Suning Signs Deal to Open 40 Shops in Wanda Malls

Two of China’s retail giants surprised the market today with the announcement of cooperation agreement the calls for electronics seller Suning to open 40 new shops in Dalian Wanda’s malls in the next four months.

The two companies indicated that more Suning outlets would be opening in billionaire Wang Jianlin’s Wanda plazas in the years to come.

The cooperation agreement brings together two Chinese firms that are under increasing pressure to reinvent themselves as the country’s investment boom slows down. Wanda announced in July that it would close 120 of its own retail venues nationwide, at the same time that it has set a target of opening 900 more malls in the next ten years.

Wanda Searching for New Anchors as it Shoots for 1000 Malls

Wanda’s deal with Suning could help to provide a major new tenant for a company that has a lot of space to fill.

The mall developer, which started the year with around 100 Wanda Plazas nationwide, has set a goal of having 135 malls by the end of the year. And in April the company announced that it would have 1000 malls in China by 2025.

This expansion comes as many retailers are scaling back their plans in China due to slowing economic growth and a glut of luxury venues.

Italian fashion brand Prada said earlier this year that it would open half as many new outlets on the mainland as it did last year, and LVMH has also cited weaker demand for brands such as Louis Vuitton and Christian Dior in China.

The struggles of Wanda’s own retail brands has also created some empty space in the company’s malls. Wang announced in July that Wanda plans to close 40 of its department stores and 80 other venues as the company shifts its focus to new business areas such as ecommerce and finance.

Suning Also Goes for O2O

While Suning’s 40 new shops is a significant iniative, the company already has 1600 outlets nationwide, and is also targetting major expansion online.

The company which grew rapidly by selling refrigerators, TVs and washing machines to new homeowners during China’s real estate boom, in the past two years has been looking for new ways to continue its growth. And the Internet seems to play a key role in this.

Last month China’s e-commerce leader, Alibaba, announced that it was spending RMB 28.3 billion to take a 19.99 percent stake in Suning, as the two companies hoped to build a new online to offline platform for electronics merchandising.

Already in 2013, Suning had rebranded itself an online to offline retailer, introducing online payments and integrating its web business with its bricks and mortar shops.