The trans­for­ma­tion of shop­ping

China Daily (USA) - - SHANGHAI THE BUND - By CAO CHEN in Shang­hai [email protected]­

Women dressed in el­e­gant qi­pao and high-heels with dainty bags in their hands stand in front of a green and white liv­ery tram along Shang­hai’s Nan­jing Road, col­or­ful neon signs flick­er­ing in the back­ground.

But noth­ing in this scene is ac­tu­ally real. The women are card­board fig­ures. The tram is a replica. The scene is ac­tu­ally set above ground and in­doors, within a chic new space called Lane 100 that is lo­cated on the sev­enth floor of No 1 Shop­ping Cen­ter on East Nan­jing Road, a well­known shop­ping area in the coun­try.

“It’s thrilling to see pop­u­lar ne­ces­si­ties from the 1900s here, in­clud­ing enamel mugs, old-school Chi­nese post­man’s bikes and man­ual sewing ma­chines,” said Ke Xiao­jie, a Shang­hai res­i­dent in her 50s.

“I also love the brick and mor­tar shiku­men-style wall de­sign, and how the tunes of Shang­hai Nights (a clas­sic song of old Shang­hai) are be­ing played in the back­ground, call­ing back my child­hood mem­o­ries.”

Ded­i­cated to the ex­hi­bi­tion of nos­tal­gic goods, Lane 100 is just one of the new of­fer­ings in the mall which was re­opened in Novem­ber af­ter 18 months of ren­o­va­tion. The makeover project saw the old No 1 Shop­ping Cen­ter merge with the for­mer Ori­ent Shop­ping Cen­ter just across Li­uhe Street.

The move is aimed at draw­ing younger con­sumers, as ev­i­denced by the dras­tic change in fea­tured brands. Ac­cord­ing to the mall op­er­a­tor, more than 70 per­cent of the old brands that were once lo­cated in the two malls have been re­placed with those cur­rently in vogue. Mean­while, the food and bev­er­age op­tions have been in­creased from 20 to 38 per­cent, while more space has been al­lo­cated for life­style ameni­ties such as hair sa­lons, ex­hi­bi­tion zones and child care cen­ters.

Ac­cord­ing to Fan Liqun, the man­ager of the shop­ping cen­ter, the av­er­age age of its con­sumers has dropped by about 20 years. To­day, the ma­jor­ity of those who visit the mall are aged be­tween 20 and 45.

For­merly known as Da Sun De­part­ment Store, this 82-year-old mall has like its many peers in the city em­braced the sweep­ing changes to the re­tail sec­tor, trans­form­ing it­self into not just a re­tail hub but a life­style cen­ter that is fo­cused on pro­vid­ing real-time ex­pe­ri­ences for con­sumers.

“No 1 Shop­ping Cen­ter used to be the mall with the high­est sales for 14 con­sec­u­tive years in Shang­hai,” said Fan.

“But this tran­si­tion it has un­der­gone is ob­vi­ously in­evitable in this day and age. The ren­o­va­tion rep­re­sents a new evo­lu­tion of tra­di­tional de­part­ment stores as they try to adapt to the new re­tail­ing era.”

Ac­cord­ing to Song Zuanyou, a for­mer re­searcher at the In­sti­tute of His­tory in the Shang­hai Academy of So­cial Sciences, de­part­ment stores only be­came pop­u­lar around the world in the 1800s fol­low­ing the found­ing of Le Bon Marche in Paris, France, in 1838.

How­ever, Shang­hai was largely iso­lated from this trend un­til the 1900s when the city’s econ­omy made great strides for­ward due to rapid in­dus­trial de­vel­op­ment.

“Dur­ing this pe­riod, peo­ple be­came wealth­ier and had more pur­chas­ing power. This meant that the smaller stores they used to shop at were un­able to meet their grow­ing de­mands,” said Song.

The first de­part­ment store in Shang­hai was built in 1906. Es­tab­lished by the for­eign com­pany White­away, Laid­law & Co and lo­cated on Nan­jing Road, the five-story build­ing fea­tured more than 20 brands. How­ever, the store did not make much of an im­pact in the lo­cal scene as most of its of­fer­ings were im­ported goods catered to the ex­pa­tri­ate pop­u­la­tion.

In 1917, the Sin­cere De­part­ment Store was founded in Shang­hai by the Sin­cere Com­pany Lim­ited. While this de­part­ment store also sold pricey global goods, it stood out from the store by White­away, Laid­law & Co by in­tro­duc­ing new func­tions to the space, such as en­ter­tain­ment op­tions, of­fices, ho­tels and a rooftop gar­den.

Lu Yongyi, a pro­fes­sor from the school of ar­chi­tec­ture at Tongji Uni­ver­sity, once said at a sem­i­nar in 2016 that the Sin­cere De­part­ment Store was “a unique model that laid the foun­da­tions for all shop­ping malls in the city”.

Fol­low­ing the suc­cess of Sin­cere, Wing On and Sun Sun de­part­ment stores en­tered the mar­ket a few years later. This trio of re­tail en­ter­prises dom­i­nated the lo­cal mar­ket for many years to come.

But the en­try of the Da Sun De­part­ment Store in 1936 broke this mo­nop­oly. Es­tab­lished with an ini­tial cap­i­tal of HK$4 mil­lion, the 10-story Da Sun De­part­ment Store was equipped with OTIS es­ca­la­tors, a heat­ing and cool­ing sys­tem and un­der­ground stores, were firsts in China.

“I still re­mem­ber that dur­ing my days in ju­nior high school in the 1970s, peo­ple would go to the mall just to see the es­ca­la­tor,” said Lao Guol­ing, a 54-year-old Shang­hai na­tive.

