Bricks-and-mor­tar plus set to trig­ger newlifestyle

China Daily (Canada) - - BUSINESS - By MAZHIPING

Re­cent re­ports that a new plaza of­fer­ing a 24-hour shop­ping ex­pe­ri­ence is en­joy­ing brisk busi­ness in an eastern city has led me to ex­pect that more such bricks-and-mor­tar out­lets will spring up in other cities.

The Taihe Plaza, built at a cost 2 bil­lion yuan ($299 mil­lion) and cov­er­ing 1.5 mil­lion square me­ters in Fuzhou, with a pop­u­la­tion of 6 mil­lion and cap­i­tal of Fu­jian prov­ince, re­ceived 2 mil­lion cus­tomers in the first three days of its open­ing in late 2015 and is at­tract­ing an av­er­age 100,000 cus­tomers a day.

De­signed as a world-class com­pre­hen­sive shop­ping cen­ter cater­ing to cus­tomers of all ages, pro­vid­ing top brands and a rich va­ri­ety of leisure prod­ucts and ser­vices, its im­mer­sive shop­ping en­vi­ron­ment and busi­ness model may give in­spi­ra­tion to the tra­di­tional do­mes­tic re­tail in­dus­try, which is strug­gling to sur­vive.

I would like to see this busi­ness model trig­ger­ing a newlifestyle for ur­ban res­i­dents in China.

Though more peo­ple are em­brac­ing e-com­merce and be­com­ing big spenders on­line, I be­lieve the ma­jor­ity of con­sumers, my­self in­cluded, have a deep-rooted pas­sion for bricks-and-mor­tar shop­ping, which of­fers a zero-dis­tance ex­pe­ri­ence of touch­ing, feel­ing, tast­ing, smelling, and nat­u­rally wear­ing the prod­ucts.

I would like to spend part ofmy week­ends buy­ing things, win­dow shop­ping or drink­ing cof­fee at a bar with nos­tal­gic back­ground mu­sic at a place like the Taihe Plaza, which has ar­rested the hearts of many ad­dicted on­line buy­ers with its com­pre­hen­sive shop­ping ex­pe­ri­ence, ac­cord­ing to lo­cal re­ports.

But maybe it is still early for the Taihe Plaza to call it­self a world­class out­let.

Some com­mer­cial out­lets in de­vel­oped coun­tries, such as the NewYork’sHer­ald Square, have ac­tu­ally be­come life­style cen­ters. Apart from pro­vid­ing com­pre­hen­sive prod­ucts and ser­vices, in­clud­ing en­ter­tain­ment, mu­sic bars, book­stores, hair­dressers and restau­rants, they have also adopted on­line-to-off­line modes, or O2O, and vir­tual-re­al­ity and aug­ment­e­dreal­ity tech­nolo­gies, which en­able their cus­tomers at the shop to view and even “wear” all the prod­ucts of a cer­tain brand.

By con­verg­ing with e-com­merce and lat­est tech­nolo­gies, bricks-and­mor­tar stores can sur­vive the in­ten­si­fy­ing com­pe­ti­tion with ecom­merce. About 700 mil­lion Chi­nese ur­ban­ites, one-third of them mid­dle class, will welcome such con­ver­gence.

Also, the cen­tral gov­ern­ment has ini­ti­ated a pol­icy for so­cial in­sti­tu­tions and com­pa­nies to en­sure that their staff can fully enjoy their an­nual va­ca­tions, cre­at­ing more leisure time and de­mand. Th­ese con­di­tions will make peo­ple thirsty for new style week­ends that com­bine shop­ping and en­joy­ing var­i­ous ser­vices.

The boom­ing of e-com­merce is blamed for the bank­ruptcy of thou­sands of big and small phys­i­cal stores or shop­ping malls, in­clud­ing over­seas re­tail brands.

A 2012 CCTV de­bate on e-com­merce be­tween JackMa, chair­man of e-com­merce gi­ant Alibaba GroupHold­ing Ltd, andWang Jian­lin, chair­man of DalianWangda Group, China’s lead­ing prop­erty de­vel­oper and re­tailer, high­lighted the fight that is go­ing in depth be­tween e-com­merce and tra­di­tional re­tail­ing.

Ma said e-com­merce will make up 50 per­cent of the coun­try’s re­tail sales by 2020, whileWang said he would bet 1 mil­lion yuan thatMa is wrong.

How­ever, ac­cord­ing to me­dia re­ports, both of them have made much greater ef­forts to de­velop e-com­merce. On the other hand, both have un­veiled plans and are build­ing newof­fline sales mod­els to of­fer cus­tomers a new­shop­ping ex­pe­ri­ence.

Of­fi­cial statis­tics show on­line re­tail sales, at 4 tril­lion yuan in 2015, are still far be­hind the tra­di­tional re­tail in­dus­try, which racked up 38 tril­lion yuan. Yet, I am­sure e-com­merce will catch up quickly, as the con­ver­gence of the in­ter­net with nearly all in­dus­tries is ac­cel­er­at­ing fast.

So it is highly pos­si­ble that there won’t be a loser in theMa-Wang bet. In­stead, both of them will be win­ners as the re­tail sec­tor has en­tered an era of in­te­grated busi­ness mod­els.

Ad­dress­ing an in­ter­na­tional expo on big-data in­dus­try in Oc­to­ber, Ma of Alibaba said the life of hu­mankind will be full of mar­velous things in the com­ing 30 years.

That cer­tainly will in­clude new cre­ative re­tail­ing mod­els that will fur­ther rev­o­lu­tion­ize our shop­ping life­styles with end­less joys and ben­e­fits.

Con­tact the writer at mazhi ping@chi­nadaily.com.cn

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