Retail in Asia

In Shops

The risks behind jumping aboard China’s retail bandwagon

As China’s developers join the retail bandwagon and complete shopping malls in greater numbers, we hear more voices of concern about shopping mall oversupply in China. A key question is: "Are some cities at greater risk of oversupply than others?"

First, we have to define what we mean by a "city". The administrative area of Suzhou, for example, has more than six million urban residents. But the contiguous urban area of Suzhou itself, ignoring all of the sub-cities, is only about two million. This is referred to as the "metropolitan population" by the Economist Intelligence Unit.

The next question is how to quantify the shopping mall space in the market. The stock figure we use is based on our own data, collected through detailed fieldwork and on-site investigation across 20 cities in China. We focus on real shopping malls above a minimum size that have their own common area and a diverse set of tenants. Freestanding department stores, hypermarkets, furniture malls and big box stores are not included.

(Source: Shanghai Daily)