Mall manager bets on China's fast-growing consumer market

HONG KONG: When Thomas Tam left property heavyweight Cheung Kong (Holdings) to establish his own shopping centre consulting company in 2005, he bet his career on China's vast and fast-growing consumer market.

His bet proved right as TCBL Consulting is now providing consulting services to about 50 completed or uncompleted shopping centres in China, and employs 300 staff members from just 20 five years ago.

Before setting up his own business, Tam was in charge of running Cheung Kong's Oriental Plaza in Beijing, experience that he put to work on his account when he set up TCBL.

Now, with a steady increase in the number of new shopping malls being opened and old malls being renovated, demand for his consultancy services — which include mall management and a network of connections to bring in international brands — is on the rise, says Tam.

One example is upgrading the three shopping centres — Lippo Plaza, Hong Kong Plaza and Infiniti Plaza on Huaihai Road in Shanghai — by bringing in international brands such as Louis Vuitton, Ermenegildo Zegna, Coach and Tiffany.

"Chinese consumers have become the target customers for international companies," Tam said.

Top-priced luxury brands such as Louis Vuitton and Gucci were in the first wave of retailers to open outlets in China more than 10 years ago, and mid-priced brands followed in a second wave that got under way over the past three to four years, he said.

Luxury brands and fast fashion brands such as H&M and Zara are now expanding into several second-tier China cities.

"Retailers do not have their eyes solely on first-tier cities, where the pace of consumption growth has begun slowing. They are now looking to second- or third-tier cities such as Dalian, Chengdu and Changchun, where they see the emergence of a growing consumption power," Tam said.

China last year became the fifth-largest market for consumer spending in the world, behind the United States, Japan, Britain and Germany. The Ministry of Commerce has predicted the nation is likely to become the biggest consumer market by 2015.

"When H&M opened its first Qingdao outlet in April this year, its first-day sales went over 500,000 yuan (RM235,441.55). That was very impressive," Tam said.

That turnover compared with first-day sales of two million yuan when H&M opened its first China flagship store in Shanghai, added Lawrence Wu, who left Sun Hung Kai Properties and joined Tam's consulting operation as joint managing director in 2006. H&M is now planning to expand into western China, while Zara has opened stores in Dalian and Changchun, and Japanese fashion brand Uniqlo recently opened a store in Qingdao.

It is not only fashion retailers that are beating a path to China's consumer market. Restaurant operators such as Hong Kong's Lee Gardens have joined the stampede.

Their expansion across the border has been fuelled by several factors, says Wu, including the nation's rapid economic growth and the policy support shown by Beijing for consumer spending as a pillar of that growth.

China retail brands were also expanding at a fast pace, and would play an increasing role in the country's retail market in future, Wu said.

To support this growth, TCBL is planning to open offices in more inland cities including Hefei in Anhui province, Kunming in Yunnan province, and Changsha in Hunan, according to Tam. — South China Morning Post
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