Department Stores in China, 2012 - Li & Fung Group

Department Stores in China, 2012
November 2012
Li & Fung Research Centre

CONTENTS
I. Overview 1
II. Operation models of department stores in China 4
III. Competitive landscape 9
1. Many department stores are operating alongside other retail formats
such as supermarkets, outlets, and specialty stores 9
2. Domestic department store operators tend to focus on regional
markets; while foreign players usually have wider footprints 13
IV. Challenges 15
1. Poor differentiation of department stores in China 15
2. Lack of experienced in-house buyers 15
3. Increasing threat from operators of other retail formats such as
hypermarkets, specialty stores and professional stores 16
4. Stiff competition from e-commerce players 16
V. Recent developments 18
1. Development of private labels and proprietary brands is gaining
attention; some department store operators are striving to nurture their
own in-house buyers 18
2. Department stores with distinct themes and positioning are winning appeal 19
3. Some department store operators adopt a hybrid model of “department
store plus shopping mall 19
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
i

4. Some department store operators have gone online; yet, most
are not very successful 21
5. Non-core commercial areas and lower-tier cities are becoming the
new frontiers 23
6. Increasing investment in the commercial property market 24
Appendix 1: Store locations of major department stores in China 25
Appendix 2: Major commercial districts in China, by region 28
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
ii

I. Overview
The total sales revenue of department stores in China reached 322.7
billion yuan in 2011
According to the National Bureau of Statistics of China (NBS), the total sales
revenue of department stores amounted to 322.7 billion yuan in 2011, indicates
a year-on-year (yoy) growth rate of 20.8% (Exhibit 1).
Exhibit 1: Total sales revenue of department stores, 2003-2011
Sales value (billion yuan)
Source: National Bureau of Statistics of China
According to a survey 1 conducted by China Chain Store and Franchise
Association (CCFA) and Deloitte, sales of 43 surveyed department store
operators registered 17.7% yoy growth in 2011; as shown in Exhibit 2, the
growth of total sales revenue of the surveyed department store operators was
higher than the growth rates of total operational floor area and total number of
employees, indicating an improvement in operational efficiency.
1 Source: Report on the Operation of China Chain Retailers, 2011-12 (中國連鎖零售企業經營狀況分析報告 2011 –
2012)
350
300
250
200
150
100
50
0
59.7
93.0
127.5
148.2
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
162.5
211.0
249.8
267.2
322.7
2003 2004 2005 2006 2007 2008 2009 2010 2011
1

Exhibit 2: Performance of the surveyed department store operators, 2010-2011
Total sales
revenue
(billion yuan)
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Total operational floor
area
(square meter)
Total number of
employees
2010 9.6 59 7,100
2011 11.3 66 7,600
Growth rate 17.7% 11.9% 7.0%
Source: Report on the Operation of China Chain Retailers, 2011-2012 (中國連鎖零售企業經營狀況分析報告 2011 –
2012) by CCFA, Deloitte
Department store operators are facing increasing cost pressure
According to the aforementioned survey, department store operators
encountered increasing cost pressure in 2011, which stemmed primarily from
rising labor costs, followed by higher rents and huge utility bills. As shown in
Exhibit 3, total labor cost of the surveyed department store operators jumped
by more than 34% from 150.8 million yuan in 2010 to 202.3 million yuan in
2011.
2

Exhibit 3: Selected expenses of the surveyed department store operators
Source: Report on the operation of China Chain Retailers, 2011-12 (中國連鎖零售企業經營狀況分析報告 2011 – 2012)
by CCFA, Deloitte
Exhibit 4 shows the cost composition of the surveyed department stores
operators.
Exhibit 4: Cost composition of the surveyed department store operators
100%
80%
60%
40%
20%
0%
Source: Report on the operation of China Chain Retailers, 2011-12 (中國連鎖零售企業經營狀況分析報告 2011 – 2012)
by CCFA, Deloitte
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
11.50% 12.00%
15.90% 17.30%
44.80% 41.40%
27.80% 29.30%
2010 2011
Rent Labor cost Utility fees Depreciation
3

II. Operation models of department
stores in China
Many department store operators in China adopt the concessionaire business
model. They do not buy out the inventory and thus carry minimal inventory risks.
Instead, they act like retail landlords and lease their store areas to
concessionaires.
In general, department stores operators in China generate revenue primarily
from commissions on concessionaire sales; other sources of income include
merchandise direct sales, rental income from store tenants, agency fees
earned by serving as agents as well as management fees, etc.
Commissions on concessionaire sales
As aforesaid, under concessionaire sales arrangements, department store
operators do not own the title to the goods. They enter into agreements with
concessionaires and grant the latter the rights to sell the products in designated
store areas. Department store operators generally provide a range of services
including advertising, marketing, store decoration and renovation, inspection of
goods, safety inspections, and centralized payment settlements.
Concessionaires need to hand over a certain percentage of their total sales
proceeds to department store operators as commissions, usually with a
guaranteed base-figure for sales each month.
Currently, department store operators in China generate the bulk of their
revenue from commissions on concessionaire sales.
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
4

Most department stores in China are running under a concessionaire
model
Concessionaire sales refer to the leasing of designated areas within a
department store to concessionaires, which may include manufacturers,
suppliers, or licensed importers that manage individual brands. Under
concessionaire sales arrangements, department store operators do not buy out
the inventory and carry little inventory risks. Instead, they usually provide a
range of services including advertising, marketing, store decoration and
renovation, inspection of goods, safety inspections, and centralized payment
settlements. On the other hand, the concessionaires need to hand over a
certain percentage of their total sales proceeds to department stores as
commissions, usually with a guaranteed base-figure for sales each month.
Listed below are the concessionaire rates of selected department store
operators listed in Hong Kong. Concessionaire rates of selected department
store operators have been decreasing in recent years, attributable in part to
increasing competition; for some store operators such as Golden Eagle Retail
Group, this may be a result of dilution from new stores that command lower
rates or greater promotion intensity.
Concessionaire rates of selected department store operators, 2009-2011
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
2009 2010 2011
Golden Eagle Retail Group Ltd. 20.3% 20.0% 19.6%
Intime Department Store (Group), Co., Ltd. 18.0% 17.8% 17.2%
New World Department Store China Ltd. 20.3% 19.4% 18.8%
Maoye International holdings Ltd. 18.0% 17.5% 16.9%
Source: Respective company annual reports
Currently, commissions on concessionaire sales are the predominant source of
income for China’s department store operators. As shown in the table below,
commissions from concessionaire sales accounted for more than 50% of the
total sales proceeds of selected listed department store operators.
5

