While China’s luxury retailers have struggled to meet their goals in recent months, the country’s mid-range brands have continued to expand at a record pace, according to a new research report.
Leasing of retail space by fast-fashion brands such as Zara, H&M and Uniqlo has continued to expand in the world’s second-largest economy, despite an overall slowdown in economic growth. The ongoing strong performance by mid-range retailers was revealed in the latest China Retail Property Market Watch report released this week by property consultancy Knight Frank and local partner Holdways.
The report by the two agencies found that the leasing of space in shopping centres by these mid-market brands continued to grow in the second half of 2013. Furthermore, the study found no strong evidence of floor space is being reined in, while mega malls remained a strong feature of the retail landscape, particularly in Tier-Two cities.
Far from shrinking in size in the face of e-commerce, new fast-fashion stores are typically highly spacious, multi-level and take up some of the best locations in local shopping centres, according to the report’s findings. The rise of these brands as mini-anchors for emerging malls coincides with the demise of traditional anchors such as department stores.
While fast-fashion brands have fared well, not all market players met their goals in the second half of 2013.
The Knight Frank report found that developers lacking experience, particularly with oversized centres in peripheral, poorly located areas, found it increasingly find to maintain high occupancy levels and customer traffic. The agency expects this trend to continue to competition for consumers’ kuai intensififes.
The gap between prime centres and non-prime centres is also expected to widen in China, with the market becomingly marked by its increasingly polarity.
A report earlier this year by Knight Frank found that 65 percent of luxury retailers failed to reach their targets for new store openings in 2013.
The slowdown for couture sellers has been in contrast to the success of mid-range fast fashion brands, such as Uniqlo, Zara, H&M and C&A, which increased their total store count by 40 percent from mid-2012 to the end of last year.