Home  Contact Us
  Follow Us On:
 
Search:
Advertising Advertising Free Newsletter Free E-Newsletter
Magazine
  
      2024       2023       2022       2021       2020       2019       2018       2017       2016       2015       2014       2013       2012       2011       2010       2009       2008

REAL ESTATE: Tianjin retail market, Bigger and better, more about experience, less about shopping
Share to

Tianjin retail market

Bigger and better, more about experience, less about shopping

By Lesley Chai, Senior Analyst at JLL Tianjin Research


BT 201604 090 27 Real EstateThe Tianjin retail market experienced many changes during 2015. Five department stores closed, including Far Eastern, Parkson and LaVita, making people concerned about the retail market. However, another five shopping malls completed and entered the market in the same year. If we compare the stock change - 200,000 sqm of department store space withdrawn and more than 500,000 sqm of new shopping mall supply space added - it shows two basic truths. First, the retail market in Tianjin keeps expanding and developing and second, shopping malls play a more important role in the retail market. For clarity, department stores are largely run by a single operator such as Lotte, Isetan or Robbinz, with merchandise arranged by category such as men's or women'€™s clothing and brands less clearly separated, whereas most malls are larger, generally have brands physically separated into different stores and have more common space and entertainment elements.


In addition to total stock of retail space growing, the average size of individual malls is also growing. By end-2015, the average GFA of the 25 shopping malls we track in Tianjin was 90,246 sqm, larger than the average Gross Floor Area (GFA) in 4Q12, which was 89,681 sqm. As more large projects, such as SM City Tianjin, come on to the market, we forecast that by 4Q18, the average size of a shopping mall will reach 105,212 sqm.


Growing retail sales, disposable income and increasing retailers' demand have resulted in international developers focusing on Tianjin as a market to develop malls. Foreign developed projects will account for 42% of the stock by end-2018, versus the current 24%. The increase of new developers and the emergence of e-commerce will mean an increasingly competitive retail market.


We looked at a sample of 12 of the newer malls to see if we could see any trends in tenant mix and how these new malls are positioning themselves. The results are below:BT 201604 090 24 Real Estate

Source: JLL, Research Tianjin, 4Q15


Tenant types:

The top four categories together accounted for 84.3% of space in the malls we examined.

  • Food & beverage (F&B), fashion, household and entertainment were the top four categories in terms of occupied space.


These results reflect much of how malls work today, these larger formats focus on getting shoppers into the malls and hopefully offering a range of activities that will encourage them to spend longer there. There are places to eat, things to entertain and locations to shop for a range of products.


To increase shoppers' spending at malls, landlords still need to rely on fashion stores and other sectors such as accessories, beauty and jewellery. Although the effects of online shopping affected the fashion sector the most, the sector still accounts for 23.9% of space, making it the second main tenant category in shopping malls.



Entertainment

Entertainment plays an important role in being both an anchor for the mall to get shoppers through the door, but also to give them a reason to stay longer. Of the 12 malls in our sample, 11 had cinemas and five also had ice rinks. Additional entertainment anchors included kids' activity centers, KTVs and video arcades.


With so many malls having entertainment elements, that alone will be not be enough to differentiate. Joy City, the popular shopping mall achieved the highest retail sales in 2015 and has both fashion and F&B as well as some entertainment anchors, including an ice rink and a cinema, but the landlord also pays attention to adding new, creative theme blocks. Three of these have included areas known as Cheer Market, No. 5 Parking and IF Street which opened in rapid succession and offered interesting designs or multiple small brand formats that not only gave shoppers a unique shopping experience, but helped produce free publicity for the mall and helped set it apart from its competition.


Other findings included:

  • Accessories, electronics, beauty and jewellery tenants take up less space in malls.
  • More jewellery and beauty brands open stores in traditional department stores, as target customers for jewellery are older people who prefer shopping in department stores; beauty brands, however, lose some young shoppers to online shopping and shopping overseas, which are becoming more everyday occurrences.
  • Beyond these nine main categories, 6.6% of occupied space was leased to kids'€™ related stores that fell into the various other categories. Being a specialist in kids related brands has also become somewhat of a selling point for some malls.

BT 201604 090 25 Real Estate

Source: JLL, Research Tianjin, 4Q15

Fashionable or Practical

We often hear that all of the malls look alike, but our analysis of our sample malls shows they fit into at least two main categories. The malls that most people think of first (Galaxy Mall, Joy City, Riverside 66 and also iShine City) are focused on fashion, with around one third of their space dedicated to this tenant type. Whereas mall located in more residential areas (Aeon Meijiang, Delight City and Wanda Hedong) have a large portion (nearly 40%) of their space dedicated to household goods retailers such as Vanguard and Suning.
BT 201604 090 26 Real Estate

Source: JLL, Research Tianjin, 4Q15


This also highlights that even though there has been an increase in malls, with different tenant mixes, they will appeal to different customers types so actually not all malls are competing with all other malls. There may be some winners and losers when it comes to fashion, but there is ample room for many different residential neighborhoods to have their own 'local'€™ mall emerge to deliver basic services and a quick weekend meal.


Outlook

Based on the new mall openings over the past few years and the pipeline of more to come, we expect a couple things to happen. We expect most Tianjin residents will find a mall near their home that has the basics and becomes their regular location for standard retail purchases. We also expect to most consumers to find one or two malls to become their destination shopping location when it comes time to find the newest brands or visit a new brand. There will continue to be a great deal of competition between malls, but there is still plenty of room for a number of players to dominate specific geographies and specific niches within the Tianjin market.


---END---

    Subscription    |     Advertising    |     Contact Us    |
Address: Magnetic Plaza, Building A4, 6th Floor, Binshui Xi Dao.
Nankai District. 300381 TIANJIN. PR CHINA
Tel: +86 22 23917700
E-mail: webmaster@businesstianjin.com
Copyright 2024 BusinessTianjin.com. All rights reserved.