Revenue breakdown of selected listed department store operators, 2011
Commissions from
concessionaire sales
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Intime Golden
Eagle
New World
Department
Store
Parkson
56.58% 68.53% 70.05% 60.42%
Sales of goods - direct sales 36.49% 29.75% 19.86% 34.41%
Rental income 0.72% 0.45% 8.02% 4.75%
Management fee income
from the operation of
department stores
Source: Respective company annual reports
6.22% 1.27% 2.08% 0.42%
To most department store operators, running under the concessionaire model
not only reduces inventory risks but also the risks associated with sales;
moreover, department store operators also do not need to worry about building
logistics facilities/infrastructure for the distribution of products.
Having said that, the heavy dependence on commissions from concessionaire
sales brings to the fore certain challenges. One of the major challenges is the
poor differentiation of department stores in China. As department store
operators in China tend to rely on big brands to secure commissions, the
merchandise mix is largely similar across department stores. According to Blue
Book of Guangzhou’s Commercial Sector (廣州商貿業發展報告(藍皮書))
published by Guangdong Academy of Social Sciences, brand overlapping rate
for apparels, shoes and cosmetics among the surveyed department stores in
Guangzhou reached 41.49%, 41.27% and 45.83%, respectively. This prevents
department store operators from developing their own store brands and affects
the overall profitability of the department stores. On the other hand, it is
expensive and difficult for lesser-known brands to compete for shelf space in
department stores in China. It is common for department store operators to
levy cumbersome charges such as slotting fees, new product listing fees,
promotion fees, etc. on weaker concessionaires.
6

Merchandise direct sales
Under direct sales arrangements, department store operators source and sell
their own directly purchased merchandise or private labels/proprietary brands.
Department store operators own the title to the goods; they profit from
merchandise mark-ups. Most of the merchandise in supermarkets, home
appliance sector and cosmetic products with high brand recognition are
covered by direct sales arrangements.
Rental income from store tenants
Department store operators lease designated areas to other business
operators such as restaurants, pharmacies, hair and beauty salons, etc. and
receive rental incomes from them. Department store operators do not own the
title to the goods and are generally not responsible for sales management.
Agency fees earned by serving as agents
Department store operators are authorized to serve as agents. As in the case
of concessionaire sales arrangements, department store operators typically do
not own the title to the goods. Revenue is generated from agency fees, an
amount that is usually not related to the sales of goods. Department store
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
operators also provide
some value added
services such as
marketing and
promotion, store
decoration and
renovation, inspection
of goods, centralized
payment settlement,
etc. The recent
distribution agreement
signed between
Grandbuy Department Store and Luk Fook Group, a Hong Kong-based jewelry
retailer is a case in point. Under the agreement, Luk Fook Group granted the
distributorship right to Grandbuy Department Store to distribute their jewelry
7

products in selected Grandbuy Department Stores.
Exhibit 5 summarizes the characteristics of various operation models of
department stores in China.
Exhibit 5 Characteristics of various operation models of department stores in China
Source of
income
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Involvement in brand
operation
Concessionaire sales Commissions Not involve in brand
Lease designated
areas to store tenants
Merchandise direct
sales
- Directly
purchased
merchandise
- Proprietary/
exclusive brands
Rental income
from tenants
Sales of the
products
Sales of the
products
- Private label Sales of the
Act as authorized
distributors/agents
Source: Li & Fung Research Centre
products
operation;
May take part in brand
selection
Not involve in brand
operation
Oblige to the buyout of
the directly
merchandise products
and brands
Fully responsible for
brand operation
Actively involve in
brand operation;
Bearing most of the
brand operation cost
100% ownership of the
brand;
Fully in charge of
brand operation;
Bearing 100% of the
brand operation cost
Agency fees Actively involve in
brand operation
Operation
knowledge
requirement
Inventory
risk
Overall level of risk and
seasonality
Low Nil Low risk and weak
seasonality
Low Nil Low risk and weak
seasonality
High Yes Risky and strong seasonality
Very high Yes Very risky and very strong
seasonality
Extremely high Yes Very risky and very strong
seasonality
High Nil Low risk and weak
In additional to the above sources of income, department store operators in
China also profit from various types of fees such as slotting fees and extra
commission fees collected at year-end.
seasonality
8

III. Competitive landscape
1. Many department stores are operating alongside other retail formats
such as supermarkets, outlets, and specialty stores
Compared with many mature markets, China’s department store market is very
fragmented. According to the CCFA, among the top 100 retail chain operators
(the “Top 100s”) in 2011, only 35 players chiefly operated in the department
store format. Indeed, many large-scale department stores are operating
alongside other retail formats such as supermarkets, outlets, and specialty
stores. As shown in Exhibit 6, many department store operators among the Top
100s are also operating in other retail formats such as supermarkets, specialty
stores, convenient stores, etc.
Exhibit 6: Department store operators among the Top 100s, 2011
Ranking Ranking
among the
Top 100s,
2011
Enterprise Sales
1 -- Shanghai Friendship Group
Incorporated Company**
上海友誼集團股份有限公司**
2 6 Chongqing Commerce (Group) Ltd.
重慶商社(集團)有限公司
3 11 Dalian Dashang Group Co., Ltd.**
大連大商集團有限公司**
4 12 Shandong Commercial Group
Corporation
山東銀座商城股份有限公司
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
revenue
(million
yuan)
Number of
stores 2011*
55,000.00 43
47,802.62
325
35,600.00 170
30,670.37 93
Place of origin Operating
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
format/business
Department stores
Supermarkets
Shopping malls
Outlets
Department stores
Electronic specialty
stores
Supermarkets
Department stores
Electronic specialty
stores
Supermarkets
Department stores
Supermarkets
Convenient stores
Shopping malls
9

