Pop-up stores: an ideal business test bed
Pop-up stores have become increasingly popular in Shanghai and have appeared in more than 20 shopping malls in the city over the past year, according to research by real estate services provider RET.
Industry experts also suggested that this phenomenon is taking place because popup stores allow business owners to effectively test market response at a low cost.
Wang Zhonghai, a foreign products distributor, said that a pop-up store that is open for just one week in a major shopping mall in Shanghai is equivalent to a month’s worth of market research.
“As a brand distributor you get first-hand findings at a pop-up store. You will see what products, colors, packages and price ranges are most appealing to consumers. Such information helps a brand better prepare for entry into the China market,” said Wang, who has introduced a variety of Nordic brands related to home decorations, kitchenwares and tech gadgets to Shanghai.
Wan Xueting, a 25-year-old postgraduate student and amateur jewelry designer, had earlier this month opened her first pop-up store in Kerry Center, one of Shanghai’s most popular shopping malls located in the upscale Jing’an district.
Though her store was only opened for two days, Wan managed to rake in some 3,200 yuan ($463) in revenue. But it was not the relatively good sales figures that made her day — she said that the most rewarding aspect of running a pop-up store was the experience of being an entrepreneur.
“I have thought of selling my designs online, but I don’t have time to be on my laptop all day, responding to questions from buyers. I also don’t have the capital required to run a brick-and-mortar store. The pop-up store concept is hence a good option as it allows me to understand how the retail scene works and how to manage consumers. I don’t feel any financial pressure because the rent is affordable,” said Wan.
Albert Lau, CEO of Savills China, said that the pop-up store concept has been one of the drivers behind the rejuvenation of conventional shopping malls. He added that such temporary businesses are particularly suitable for products such as jewelries, accessories, toys and snacks that are easy to try and transport.
“For mall operators, setting up a pop-up store also serves as an incubator for future tenants. Pop-up stores that attract huge foot traffic are likely to be turned into permanent tenants,” said Lau.
Another reason behind the popularity of such stores is because they usually stock products, such as designer crafts and rare books, that are not usually seen in stores, which in turn makes for a more novel shopping experience.
“It feels as if you have a deadline for buying something at a pop-up store because it isn’t a permanent fixture. Also, finding something you like at a pop-up store is like an exciting treasure hunt,” said Zhang Chuhuan, 28-year-old Shanghai-based accountant.
For mall operators, setting up a pop-up store also serves as an incubator for future tenants.”
Chinese mainland tourists purchase goods at a luxury store in Hong Kong before the New Year. Hong Kong has been experiencing a decline in retail sales in recent years as tourists, especially those from the Chinese mainland, are spending less because of the territory's prohibitive prices in comparison with other countries.