Company special: Taubman Asia, Wangfujing Group open joint venture mall in Xi'an

Leading mall investor and operator Taubman Centers from the United States is looking for more opportunities in the Chinese market by expanding its presence in second- and third-tier cities.

As the first foray into the Chinese market, the company opened the CityOn. Xi'an Shopping Center in Xi'an, the capital of Northwest China's Shaanxi province, on April 28. It is the outcome of a collaboration between Taubman Asia, a subsidiary of Taubman Centers, and Wangfujing Group, one of China's largest department store chains.

Located at the heart of Xi'an's new central business district and administrative center, CityOn. Xi'an Shopping Center is a modern, 90,000-square-meter, seven-level shopping center with plenty of amenities for shoppers, including easy parking with 2,200 spaces, as well as convenient traffic conditions.

"With a number of Chinese and international designers and lifestyle brands from fast fashion to accessible luxury, CityOn. Xi'an Shopping Center will create a shopping experience that is sure to satisfy the diverse tastes of people across the region," said Robert S. Taubman, chairman, president and CEO of Taubman Centers.

Taubman said the company started to adjust its development strategy five years ago and shifted its focus to the Chinese market. CityOn brand malls are positioned as world-class, onestop, regional shopping centers.

The second CityOn mall is expected to open in Zhengzhou, the capital of Central China's Henan province, later this year, Taubman said.

Located at the heart of Zhengdong New District, the 135,000-sq-meter CityOn. Zhengzhou Shopping Center will host more than 200 international and local top retailers and have food and beverage offerings.

"We are very selective in our choice of partners. In the US, our shopping malls are excellent and have high quality. And in China, we also have the same standard in building such malls," said Taubman, adding that he is confident in the opportunities brought by the two projects.

The CityOn malls also feature local characteristics. For example, the dining area in CityOn. Xi'an Shopping Center accounts for about 30 percent of the total space while in other malls owned by Taubman the proportion is about 12 percent.

"CityOn. Xi'an Shopping Center perfectly combines Wangfujing's extensive experience as China's leading retail brand and Taubman's more than half century legacy in shopping center development," said Liu Bing, former chairwoman of Wangfujing Group. "It will be one of the most exciting retail destinations in the Xi'an region and will undoubtedly be embraced by the local community and tourists alike."

More opportunities

Liu said the pressure of developing city or regional shopping malls in first-tier cities, such as Beijing, Shanghai and Shenzhen, is great due to fierce competition and high construction costs. She said more opportunities will be seen in China's second- and even third-tier cities in the future.

Taubman said the populations in China's second- and third-tier cities have already reached the standard of first-tier cities in the US, and they have the capacity to support development.

"Xi'an, for example, has more than 8.5 million people, close to the population size of Chicago, the third-largest city in the US. We saw a very good opportunity here, because of the strong support from such a large population. In addition, local economic fundamentals are very robust," he said.

"And Zhengzhou has nearly 9 million people, which is enough to support our development."

Considering the wide use of the internet and the changing behavior of consumers, CityOn mall will also speed up efforts to improve customers' shopping experiences by combining online and offline services and marketing activities.

China's economic growth has slowed in recent years, and some industry insiders believe the bearish macro environment will bring a slowdown to shopping across the country. However, China Mall 2020, a white paper report on the future of China's retail sector jointly released last year by Taubman Asia and Mingtiandi, a Chinese market research firm, forecast sustainable growth in Chinese consumption.

Despite the threat of an online retailing boom, the report pointed out that some traditional retailers and brick-and-mortar mall developers are already adjusting their marketing strategies and adopting new technologies to drive more business.

Taubman said the company has maintained an optimistic attitude toward the potential growth of the Chinese market as the industry undergoes its first stage of evolution.

"With our more than six decades' international experience as well as our robust local team, we are well placed to be part of the development of this next generation of malls in China," he said.

Taubman Asia and Wangfujing said they are discussing further business expansion in China, such as opening outlet centers and entering China's western cities.

"We have seen a lot of good US brands when visiting the malls developed by Taubman," Liu said. "We hope more US retail brands can be introduced into China through the partnership with Taubman Asia."

wanghongyi@chinadaily.com.cn

(China Daily 05/06/2016 page10)