Real estate consultancy Jones Lang LaSalle released a white paper today sees China’s booming ecommerce sector undermining many of the country’s low-end malls, and leading to still higher demand for warehouse space.
The paper, E-commerce in China: Online is the New Black, examines the challenges and opportunities for China’s real estate sector created by the rise of e-commerce, as well as proposing ways that developers and operators can best take advantage of the new market landscape.
The company foresees risks for some segments of China’s retail market from the rapid growth of ecommerce, particularly at the low-end of the mass market, with many lower-end malls expected to lose customers to online shopping.
Meanwhile, the e-commerce market’s structural reorientation towards business-to-consumer (B2C) platforms makes the logistics sector the most attractive real estate opportunity in China.
The report identifies several major trends in China’s real estate market caused by the shift to online purchasing:
- The rise of e-commerce will hasten the decline of the mass-market strata-titled shopping mall
- Wholly owned malls can adapt and succeed by reorienting their tenant mix and mall design around entertainment, services and other experience-related offerings
- A shift towards more business to consumer (B2C) e-commerce means huge distribution centre requirements
- Opportunities exist for mutually beneficial partnerships between logistics property developers and large e-commerce firms
The full paper is attached to this post, so please enjoy: E-commerce in China: Online is the New Black