Ranking Ranking
among the
Top 100s,
2011
Enterprise Sales
5 21 Beijing Wangfujing Department Store
(Group) Co., Ltd.
北京王府井百貨(集團)股份有限公司
6 22 Changchun Eurasia Group Co., Ltd.
長春歐亞集團股份有限公司
7 23 Jiangsu Wenfeng Great World
Chainstore Development Co., Ltd.
文峰大世界連鎖發展股份有限公司
8 25 Rainbow Department Store Co., Ltd.
天虹商場股份有限公司
9 27 Zhenghua Group
煙台振華百貨集團股份有限公司
10 29 Golden Eagle Retail Group Limited
金鷹商貿集團有限公司
11 30 Parkson Retail Group Ltd.
百盛商業集團有限公司
12 32 New World Department Store China
Limited**
新世界百貨中國有限公司**
13 35 Hefei Department Store Group Co., Ltd.
合肥百貨大樓集團股份有限公司
14 36 Beijing Capital Retailing Group Co., Ltd.
北京首商集团股份有限公司
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
revenue
(million
yuan)
Number of
stores 2011*
20,093.93 25
19,903.19 50
19,453.71 990
18,959.38 51
17,883.60
106
16,427.67 26
16,426.17 52
15,500.00 39
Place of origin Operating
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
14,800.00 186 Chinese
14,029.92
18
format/business
Department stores
Department stores
Supermarkets
Department stores
Electronic specialty
stores
Supermarkets
Department stores
Department stores
Supermarkets
Department stores
Malaysia Department stores
Hong Kong Department stores
Mainland
Chinese
Mainland
Department stores
Electronic specialty
stores
Supermarkets
Department stores
10

Ranking Ranking
among the
Top 100s,
2011
Enterprise Sales
15 39 Intime Department Store (Group) Co.,
Ltd.
銀泰百貨(集團)有限公司
16 44 Shandong Weifang Department Store
(Group) Co., Ltd.
山東濰坊百貨集團股份有限公司
17 47 Liaoning Xinglong Big Family Business
Group
遼寧興隆大家庭商業集團
18 49 Zhengzhou Dennis Department Store
Co., Ltd.
鄭州丹尼斯百貨有限公司
19 50 Maoye International Holdings Ltd.
茂業國際控股有限公司
20 54 Guangzhou Grandbuy Co., Ltd.
廣州市廣百股份有限公司
21 64 Jinan Hualian Commercial Group
濟南華聯商廈集團股份有限公司
22 65 Nanjing Central Emporium Group
Stocks Co., Ltd.**
南京中央商場股份有限公司**
23 66 Beijing Cuiwei Plaza Shopping Center**
北京翠微大廈股份有限公司**
24 68 Guangzhou Friendship Group Co., Ltd.
廣州友誼集團股份有限公司
25 71 Charter Group Holdings Limited
卓展集團控股有限公司
26 72 Handan Sunshine Department Store
(Group) Co. Ltd.
邯鄲市陽光百貨集團總公司
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
revenue
(million
yuan)
Number of
stores 2011*
13,673.18 29
12,132.15 417
11,260.76 30
Place of origin Operating
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
10,800.00 27 Chinese
10,429.86 38
9,309.00 29
5,504.93 24
5,500.00 8
5,400.00 5
5,000.00 6
4,800.00
3
4,610.00 121
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
format/business
Department stores
Department stores
Supermarkets
Convenient stores
Department stores
Supermarkets
Department stores
Supermarkets
Hypermarkets
Department stores
Department stores
Department stores
Supermarkets
Department stores
Department stores
Department stores
Department stores
Department stores
Electronic specialty
stores
11

Ranking Ranking
among the
Top 100s,
2011
Enterprise Sales
27 73 Shandong Weihai Department Store
Group Stock Co., Ltd.
山東威海百貨大樓集團股份有限公司
28 74 Beijing Shunyi Guotai Commercial
Building
北京市順義國泰商業大廈
29 84 Hunan Jiahui Department. Store Co.,
Ltd.
湖南佳惠百貨有限責任公司(集團)
30 91 Guangxi Nancheng Stores Joint-stock
Co., Ltd.
廣西南城百貨股份有限公司
31 94 Xiongfeng Group Co., Ltd.
雄風集團有限公司
32 99 Nanning Department Store Co.,Ltd.
南寧百貨大樓股份有限公司
33 -- Shirble Department Store Holdings
(China) Ltd.
深圳歲寶百貨有限公司
34 -- JiaHua Stores Holdings Limited
深圳市百佳華百貨有限公司
35 -- Tangshan General Merchandise Group
Co., Ltd.
唐山百貨大樓集團有限責任公司
* Number of stores included stores of other retail formats
** Estimated figures
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
revenue
(million
yuan)
Number of
stores 2011*
4,560.00 36
4,508.91 14
3,709.20 231
3,003.53 27
2,865.28 129
2,659.07
9
2,430.92 17
2,153.64
19
17,346.60 8
Source: China Chain Store and Franchise Association (CCFA), company websites
Place of origin Operating
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
Chinese
Mainland
format/business
Supermarkets
Department stores
Department stores
Department stores
Supermarkets
Department stores
Electronic specialty
stores
Supermarkets
Department stores
Electronic specialty
stores
Supermarkets
Department stores
Department stores
Department stores
Department stores
12

2. Domestic department store operators tend to focus on regional
markets; while foreign players usually have wider footprints
Most of the domestic department store operators in China are region-focused.
For instance, Rainbow Department Store focuses its operation on southern
part of China, with 35 out of 52 stores running in the southern region; Golden
Eagle Retail Group, on the other hand, concentrates on the eastern region,
with 26 out of 30 stores locating in the eastern region; and Springland, one of
the leading retailers in Yangtze River Delta, focuses mainly on southern
Jiangsu.
Exhibit 7 shows the regional footprints of selected listed department store
operators in China. The store locations of major departments store operators
among the Top 100s are shown in Appendix 1.
Exhibit 7: Store locations of selected department store operators in China, by region
Parkson*
New
World*
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Rainbow Intime
Golden
Eagle
Wangfujing Maoye
South 3 (5.5%) 0 (-) 35 (67.3%) 0(-) 0 (-) 2 (8.3%) 7 (33.3%)
East 13 (23.6%) 13 (34.2%) 8 (15.4%) 20 (43.5%) 26 (86.7%) 0 (-) 3 (14.3%)
North 16 (29%) 13 (34.2%) 4 (7.7%) 3 (6.5%) 0 (-) 11 (45.8%) 10 (47.6%)
Central 3 (5.5%) 8 (21.1%) 5 (9.6%) 6 (13%) 0 (-) 4 (16.6%) 0 (-)
West 20 (36.4%) 4 (10.5%) 0 (-) 2 (4.3%) 4 (13.3%) 7 (29.2%) 1 (4.8%)
Total 55 38 52 46 30 24 21
*Note: Foreign operator
Source: Company websites
13

