Is It Possible For Traditional Department Stores To Transform Into Shopping Centers?

IMall, a professional research firm at the shopping center, has released a report on the development and forecast of China's department stores. Data show that 17% of traditional department stores have begun to turn to shopping centers, while in the nationwide department stores, the proportion of transformed shopping centers is as high as 42%.

towards Shopping Mall There are many department stores in transition. The focus of the billion euro network is Wangfujing department store. Wangfujing has set up a career development center in 2011. Since 2013, Wangfujing has begun to "go to the department store format", focusing on developing shopping centers and Oteri J. In February 2013, Wangfujing bought spring department store for 1 billion 600 million yuan, while the latter had two Oteri J stores in Shenyang and Beijing. In September 2014, Taboman co operated with China's Wangfujing department store and launched the CityOn shopping center. In 2015, Wangfujing and Hengda Real estate jointly established a shopping center management company.

According to the "2014 China convenience store development report", sales of department stores in 100 enterprises in 2013 increased by 9.6% overall, while that in large supermarkets and supermarkets increased by only 8.7%, while sales of convenience stores represented 18.2% of growth in retail sales. Convenience stores are slowing down in China as a whole. Retail One is thriving, and more and more formats begin to embrace convenience stores.

The earliest convenience store of traditional department stores was VanGo of Huarun Wanjia banner. In 2015, Huarun announced for the first time the planning of small format development, and opened 30 new VANGO convenience stores. In addition, Tianhong shopping mall is also a typical representative of convenience stores transformed by department stores. In July 2014, Tianhong mall officially entered the convenience store industry, and named the first convenience store as "micro Oh". In December 2014, Tianhong mall acquired 100% stake in Shenzhen Wan Dian Tong for 29 million 90 thousand yuan, the latter being a chain convenience store operator, which enabled the Tianhong mall to add 153 Direct stores and join convenience stores.

In November 12th of this year, the modern network made by Guangzhou modern department store entered into strategic cooperation with CITIC property, announcing that the experience shop was set up under its real estate market, and officially entered the community market. Prior to this, Guangzhou District wide store, old treasure store and other stores have opened convenience stores.

Most department stores have supermarket formats, and convenience store products are sold in supermarkets, thus helping to facilitate low cost and comprehensive product structure in convenience stores. But this advantage is Transformation China may not be able to play it. Convenience stores can't be as big as a hypermarket or department store. Knowing how to choose the right varieties according to the consumption characteristics is the biggest test for operators. Operators should consider how to make the goods achieve a high premium. In addition, if the convenience store is a chain operation, it must also consider the strategy of the medium and long term strategy.

In addition, WAL-MART and BBK also invested heavily in shopping centers: in October 2015, WAL-MART announced that it had invested more than 600 million yuan to build an international shopping center in Nanchang. BBK's 2011 Annual report shows that the development of department stores in the form of shopping centers has been included in the development strategy of BBK. BBK group Wang Tian has revealed that it will open 40 shopping centers in five years, with a total investment of about 5 billion yuan.

However, the transformation of shopping centers in department stores also faces risks: from the inside, the new format will test the operation capacity of department stores. Traditional department stores make profits through the sharing of private income, while shopping centers earn profits through the rental income of subleasing property, and shopping centers have very high requirements for operators. Externally speaking, the transformation of shopping centers and other formats is the common choice of most department stores. The number of shopping centers will increase significantly in the short term, and there will be fierce competition and overcapacity.