Huai­hai: Chang­ing for a new world of shop­ping

China Daily (Canada) - - CHINA - By WU YIYAO in Shang­hai wuyiyao@chi­

Once the most pop­u­lar shop­ping street in Shang­hai, Huai­hai Road is un­der­go­ing ma­jor changes brought on by new re­tail strate­gies by stores and new de­mands from con­sumers.

“I have never seen so many fi­nal sale posters,’’ said Zheng Shuqi, a 56-year-old res­i­dent of the street. “This used to be one of the most pop­u­lar des­ti­na­tions in the heart of Shang­hai. This is such a pres­ti­gious lo­ca­tion, why would they with­draw?”

More than 20 stores have left the 1,000-me­ter-stretch be­tween South Chongqing Road and Si­nan Road, in­clud­ing wed­ding gown show­rooms, watch re­tail­ers, home­ap­pli­ance hy­per­mar­kets, and fast-fash­ion stores.

While some blame rock­et­ing rents for the va­can­cies, many an­a­lysts and mar­ket in­sid­ers say money isn’t the ma­jor con­cern for store ten­ants.

Ac­cord­ing to data from real es­tate agents Sav­ills China, the aver­age daily store rent at Huai­hai Road is be­tween 35 and 65 yuan ($5.61-$10.43) per square me­ter. Com­pared to that of East Nan­jing Road and Xu­ji­ahui, two re­tailer hubs in Shang­hai, the rent at Huai­hai Road is lower.

About 7 per­cent of the stores on the street are va­cant. The aver­age va­cancy rate for high streets in all of Shang­hai is be­tween 5 and 6 per­cent, ac­cord­ing to data from RET, a commercial property com­pany.

“For Huai­hai Road, the with­drawal of ten­ants re­flects the struc­tural trans­for­ma­tion of the re­tail en­vi­ron­ment for the high street, and it is in dire need to trans­form to meet cur­rent de­mands,” said Zhen Shiqi, di­rec­tor of re­tail ser­vices, DTZ China.

One rea­son for ten­ants leav­ing the stretch of Huai­hai Road is its dis­tance from pub­lic trans­porta­tion. It’s about a 10-minute walk from pub­lic trans­porta­tion to reach the stores.

The sec­tion used to in­clude the Ja­panese shop­ping mall Ise­tan, the Barbie Doll flag­ship store, and elec­tronic home ap­pli­ance re­tailer Me­di­aMart, along­side jew­elry and watch re­tail­ers.

The stores moved and re­lo­cated to other streets for var­i­ous rea­sons, in­clud­ing low sales rev­enue caused by on­line shop­ping and changes in their re­tail strate­gies.

Wu Hesh­eng, head of Shang­hai Huai­hai Commercial (Group) Co Ltd, which leases many stores at Huai­hai Road, said that ten­ants mov­ing in and out of the street is a cy­cle that ev­ery high street ex­pe­ri­ences.

“Stores come and go in line with their strate­gies. Some move to on­line sales, some move to sub­ur­ban ar­eas and some move away to shun near­brush com­pe­ti­tions,” said Wu.

Some brands are in­ter­ested in mov­ing in, but they may move af­ter the core ten­ants do, said Wu.

“Now the mid­dle sec­tion of Huai­hai Road needs new brands and stores that serve as mag­nets to shop­pers,” said Zhen.

Some stores re­main pop­u­lar among lo­cal res­i­dents. El­derly shop­pers still line up at Guang­ming­cun, a food store that sells lo­cal snacks and fa­mous dishes such as fresh pork moon­cake; People need to el­bow their way into a sales event at silk and cloth­ing stores. And in the cold of win­ter, con­sumers get up early to get into the herbal medicine stores.

“You can tell who are miss­ing from the mid­dle part of street — the young con­sumers who have mas­sive pur­chas­ing power and are will­ing to spend on what­ever they love,” said Zhen, point­ing out that the mid­dle part of the Huai­hai Road needs to en­hance its charm for those shop­pers.

The street needs to im­prove its pub­lic traf­fic ac­cess and park­ing, said Zhang Xiaolu, a 26-year-old con­sumer who com­plained that it’s too diffi to find a park­ing lot at Huai­hai Road.

“The time when people would walk for a long time to get to a store has passed. Now we take sub­ways or drive when we want to go shop­ping. If there is too much trou­ble to get to a shop­ping area, we’d rather buy on­line,” said Zhang.

District of­fi­cials said the empty-store pe­riod will not last be­yond the end of this year, as au­thor­i­ties and de­vel­op­ers have been de­vel­op­ing new mod­els for the high street, in­clud­ing pop-up stores, spa­ces that can be leased by ten­ants for as short as three months.

“Re­tail­ers can make full use of the three-month pe­riod to show­case their prod­ucts and ser­vices as a way to pro­mote to con­sumers, un­like pre­vi­ous con­tract terms that had to be at least three years’ long. The new model is more flex­i­ble and will at­tract con­sumers who are cu­ri­ous about new brands,” said Yuan Geping, deputy head of Shang­hai Huai­hai Commercial (Group) Co Ltd.

Din­ing fa­cil­i­ties will also take up a larger part of the down­town high street. A new shop­ping mall that is re­plac­ing the Ise­tan shop­ping mall will de­vote half its space to din­ing, ac­cord­ing to Cui Zhengyu, spokesman of the new project called Yang­guang Xinye.

“It’s quite clear that Huai­hai Road is not com­pet­ing with other streets. It is com­pet­ing with other commercial mod­els, such as e-com­merce and sub­ur­ban com­mu­nity commercial hubs, and we have taken mea­sures to at­tract con­sumers and stores alike back to the street,” said Zhang Jie, head of Huangpu district commercial com­mit­tee, the au­thor­i­ties who watch over de­vel­op­ment of the street.

Free WiFi and more con­ve­nient park­ing ser­vices will be pro­vided to the pub­lic at Huai­hai Road by Au­gust, he said.


Shang­hai’s Huai­hai Road is un­der­go­ing ma­jor changes brought on by new re­tail strate­gies and con­sumer de­mands.

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