“Dur­ing the two decades I spent liv­ing in my grandma’s home on Nan­jing Road, hang­ing out at Da Sun De­part­ment store was my af­ter­school rit­ual,” she added.

De­spite the on­go­ing con­flict dur­ing the War of Re­sis­tance against Ja­panese Ag­gres­sion (1931-45), busi­ness at de­part­ment stores boomed as a large num­ber of for­eign­ers sought shel­ter in Shang­hai and set­tled in the in­ter­na­tional set­tle­ment and the for­mer French Con­ces­sion.

“A new round of trans­for­ma­tion for de­part­ment stores oc­curred af­ter the war when lo­cals who needed high qual­ity but af­ford­ably priced goods all of which drove de­mand in the city,” said Lao, who is also the di­rec­tor of the E-com­merce Re­search Cen­ter at Shang­hai Uni­ver­sity of Fi­nance and Eco­nomics.

Af­ter the found­ing of New China in 1949, Da Sun De­part­ment Store was re­placed by No 1 Shop­ping Cen­ter which of­fered more lo­cal prod­ucts to con­sumers.

The de­part­ment store in­dus­try in Shang­hai en­joyed steady growth till the end of the 20th cen­tury when it was buoyed by na­tional ini­tia­tives such as the Shang­hai Ur­ban Mas­ter Plan which re­sulted in rapid ur­ban­iza­tion across the city.

“Most res­i­dents pre­ferred to stay around the cen­tral Huangpu dis­trict in the past be­cause the sub­ur­ban ar­eas did not have much ameni­ties. But peo­ple were grad­u­ally able to live across the city be­cause of the im­prove­ment in liv­ing con­di­tions,” said Wang Xudong, a Shang­hai na­tive.

To serve the pop­u­la­tion of these newly ur­ban­ized ar­eas, mas­sive shop­ping malls in­stead of de­part­ment stores were added to the land­scape. These fa­cil­i­ties, such as the Su­per Grand Mall in Pudong New Area and Grand Gate­way 66 in Xuhui dis­trict, com­bined so­cial, com­mer­cial and recre­ational of­fer­ings un­der one roof. Tra­di­tional de­part­ment stores in cen­tral Shang­hai had in com­par­i­son be­come one-di­men­sional.

By 1999, busi­ness zones in the city hit 20 mil­lion square me­ters, al­most quin­tu­pling the fig­ure in 1990, ac­cord­ing to Chao Gan­gling, busi­ness school pro­fes­sor at Shang­hai Uni­ver­sity of Fi­nance and Eco­nomics. How­ever, the num­ber of small- and mid-range de­part­ment stores had de­creased by more than a half. This sit­u­a­tion was ex­ac­er­bated in the mid-2000s when e-com­merce emerged.

“It’s con­ve­nient when shop­ping is sim­ply about mak­ing a few clicks on the mouse. And then there’s also the al­lure of dis­count coupons and de­liv­ery ser­vice,” said Chao, who is also the vice-chair­man of the Shang­hai Busi­ness Eco­nomics So­ci­ety.

Ac­cord­ing to the Na­tional Bureau of Sta­tis­tics, the over­all size of the na­tion’s on­line re­tail sec­tor was 7.18 tril­lion yuan ($1.05 tril­lion) last year, a rise of about 32 per­cent from the pre­vi­ous year.

But de­spite talk about how brick and mor­tar re­tail busi­nesses might face ex­tinc­tion in the face of e-com­merce, Chao be­lieves there will al­ways be a place for off­line shop­ping.

“The unique as­pect of a mall is the ex­pe­ri­ence you get from spend­ing time din­ing, play­ing or even learn­ing. This ex­pe­ri­ence is some­thing e-com­merce can­not of­fer,” he said.

“There is no need to ‘fight against’ e-com­merce. It’s about giv­ing full play to off­line ad­van­tages,” he added.

The cur­rent re­tail trend sup­ports this sen­ti­ment. Old de­part­ment stores are be­ing trans­formed into new malls that of­fer a blend of re­tail and ex­pe­ri­en­tial of­fer­ings.

For ex­am­ple, the for­mer Ori­ent Shop­ping Cen­ter along Huai­hai Road was turned into a mall that fea­tures the world’s largest flag­ship stores for Un­der Ar­mour and Muji.

The Pa­cific De­part­ment Store along the same road, which was shut down in 2016, has been trans­formed into the new Xin­tiandi Plaza which is slated to open at the end of this year. The new space will fea­ture a host of top global brands, pop­u­lar restau­rants, and an area ded­i­cated to art shows and tech­nol­ogy ex­hi­bi­tions. There will also be two rooftop out­door gar­dens over­look­ing the bustling area.

Some branches of tra­di­tional stores in Shang­hai, like Prin­temps De­part­ment Store, New World De­part­ment Store and Ori­ent Shop­ping Cen­ter have also sought to stay rel­e­vant in these modern times by in­tro­duc­ing new spa­ces for pub­lic events, din­ing, ed­u­ca­tion and en­ter­tain­ment.

Shang­hai had an­nounced a three­year plan ear­lier this year to build the four brands of the city — ser­vices, man­u­fac­tur­ing, shop­ping and cul­ture — to be­come a shop­ping hub that will of­fer the world’s trendi­est and most value-for-money prod­ucts.

The city is also plan­ning to cre­ate two world-class shop­ping streets, 10 lo­cal first-class core busi­ness dis­tricts, and 20 spe­cial shop­ping dis­tricts by 2020.

The re­vi­tal­iza­tion of 50 brands with Shang­hai char­ac­ter­is­tics and 50 time-honored brands is also a ma­jor part of the project. Tra­di­tional stores that are clas­sic icons of Shang­hai so­ci­ety, said Chao, will take the lead in this trans­for­ma­tion process.


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