As there are huge
regional disparities in
consumer tastes and
preferences,
region-focused
department store
operators usually have
better understandings of
the needs of local
consumers. Moreover,
regional department store
operators normally have
stronger local network
and guanxi, which give
them better bargaining
power in their own
regions. For instance,
many suppliers in China
operate on a regional
basis; this allows
domestic department
store operators to be able to build long-standing relationship with suppliers.
Besides, many domestic players, particularly the state-owned ones, usually
receive huge support from local governments and are able to secure prime
locations in key areas or major commercial districts. All these partly explain the
strong performance of a number of domestic players in respective cities and
provinces.
Foreign department store operators, on the other hand, usually have wider
national footprints comparing with their domestic counterparts. Among the top
100s in 2011, Hong Kong-based New World Department Store China Ltd. and
Malaysia-based Parkson Retail Group Ltd. were the only two foreign
department store operators.
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
14

IV. Challenges
1. Poor differentiation of department stores in China
Department stores in China rely heavily on commissions from concessionaire
sales, leading to poor differentiation of department stores. Moreover, as
department store operators in China tend to rely on a number of key brands to
secure commissions, the merchandise mix is largely similar across department
stores. This prevents department store operators from developing their own
store brands and greatly affects their profitability. On the other hand, it is
expensive and difficult for lesser-known brands to compete for shelf space in
department stores in China. It is common for department store operators to
levy cumbersome charges such as slotting fees, new product listing fees,
promotion fees, etc. on weaker concessionaires.
2. Lack of experienced in-house buyers
It is quite common that department stores in the US and Europe have their own
professional buyers to ensure the products sold at the stores are unique and
exclusive. However, the case is very different in China as most of the
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
department stores are
operating under the
concessionaire model. Take
the fashion industry as an
example. In China, one of
the major challenges facing
China’s department store
operators is the lack of
professional fashion buyers
with strong fashion sense,
and know-how of fabrics and
sourcing. Some industry
experts said that it normally
takes at least three years to
nurture a professional buyer with practical experience and knowledge of a
target market; and it may take up to eight years to train up a merchandise
manager. Many department store operators are reluctant to invest time and
15

money to train their buyers. Some of them also worry that the buyers that they
have trained might join another company as a result of high demand of
experienced in-house buyers.
3. Increasing threat from operators of other retail formats such as
hypermarkets, specialty stores and professional stores
Competition in China’s retail sector is fierce. Nowadays, department stores are
facing the threat of losing ground to hypermarkets and specialty stores. For
hypermarket operators, they usually have stronger bargaining power over their
suppliers due to economies of scale; thus, they are able to provide a wider
range of products at a much lower price. The huge variety of products available
at hypermarkets also allows consumers to shop most of their daily necessities
under one roof. Furthermore, most of the department stores are located in the
commercial districts while hypermarkets are normally situated in residential
areas; the convenient locations of hypermarkets also help attract consumers
and get more foot traffic.
Specialty stores and professional stores, on the other hand, are able to provide
more unique shopping experience for consumers. They have more control in
product ranges, pricing, store layout, promotion activities, etc. and thus can
better deliver their brand messages to consumers. Some prominent examples
include apparel specialty retail chain operators Zara and H&M, furniture retailer
IKEA; and electrical appliance retailer Gome and cosmetics professional store
operators SaSa and Watson.
4. Stiff competition from e-commerce players
Currently, online shopping is fast gaining popularity in China. According to
iResearch, the transaction value of China’s online retail market was up by
67.8% yoy to reach 773.6 billion yuan in 2011, accounting for 4.3% of the total
retail sales in China (see Exhibit 8). The online transaction value reached 228.2
billion yuan, 268.4 billion yuan and 284.2 billion yuan in 1Q12, 2Q12 and 3Q12,
respectively. It is expected that the market size of the online retail market in
China will exceed Japan in 2012, and even overtake the US to become the
largest online retail market in the world by 2013.
In particular, the growing popularity of some pure-click retailers such as Tmall,
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
16

360Buy, Tencent, Dangdang has posed a challenge to department store
operators. Many of these leading B2C platforms are integrated marketplaces
that offer shoppers one-stop shopping experiences; they also place increasing
attention to customer/after-sales services. On the other hand, other B2C
verticals have expanded their product categories in the hope of drawing more
traffic and increasing their scale economy.
Exhibit 8: 2006 – 2015e Total transaction value of China’s online retail market
3,000
2,500
2,000
1,500
1,000
500
0
Source: iResearch
113%
129%
26 56 128
105%
263
75%
461
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
68%
774
53%
1,184
1,569
33%
2,012
2,551
28% 27%
2006 2007 2008 2009 2010 2011 2012e 2013e 2014e 2015e
Transaction value (billion yuan) Yoy growth (%)
140%
120%
100%
80%
60%
40%
20%
0%
17

