5 Things I Learned at Mapic’s Shanghai Retail Event

If China’s retail market is doomed, then the people in charge of opening new stores and building new malls don’t yet know about it, as more than 180 of them showed up today to attend the Retail Real Estate Market Shanghai conference. The industry event, which was billed as “powered by MAPIC,” the successful retail conference in France was held in China for the first time.

Reed Midem, which also puts on the MIPIM and MAPIC real estate events in Europe organised today’s gather as their debut act in mainland China, after already establishing their annual MIPIM event in Hong Kong.

Attending the event were a number of top industry executives representing both international and domestic retailers, as well several mall developers and investors.

Here are a five quick take-aways from today’s session:

1. Expansion Isn’t Over for Mango

While many retailers have reportedly scaled back their China expansion plans, at least some brands still see room for more shops in China.

“We have 150 stores in the region, which for China is nothing,” David Sancho Grau, CEO of Mango China, told the conference attendees.

According to the fast fashion executive, the major challenge in China is making sure that the mall is professionally managed.

2. Italians Aren’t Afraid of O2O

Online to offline has been said by some analysts to be a major problem for traditional retailers, as customers pay for their purchases online, but could start using physical shops as mere pick-up points.

But for Mario Manna, Country Manager Far East, for Italian men’s wear brand, Camicissima, bricks and mortar stores aren’t going away anytime soon.

“People spend a lot of time trying things on in the store,” the retail executive told the audience. “Online will never replace the shopping experience,” he added.

3. China’s Just Not the Same in 2015

Belgian confectioner Neuhaus Chocolates has over 150 years of history but the leader of this European brand’s China expansion says understanding China’s rapid change is key

“Lifestyles have changed completely, and consumers have more opportunities now than five years ago,” Frederic Linkens, Development Manager for Greater China told the conference-goers.

Life is also different for brands choosing locations. “There are more shopping centres available now too (than there were five years ago),” Linkens said. “The challenge for brands is choosing the right one.”

4. Most Chinese Shoppers Don’t Shop

China’s retail spending may still be growing in double digits, but most mall visitors leave without any purchases in their hands, even if they do have less money in their wallets when they walk out the door.

“Most shoppers in Chinese malls don’t want to shop,” Gergely Bodo, Head of retail leasing, with European developer Trigranit told the audience. “They want to eat, and they want to escape the other parts of their lives.”

Last November Budapest-based Trigranit announced that it had formed a joint-venture with a Beijing-based company to provide property management services to malls in China.

5. F&B is the Key

Food is a big part of Chinese culture, but getting the right mix of restaurant offerings can be key to survival for malls in China.

“F&B is the key to success,” Christian Recalcati, Managing Director for China with Italian developer Larry Smith Italia told the attendees. “Food and beverage outlets must be used for leverage in attracting more people to a shoppping centre,” he added.

The event, which will continue on Friday the 12th, brought together retail developers, brands and investors from Asia, Europe and North America for a series of panel discussions and presentations regarding the prospects for China’s retail environment and retail real estate development.

In case any of you will be in Singapore next week, I will be participating in the Real Estate Investment World conference there as well. At REIW, I’ll have the honor of chairing the first half-day session of the conference on Tuesday the 16th, which targets partners in investment funds, as well as heading up the final day of the event on Thursday.

If you’re in the island nation, I look forward to seeing you then, and I promise to keep you posted on this and any other industry events in the region.