an  DMG  Wanda     Layout & Brand Mix

2/F

Wanda Department Store, Hot Wind, Spa, Chemist, Manicurist ●Clothing 35% ●Experience 55% ●Restaurants 10%

Watsons Main traffic flow Lift V  

Video Location Video line Clothing Video Games Experience Stores Dept. Store

      Entrance

Escalator    

Children City

Restaurants    

Opportuni;es  and  Challenges  -­‐  Canadian  Retailers Opportuni;es:   •  Right time –transforming economy •  Right place – booming consumption •  Right people – growing awareness •  Right mix - seeking new brands •  Right platform – rising options Challenges:   •  More segmented markets •  Fast changing preferences •  Price sensitiveness •  Cultural differences  

Strengths  and  Opportuni;es  -­‐  Canadian  Developers Strengths:   •  Long history •  Rich experiences •  Solid knowledge •  Professional teams Opportuni;es:   •  Knowledge sharing •  Management skills transfer (JV) •  Leasing and brands enrichment

Thank  you Jeff Zhang [email protected]