V. Recent developments
1. Development of private labels and proprietary brands is gaining
attention; some department store operators are striving to nurture
their own in-house buyers
Currently, most department stores in China still lack competent buyers to
source their own brands or products. As a result, the merchandise and brand
mix remains very similar across department stores. In recent years, some
department store operators have realized that individual store labels not only
allow them to better differentiate from competitors, but also offer them better
margins as they deal directly with brand owners or suppliers and thus can save
on the commissions for middlemen. Indeed, to develop their own store labels or
proprietary brands, some department stores have stepped up efforts to nurture
their own merchandisers and buyer team. For instance, Wangfujing
Department Store has started to train up its own professional buyers and
develop its own store labels. Direct merchandise sales in Wangfujing’s Beijing
stores reached 200 million yuan in 2011. Parkson also hopes to increase direct
sales proportion by introducing exclusive apparel brands in its stores (started
first in its Beijing stores).
It is believed that an increasing number of department store operators in China
will start experimenting new merchandising practices, in particular, to increase
direct merchandise sales and develop their own store labels. Indeed, a number
of department stores in China have launched their own fashion store labels in
recent years. For instance, Intime Department Store launched another
proprietary brand “Mangano” in West Lake Intime Department Store in
September 2012 after successfully introducing “Justin Intime” in 2009.
Meanwhile, Tee Mall in Guangzhou also unveiled its private label “Teem
Quality” , primarily selling women’s woolen sweaters at this stage.
Having said that, for most department store operators, it is not an easy task to
develop private labels. Firstly, when developing private labels, department
store operators need to have a large market share to enjoy an economy of
scale. However, the department store sector in China is very fragmented.
Secondly, private label operation model is very different from concessionaire
model, which requires another type of management skill set; department store
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
18

operators need to invest money and time to set up a new team and hire related
buyers and talents to work on the new model. Thirdly, department store
operators also need to bear the risk of holding high inventory after launching
their private labels.
2. Department stores with distinct themes and positioning are winning
appeal
Competition among department store operators is fierce; this is especially true
in China since most of the department stores in China are running under
concessionaire model. Apart from nurturing professional buyers and increasing
the proportion of direct merchandise sales, some department store operators
have refined their market positioning strategies to cater to specific customer
demographics.
Department stores with distinct themes and positioning have emerged to cater
to specific market segments such as luxury department stores, discount
department stores, department stores for youth, etc. For instance, in view of
the growing high-end market, Wanda Department Store is reportedly planning
to open three luxury department stores in Wuhan, Taiyuan and Changsha;
these luxury department stores will follow the layout of shopping malls by
housing more international luxury brands. As reported, more than 60
world-famous luxury brands have signed initial agreement with Wanda Group.
Other department store operators have also sought to differentiate and attract
different consumer groups by launching sub-brands. Some examples include
Beijing Wangfujing Department Store (Group) Co Ltd, apart from its Wangfujing
Department Stores, the company has also introduced its sub-brand hQ (hQ 尚
客); Dalian Dashang has also opened Mykal (麥凱樂) to target higher-end
consumers and Kingson Department Store ( 千盛百貨) to target trendy
youngsters. In October 2012, Mopark (摩登百货) announced to open its new
boutique department store ( 摩 登 新 天 地 ) at Metropolitan Plaza
Guangzhou, targeting consumers with good fashion sense.
3. Some department store operators adopt a hybrid model of
“department store plus shopping mall”
Keen competition and growing popularity of shopping malls have put
considerable pressure on department store operators; to stay afloat of the
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
19

competition, some department store operators have started to revamp their
stores by incorporating various types of entertainment facilities as well as
catering services in their stores. They adopt a hybrid model of “department
store plus shopping mall”, i.e. shopping mall store layout but largely running
under a concessionaire business model. This not only allows department
stores to offer one-stop shopping experience to customers, but also enables
them to diversify their income streams.
A typical example is Wangfujing
Department Store Group. It has
launched a series of revamping
programs since March 2010 to
introduce various complementary
facilities including cinemas, playing
areas for kids, catering services,
etc. at some of its Wangfujing
Department Stores. It is reported
that Wangfujing Department Store
is planning to open four to six
stores in Sichuan province in the
coming three years; all of them will be operated under the shopping mall
format.
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
20

Department stores vs. shopping malls
Some industry experts pointed out that shopping malls are getting more
popular in cities with higher consumer spending, while department stores are
more sustainable in lower-tier cities. According to Macquarie Research,
department stores account for 70% of the existing retail supply in tier one and
two cities, and 85% of the retail supply in tier three cities.
Below is the comparison of department store and shopping mall:
Department store Shopping mall
A retail format Mix of retail formats
Concessionaire model, charging a
commission rate on gross sales with a
minimum sales guarantee
Can issue gift card (which can
guarantee sales)
Merchandise categories are quite
standardized; less variety in tenant mix
More appropriate for brands that are not
very well-known to Chinese consumers
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Receive rental income from tenants
Difficult to forecast and guarantee
rental return, especially in tier one and
two cities
Good tenant mix that offers a wide
variety of brands or shops
Less appropriate for tier two and three
cities with lower brand awareness
4. Some department store operators have gone online; yet, most are not
very successful
The number of online shoppers in China has increased tremendously in recent
years; according to the China Internet Network Information Centre, the number
of online shoppers reached 210 million as of June 2012, accounting for 39.0%
of China’s Internet population. To ride on the wave of the booming online
market, a number of department store operators such as New World, Intime,
Rainbow, Xidan and Wangfujing, etc. have launched their online stores, hoping
to improve sales and snatch more market share in the online market.
Exhibit 9 shows some of the major department store operators with their own
e-commerce operations.
21

Exhibit 9: Selected department store operators with e- commerce operation (as of July
2012)
Enterprise Online retail platform
Dalian Dashang Group Co., Ltd.
大連大商集團有限公司
Jiangsu Wenfeng Great World Chainstore
Development Co., Ltd.
文峰大世界連鎖發展股份有限公司
Beijing Wangfujing Department Store (Group)
Co., Ltd.
北京王府井百貨(集團)股份有限公司
Rainbow Department Store Co., Ltd.
天虹商場股份有限公司
Golden Eagle Retail Group Limited**
金鷹商貿集團有限公司
Hefei Department Store Group Co., Ltd.
合肥百貨大樓集團股份有限公司
Intime Department Store (Group) Co., Ltd.
銀泰百貨(集團)有限公司
Shandong Weifang Department Store (Group)
Co., Ltd.
山東濰坊百貨集團股份有限公司
Guangzhou Grandbuy Co., Ltd.
廣州市廣百股份有限公司
Jinan Hualian Commercial Group
濟南華聯商廈集團股份有限公司
Nanjing Central Emporium Group Stocks Co.,
Ltd.
南京中央商場股份有限公司
Guangzhou Friendship Group Co., Ltd.
廣州友誼集團股份有限公司
Handan Sunshine Department Store (Group) Co.
Ltd.
邯鄲市陽光百貨集團總公司
Beijing Cuiwei Plaza Shopping Center
北京翠微大廈股份有限公司
Guangxi Nancheng Stores Joint-stock Co., Ltd.
廣西南城百貨股份有限公司
Tangshan Department Store Group
唐山百貨大楼
Source: Company websites
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
www.66buy.cn
www.wfdsj.com.cn/shop/default.aspx
www.goonow.com
www.myrainbow.cn
www.goodee.cn/eshop
www.bdemall.com
www.yintai.com
www.92xmf.com
www.igrandbuy.com
124.128.251.234
njzysc.tmall.com
mall.cgzfs.com
www.ygttg.com
www.cwjt.com
www.nnbh.cn
shop4139.ltwj.cn
22

