With the easy profits of China’s housing boom dwindling into memory, the country’s biggest homebuilder by sales is turning to the already crowded retail real estate sector for profits.
However, China Vanke seems to have learned some lessons from competing in the housing market, and is turning to an alliance with high tech giant Baidu to give it an edge in creating “intelligent” malls that will give shoppers more of what they want, and help retailers become more efficient.
At an event in Beijing last week attended by more than 300 representatives of retail brands, Vanke president Yu Liang, together with vice president Mao Daqing were joined by Baidu vice president Dongchen Zhang in announcing a new joint initiative to use location-based services in creating a “consumer-business operator ecosystem” in more than 20 malls to be built by the Shenzhen-based developer.
Making Malls That Study Your Shopping
By using Baidu’s location-based services, the two companies hope to use the travel patterns and activities of shoppers to target offers at consumers and analyse behavior patterns using big data.
Commenting on the new partnership, Baidu’s Zhang said, “Baidu and China Vanke already share many of the same customers, and we hope to take good care of these customers through technology.”
As examples of the how the intelligent malls would work, the tech executive explained that by leveraging location-based services, Baidu’s maps could tell customers how to get to the shopping centre, what products are available in which stores, and how to find the best deals. The high tech malls could also tell consumers where to find parking and analyse shopper behavior throughout the retail experience.
According to a report in the China Daily Economic News, Vanke plans to launch new malls in Wuhan, Foshan, Dongguan and eight other cities this year, eventually building a portfolio of 20 shopping centres. The company opened its first shopping mall last December in Beijing’s Changping district.
Beyond its partnership with Baidu for the intelligent mall technology, the Shenzhen-based developer said that it has joined forces with retailers representing more than 40 domestic and international brands, including China Resources Retail Group and CJ Corp.
Malls Part of Vanke’s Diversification Plan
Although ambitious by themselves, Vanke’s retail plans are part of a much broader effort to diversify by the company that made its name in middle-class housing in China.
Besides the retail projects, Vanke announced its second overseas investment earlier this year when it broke ground on a 61-storey luxury residential project in Manhattan.
Also this year, the developer announced plans to begin building privately-owned hospitals, as well as its ambitions to become the country’s second-largest logistics developer through a partnership with US private equity firm Blackstone.