The Rice-and-Noodles Mall

Developers stalk China's working-class consumers.

By the ice rink at the Superbrand Mall in Pudong, China--Shanghai's vast suburb--Ms. Shi (she prefers not to give her first name) takes a break to cool off. She has become a Superbrand regular, even though the upscale J-Life Mall is near her office. "J-Life is high end," Shi says. "All I do there is window shop."

Hundreds of shopping malls were built in China over the past five years as the nation's spiraling wealth fueled hopes of a consumer boom. But the spree far outpaced demand--and most developers exacerbated the glut by filling their floors with luxury retailers like Prada and Gucci. Such grand visions have created a phenomenon the Chinese call gui gouwu zhongxin, or ghost malls.

"Let's just say more money than experience went into creating this place," says Bob Welanetz. The American real estate exec was hired to help turn Superbrand around in 2004 by the mall's builder, the Thai conglomerate CP Group. When Welanetz arrived, the 10-story Superbrand's occupancy rate was just 45% and customer traffic had dwindled to a trickle. The failure reflected a demographic reality: Most Chinese still shop near home, live on limited incomes, and are mostly interested in paying off mortgages, says Paul French, chief China representative for Access Asia Shanghai. "This is a working-class country," he says.

So Welanetz is remaking Superbrand as a "rice and noodles" mall, China's version of "meat and potatoes." He says it should have a good supermarket, midpriced international brands--he's bringing in H&M, Zara, and Mango--and lots of restaurants featuring regional Chinese cuisine. "Activity floors" feature movie theaters, karaoke bars, a 30,000-foot yoga gym, and a huge bookstore with wireless access and a coffee bar.

The masses haven't yet arrived, although Welanetz says 100,000 consumers visit the mall each day, up from 60,000 two years ago. But Superbrand has commitments from retailers to lift occupancy to 95% soon. And Pudong keeps growing, its hundreds of skyscrapers now home to 1.5 million people.

But most of those aren't well-heeled fashionistas. They're more like Chen Xunwu, 36, a small-business owner. He started visiting Superbrand when the ice rink opened. "Now my family comes once or twice a week. I eat here with friends. My wife even shops here." There are many more where she came from.

Additional reporting by Fan Song-Lu

Reader Riff
"We seem to spend an awful lot of time under a ridiculous microscope. Maybe we are just a sensational people, envied, hated, loved, pitied. Go ahead, be ugly, be sensational, be American!" --John McDougall on the perception of "ugly Americans"

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