Some early movers include Xidan Department Store, which set up its
e-commerce platform
(igo5.com) as early as 1998;
Wangfujing Department
Store Group set up its online
platform (www.goonow.com)
in 2007 and plans to further
invest 100 million yuan in
building a complete online
shopping operating platform.
Other recent joiners include
Parkson, its online platform -
Parkson emall- has come into
operation in September
2012.
Having said that, not every
department store player can
develop a successful online platform; many of these online websites just serve
as online showrooms, displaying selected in-store items. Moreover, many
department store operators may not be able to deal with the huge number of
online orders in a timely and cost effective manner. This is attributable to the
fact that the business model for online business is very different from that of
traditional department store. Many traditional department store operators are
not familiar with selling online; besides, they may not have the necessary hard
and soft infrastructure to support their online operation.
5. Non-core commercial areas and lower-tier cities are becoming the
new frontiers
Prime locations are of strategic importance to department stores as they are in
a better position to attract and retain traffic. However, in many key cities, most
of the core locations in commercial areas are already saturated. Many
department store operators are looking for opportunities in non-core
commercial areas with good public transport facilities/infrastructure. Indeed,
good locations are no longer confined only to core commercial areas. New
shopping districts with large residential communities nearby and effective
public transportation are increasingly favored by department store operators.
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
23

On the other hand, fierce competition in tier 1 and tier 2 cities are driving many
department store operators to redirect their expansion plans to lower-tier cities;
both domestic and foreign department store operators are actively exploring
the potentials of the lower-tier cities, hoping to further extend their customer
reach. For instance, New World Department Store and Rainbow Department
Store have both announced plans to step up their expansion in tier 3 and tier 4
cities.
6. Increasing investment in the commercial property market
To better secure store locations, some department store operators have
invested in the commercial property market. Department store operators with
little commercial property background normally would lease the majority of their
stores. Some of them may be tenants of shopping malls; they may have less
control over their store size, layout, etc. In contrast, those department stores
with stronger commercial property background may have more control over
store design and store size.
Some prominent department store operators with strong commercial property
background in China include Intime Department and Golden Eagle Retail
Group. These companies usually have higher ratio of self-owned properties,
comparing to their peers. Moreover, they are also the vanguard in adopting the
hybrid model of “department store plus shopping mall”.
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
24

© Copyright 2012 Li & Fung Research Centre. All rights reserved.
25
Appendix 1. Store locations of major department stores in China (as of July 2012)
City Province
Friendship
上海友誼
集團
Chongqing
Commerce
(Group)
Ltd.
Dashang
Group
重慶商社 大商股份
Yinzuo Wangfujing
山東銀座
商城
王府井
百貨
Changchun
Euro Asia
Group
長春歐亞
集團
Rainbow Zhenhua
天虹商場
振華百貨
集團
Golden
Eagle
金鷹國際
商貿集團
Parkson New World
百盛商業
集團
新世界
百貨
Hefei
Department
Store
合肥百貨
大樓
Beijing
Capital
Retailing
Group
北京首商
集團
Intime
銀泰百貨
Liaoning
Xinglong
Big Family
寧興隆
大家庭
Zhengzhou
Dennis
Department
Store
鄭州
丹尼斯
M aoye
茂業國際
Guangzhou
Grandbuy
廣百股份
有限公司
Jinan
Renmin
Shopping
Group
濟南華聯
商廈
Nanjing
Central
Emporium
Group
南京中央
商場
Beijing
Cuiwei
Plaza
Shopping
Center
Guangzhou
Friendship
Group
Charter
Group
Limited
Shunyi
Guotai
Department
Store
Group
北京翠微 廣州友誼 卓展集團 順義國泰
South
Guangzhou 廣州 Guangdong 1 13 5
Shenzhen 深圳 Guangdong 22 6 1 10
Dongguan 東莞 Guangdong 6
Huizhou 惠州 Guangdong 2 1
Shantou 汕頭 Guangdong 1
Zhuhai 珠海 Guangdong 1
Shunde 顺德 Guangdong
Zhaoqing 肇庆 Guangdong 1
Jieyang 揭阳 Guangdong 1
Zhongshan 中山 Guangdong
Heyuan 河源 Guangdong 1
Maoming 茂名 Guangdong 1
Foshang 佛山 Guangdong 1 1 2
Zhanjiang 湛江 Guangdong 1 2
Nanning 南寧 Guangxi 1 2 11 2
Wuzhou 梧州 Guangxi 3
Liuzhou 柳州 Guangxi 6
Yulin 玉林 Guangxi 2 1
Hechi 河池 Guangxi 1
Baise 百色 Guangxi 2
Yizhou 宜州 Guangxi 1 1
Guigang 贵港 Guangxi
Guilin 桂林 Guangxi 1 2
Xiamen 廈門 Fujian 3
Fuzhou 福州 Fujian 1
Quanzhou 泉州 Fujian 1
East
Shanghai 上海 - 36 1 4 9
Hangzhou 杭州 Zhejiang 1 1 7
Huzhou 湖州 Zhejiang 1
Jiaxing 嘉興 Zhejiang 1 1
Changshu 常熟 Zhejiang 1
Ningbo 寧波 Zhejiang 1 2 4
Zhoushan 舟山 Zhejiang 1
Wenzhou 溫州 Zhejiang 2 1
Jinhua 金華 Zhejiang 3
Cixi 慈溪 Zhejiang 1
Yiwu 义乌 Zhejiang 1
Zhuji 诸暨 Zhejiang 13
Shengzhou 嵊州 Zhejiang 2
Shaoxing 紹興 Zhejiang 1 4
Nanjing 南京 Jiangsu 5 1 4
Suzhou 蘇州 Jiangsu 2 1 2
Wuxi 無錫 Jiangsu 1 2 1
Nantong 南通 Jiangsu 1
Lianyungang 连云港 Jiangsu 1
Yangzhou 揚州 Jiangsu 2
Xuzhou 徐州 Jiangsu 2 1
Jining 济宁 Jiangsu 1
Taizhou 台州 Jiangsu 1
Taizhou 泰州 Jiangsu 1 1 1
Huaian 淮安 Jiangsu 1
Yancheng 鹽城 Jiangsu 2
Changzhou 常州 Jiangsu 1 3 1 1
Suqian 宿遷 Jiangsu 1
Zhenjiang 镇江 Jiangsu
Liyang 溧阳 Jiangsu
Jintan 金坛 Jiangsu
Hefei 合肥 Anhui 3 2 66 1
Ma'anshan 马鞍山 Anhui
Bangbu 蚌埠 Anhui 21
Tongling 铜陵 Anhui 4
Huangshan 黄山 Anhui 6
Huainan 淮南 Anhui 2
Liu'an 六安 Anhui 1
Haozhou 毫州 Anhui 1
Chaohu 巢湖 Anhui 1
Wuhu 芜湖 Anhui 1
Shucheng 舒城 Anhui 1
Huaibei 淮北 Anhui 1
Hunan
Jiahui
Department
Store
湖南佳惠
百貨
Guangxi
Nancheng
Stores
廣西南城
百貨
Xiongfeng
Group
雄風集團
Nanning
Department
Store
南寧百貨
大樓
JiaHua
Stores
Holdings
Limited
百佳華
百貨
Tangshan
Department
Store Group
唐山百貨
大樓

