Inter Ikea Center Group is investing 1 billion euros ($1.3 billion) in the already crowded Chinese shopping center space, in a bid to boost efforts in one of its biggest markets.
Inter IKEA Centre Group (IICG) develops, owns and manages shopping centres in partnership with IKEA.
IICG said that it has invested in three shopping centers in China, located in Beijing, Wuhan and Wuxi, with the first mall due to open early next year.
On Wednesday, the company announced the completion of the Beijing shopping center, which is located around the south fourth ring road. The new building has a floor area of 170,000 square meters and more than 500 retailers, including an Ikea store, an Auchan supermarket, a Jinyi cinema and a Suning store, the Chinese answer to Best Buy.
“IICG has eyed this area for three to four years. The place has a convenient location, increasing population density and a large parking area, which will bring a lot of returns in the future,” said Guo Zengli, the president of the China Shopping Center Development Association.
According to the association, China had 2,812 shopping centers in 41 cities by the end of 2011. The number of shopping malls in the country will reach at least 7,000 by the end of 2025.
Guo said that Chinese metropolitan areas such as Beijing and Shanghai already have enough luxury and fashion shopping centers for the cities’ limited capacity and purchasing power. Instead, big cities should have more community-type shopping centers.
“With a more diversified and segmented consumer population, we are seeing an increased market demand to come up with targeted, specific, and customized strategies at retail service and brand level to deliver against both the different and the similar needs,” said Oliver Rust, managing director of Nielsen Hong Kong.
In addition to specific and customized strategies, future shopping malls should be more focused on lifestyle experiences. If the retailers can keep the customers more time inside the building and provide good services, good layout, and even a good smell, it will definitely bring more sales, Guo added.
The Beijing IICG shopping center will provide an “arrive for shopping and stay for living” experience. It will dedicate around 25 percent of its floor area for entertainment, such as coffee shops and restaurants. With the Ikea store inside, the mall will attract consumers from a wide area, according to John Tegner, managing director of the Inter Ikea Center Group.
“What we feel happy about is that we can see that the IKEA concept has stood up relatively well,” said Tegner. “The shopping center will create a strong and unique concept for local consumers: to create a city life and to uplift the quality of urban life.”