In the two years since Pradera Retail Asia took over the historic retail center on East Nanjing Road in Shanghai now known as Mosaic Shanghai, the shopping center asset manager has been singularly focused on transforming the former department store, which dates back to the 1930s, into a retail destination that resonates with young consumers in the world’s second-largest economy.
“China is in many ways leading the disruption in retail,” said Alison Rehill-Erguven, the company’s CEO. “With millennials on their phones and online all the time, digital and retail are inevitably coming together. It is our goal to make Mosaic Shanghai a place that resonates with the new generation.”
To that end, Pradera Retail Asia has melded its experience in creating diverse and enriching retail environments with incipient, technology-driven marketing initiatives to transform the shopping destination along the popular pedestrian thoroughfare.
Repositioning a Historic Destination
Pradera Retail Asia1, the asset manager of Mosaic Shanghai, focuses on New Retail in this historic building. The 1930s-vintage structure, located at 353 East Nanjing Road, was originally part of a cluster of Western-style retail emporiums that became what is now the East Nanjing Road pedestrian shopping street, or China’s “Fifth Avenue.”
While the building has remained operational over the years, it had previously struggled to maintain an identity amid China’s rapid shift in shopping culture and trends. In 2016, Pradera Retail Asia took over as the manager with a mission to bring new relevance to one of Shanghai’s oldest retail destinations.
Digging into the Data
Pradera Retail Asia analyzed that half the mall crowd is comprised of millennials, white-collar workers and residents, and the other half are domestic and international tourists. So, the company came up with a strategy: target these young consumers using entertainment as a driver, supplemented by carefully curated fashion brands and dining options to cater to this mixed group.
“The entertainment is designed to attract people into the door, then surround them with food and beverage outlets and fashion brands as they walk up and down the building, enticing them to stay longer and spend,” Rehill-Erguven said.
To ensure that the project’s new attributes were noticed by passers-by, the company gave the property a face-lift that included widening the entrance and adding an LED display. And to maintain the heritage of the 87-year-old building, the common areas were subtly renovated to create a more spacious design which also gives greater visibility to the stores, creating better retail and event spaces.
Leveraging Online Tools for Offline Traffic
Beyond increasing the physical appeal of the asset, Pradera Retail Asia has leveraged the power of China’s most powerful online platforms to help build awareness of, and engagement with, its offline initiatives.
“Although markets like the US are doing interesting things to create better physical spaces for online retail, China is by far leading the trend of connecting technology to the online-offline experience,” Rehill-Erguven said.
Besides utilizing the ubiquitous Chinese social media platform WeChat to bring shoppers to its retail location, Pradera Retail Asia has also partnered with Alibaba’s B2C marketplace Tmall and the popular selfie sticker app FaceU for online-offline events.
Delivering Experiences in a Pedestrian Destination
Among the initiatives that Pradera Retail Asia is promoting at Mosaic Shanghai is an attraction that it unveiled in September 2018 – what Rehill-Erguven refers to as its “hook.” The Shanghai Dungeon, created by Legoland and Madame Tussauds’ owner Merlin Entertainments Group, (one of the world’s leading family entertainment companies), is an immersive experience that takes visitors through a 90-minute actor led, funny, scary, and spooky experience with an array of special light and sound effects and gags inspired by Shanghai’s historical urban myths that includes a drop ride at the end.
At the exit of the Dungeon’s hair-raising experience, the visitor arrives at M Porium, a themed area capturing the feeling of Shanghai and Oriental design, containing a rich array of trendy and local F&B operators and contemporary Shanghai style retail.
Meeting the Needs of Local White Collars
While the Shanghai Dungeon and M Porium are created to lure tourists, M square demonstrates Pradera Retail Asia’s effort to capture the hearts and wallets of a generation that has grown up with the disruptive power of e-commerce.
Located on the ground floor of Mosaic Shanghai, the square features cosmetics, F&B and brands popular among young consumers, including Korean cosmetic brand Too Cool For School and Nature Republic, colored contact lens shop Sweet Color, and sweets shop Beauty Bowl, coffee shop 72 Now and popular bakery BuEr Cha and Happy All The Time.
It also houses the international sportswear brand FILA’s largest flagship store in Greater China and one of the leading flagship stores of H&M. Popular Chinese beverage start-up Heytea is also launching a shop for its cheese-topped tea drinks by early 2019.
Also serving the needs of local office workers, as well as nearby corporates, is a new shared office facility which will open in Mosaic Shanghai in 2019. Rehill-Erguven revealed that Pradera Retail Asia has agreed to lease a significant portion of a floor inside the mall to Chinese co-working provider Mixpace to provide workspace for professionals in the area, while also helping to drive business to many of the retail tenants in the facility.
“Retail real estate in general has been evolving and a lot of different elements are being added to it,” Rehill-Erguven said. “While Pradera Retail Asia has brought its European-honed best practices, operational efficiency in the assets and a keen and profound understanding of merchandising to China, China is also teaching us with its new retail innovation.”
1 Established in September 2016, Pradera Retail Asia is a joint venture between Pradera and Macquarie Retail Real Estate Management Limited, a subsidiary of Macquarie Infrastructure and Real Assets (Hong Kong) Ltd (MIRA), that provides asset management services in Asia. Pradera Retail Asia now manages four retail properties located in China, including Shanghai, Qingdao, Xi’an and Chongqing, and provide asset optimization services, managing a total leasing area of 200,000 square meters.