© Copyright 2012 Li & Fung Research Centre. All rights reserved.
26
Appendix 1. Store locations of major department stores in China (as of July 2012) (Cont’d)
City Province
Friendship
上海友誼
集團
Chongqing
Commerce
(Group)
Ltd.
Dashang
Group
重慶商社 大商股份
Yinzuo Wangfujing
山東銀座
商城
王府井
百貨
Changchun
Euro Asia
Group
長春歐亞
集團
Rainbow Zhenhua
天虹商場
振華百貨
集團
Golden
Eagle
金鷹國際
商貿集團
Parkson New World
百盛商業
集團
新世界
百貨
Hefei
Department
Store
合肥百貨
大樓
Beijing
Capital
Retailing
Group
北京首商
集團
Intime
銀泰百貨
Liaoning
Xinglong
Big Family
寧興隆
大家庭
Zhengzhou
Dennis
Department
Store
鄭州
丹尼斯
M aoye
茂業國際
Guangzhou
Grandbuy
廣百股份
有限公司
Jinan
Renmin
Shopping
Group
濟南華聯
商廈
Nanjing
Central
Emporium
Group
南京中央
商場
Beijing
Cuiwei
Plaza
Shopping
Center
Guangzhou
Friendship
Group
Charter
Group
Limited
Shunyi
Guotai
Department
Store
Group
北京翠微 廣州友誼 卓展集團 順義國泰
North
Beijing 北京 - 1 6 3 3 6 10 2 6 13
Tianjin 天津 - 1 1 1
Hohhot 呼和浩特 Inner Mongolia 1
Baotou 包頭 Inner Mongolia 2
Erdos 鄂爾多斯 Inner Mongolia 1
Taiyuan 太原 Shanxi 1 2 1
Qingdao 青島 Shandong 2 1 1
Yantai 煙台 Shandong 1 1 61 1
Weihai 威海 Shandong 2 1 16
Zibo 淄博 Shandong 1 9 3 5
Linyi 臨沂 Shandong 8 1 1
Jinan 济南 Shandong 1 23 2 1 24
Dongying 东营 Shandong 1 7 3
Laiwu 莱芜 Shandong 1 2
Taian 泰安 Shandong 6
Binzhou 滨州 Shandong 7
Rizhao 日照 Shandong 3
Tengzhou 滕州 Shandong 2
Anqiu 安丘 Shandong 1
Weifang 潍坊 Shandong 3 3
Heze 菏泽 Shandong 2
Xintai 新泰 Shandong 2
Liaocheng 聊城 Shandong 3 9
Xingtai 邢台 Shandong 1
Qufu 曲阜 Shandong 1
Zhangqiu 章丘 Shandong 1
Jining 济宁 Shandong 4
Dezhou 德州 Shandong 2
Zaozhuang 枣庄 Shandong 3
Hebi 鹤壁 Shandong 1
Leling 乐陵 Shandong 1
Qinghuangdao 秦皇島 Hebei 1
Baoding 保定 Hebei 1
Shijiazhuang 石家庄 Hebei 1 1
Tangshan 唐山 Hebei 1
Wuan 武安 Hebei
Handan 邯郸 Hebei
Zhangjiakou 張家口 Hebei 1
Shenyang 瀋陽 Liaoning 1 4 1 1 3 4 1 1
Dalian 大連 Liaoning 41 2 1
Anshan 鞍山 Liaoning 1 1 1
Wafangdian 瓦房店 Liaoning 4
Jinzhou 锦州 Liaoning 4
Benxi 本溪 Liaoning 5
Dandong 丹东 Liaoning 3
Tieling 铁岭 Liaoning 1 4
Paijin 盘锦 Liaoning 3 6
Fushun 抚顺 Liaoning 5
Fuxin 阜新 Liaoning 3 1
Chaoyang 朝阳 Liaoning 2 1
Yingkou 营口 Liaoning 1 2
Huludao 葫芦岛 Liaoning 2 1 1
Gaizhou 盖州 Liaoning 1
Xingcheng 兴城 Liaoning 1
Xinmin 新民 Liaoning 1
Liaoyang 辽阳 Liaoning 2
Changchun 长春 Jilin 3 1
Jilin 吉林 Jilin 2 2
Yanji 延吉 Jilin 1
Huichun 珲春 Jilin 1
Harbin 哈爾濱 Helongjiang 3 1 1 1
Shuangyashan 双鸭山 Helongjiang 2
Daqing 大庆 Helongjiang 8
Qiqihaer 齐齐哈尔 Helongjiang 1
Qitaihe 七台河 Helongjiang 1
Yichun 伊春 Helongjiang 1
Mudanjiang 牡丹江 Helongjiang 4
Jixi 鸡西 Helongjiang 2
Heihe 黑河 Helongjiang 1
Tuohua 妥化 Helongjiang 1
Jiamusi 佳木斯 Helongjiang 4
Hunan
Jiahui
Department
Store
湖南佳惠
百貨
Guangxi
Nancheng
Stores
廣西南城
百貨
Xiongfeng
Group
雄風集團
Nanning
Department
Store
南寧百貨
大樓
JiaHua
Stores
Holdings
Limited
百佳華
百貨
Tangshan
Department
Store Group
唐山百貨
大樓

