Even government officials have worked out that something has to be done to reinvent malls (many run by government owned property developers) in their city centers and suburbs if they are to remain viable.
Not only are Chinese buying more and more online, but also when they do shop in physical stores, they want to shop in their local community, within walking distance from home. They are increasingly stepping away from the anchor hypermarkets in the malls that they have to drive to.
In Shanghai, for example, officials are celebrating the conversion of electronics-focused malls into “cultural and entertainment” centers. Doubtless we will soon see an overly supply of these. Metro City, for example, is converting part of its space into a 700-seat theater. Pacific Digital City is going further. It’s demolishing part of the current mall to build a recreation center. Other malls are not renewing leases for electronics vendors and are replacing them with restaurants. Where electronics-focused malls lead, others will follow.
Will the consumers flock to these repurposed malls in sufficient numbers? I doubt it. Will demand for eating out really grow that rapidly? Will restaurants be able to afford rents that mall owners need to charge to cover their interest payments? We will see.
Image credit: Remko Tanis / Flickr