© Copyright 2012 Li & Fung Research Centre. All rights reserved.
27
Appendix 1. Store locations of major department stores in China (as of July 2012) (Cont’d)
City Province
Friendship
上海友誼
集團
Chongqing
Commerce
(Group)
Ltd.
Dashang
Group
重慶商社 大商股份
Yinzuo Wangfujing
山東銀座
商城
王府井
百貨
Changchun
Euro Asia
Group
長春歐亞
集團
Rainbow Zhenhua
天虹商場
振華百貨
集團
Golden
Eagle
金鷹國際
商貿集團
Parkson New World
百盛商業
集團
新世界
百貨
Hefei
Department
Store
合肥百貨
大樓
Beijing
Capital
Retailing
Group
北京首商
集團
Intime
銀泰百貨
Liaoning
Xinglong
Big Family
寧興隆
大家庭
Zhengzhou
Dennis
Department
Store
鄭州
丹尼斯
M aoye
茂業國際
Guangzhou
Grandbuy
廣百股份
有限公司
Jinan
Renmin
Shopping
Group
濟南華聯
商廈
Nanjing
Central
Emporium
Group
南京中央
商場
Beijing
Cuiwei
Plaza
Shopping
Center
Guangzhou
Friendship
Group
Charter
Group
Limited
Shunyi
Guotai
Department
Store
Group
北京翠微 廣州友誼 卓展集團 順義國泰
Central
Zhengzhou 鄭州 Henan 4 1 1 78
Luoyang 洛陽 Henan 1 10 1
Xinxiang 新乡 Henan 2 1
Luohe 漯河 Henan 2 1
Xuchang 许昌 Henan 1
Xinyang 信陽 Henan 1 2
Kaifeng 开封 Henan 1
Puyang 濮阳 Henan 3
Jiaozuo 焦作 Henan 6
Pingdingshan 平顶山 Henan 3
Nanyang 南阳 Henan 3
Anyang 安阳 Henan 3
Shangqiu 商丘 Henan 1
Shouguang 寿光 Henan 2
Wuhan 武漢 Hubei 1 1 6 1 1
Ezhou 鄂州 Hubei 1
Xiangyang 襄陽 Hubei 1
Xianning 咸寧 Hubei 1
Suizhou 隨州 Hubei 1
Xiantao 仙桃 Hubei 1
Changsha 長沙 Hunan 1 1 1 1
Yueyang 岳陽 Hunan 1
Loudi 娄底 Hunan 1 1
Huaihua 怀化 Hunan 26
Shaoyang 邵阳 Hunan 6
Hongjiang 洪江 Hunan 1
Jishou 吉首 Hunan 3
Zhuzhou 株州 Hunan 1
Nanchang 南昌 Jiangxi 3 1
West
Chongqing 重慶 - 2 176 2 3 1 1 2 1
Chengdu 成都 Sichuan 3 1 2 1 1 1
Dazhou 达州 Sichuan 2
Mianyang 綿陽 Sichuan 1
Leshan 乐山 Sichuan 2
Guangan 广安 Sichuan 3
Luzhou 泸州 Sichuan 3
Yuechi 岳池 Sichuan 1
Zigong 自貢 Sichuan 2 1
Guiyang 貴陽 Guizhou 3
Liupanshui 六盤水 Guizhou 1 7
Kaili 凯里 Guizhou 6
Renhuai 仁怀 Guizhou 2
Qingzhen 清镇 Guizhou 1
Tongren 铜仁 Guizhou 1
Bijie 毕节 Guizhou 3
Zunyi 遵義 Guizhou 2 1 17
Xi'an 西安 Shaanxi 1 2 4 2
Xianyang 咸阳 Shaanxi
Kunming 昆明 Yunnan 1 2 2 1
Lanzhou 蘭州 Gansu 1 1 1 1
Xining 西寧 Qinghai 1 3
Urumqi 烏魯木齊 Xinjiang 1 1 1
Total 43 189 136 104 24 6 52 99 30 55 38 103 17 31 25 106 21 23 24 8 6 6 3 13 76 28 21 4 14
Hunan
Jiahui
Department
Store
湖南佳惠
百貨
Guangxi
Nancheng
Stores
廣西南城
百貨
Xiongfeng
Group
雄風集團
Nanning
Department
Store
南寧百貨
大樓
JiaHua
Stores
Holdings
Limited
百佳華
百貨
Tangshan
Department
Store Group
唐山百貨
大樓

Appendix 2: Major commercial districts in China, by region
Southern Region
City Major Commercial
Guangzhou
Districts
Tianhe ( 天 河 ),
Shangxiajiu ( 上 下 九 ),
Railway station business
area ( 火 車 站 商 圈 ),
Beijing Road ( 北京路),
Nonglin (農林)
Shenzhen Dongmen ( 東 門 ),
Huaqiangbei ( 華 強 北 ),
Nanshan ( 南 山 ),
Renminnan ( 人民南),
Shennanzhong (深南中),
Huaqiaocheng (華僑城),
Baoan (寶安), Longgang
(龍崗), Guomao (國貿),
Diwang (地王)
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Major Department Stores and
Shopping Malls
Friendship ( 友 誼 商 店 ),
Wangfujing Department Store
( 王府井百貨大樓), TEEMALL
(天河城廣場), Xindaxin (新大新
百貨), GrandBuy ( 廣州 廣百 ),
JUSCO (吉之島), La Perle (麗柏
廣場), Taikoo Hui ( 太 古 匯 ),
Grandview Mall ( 正佳廣場),
Onelink Walk Shopping Mall (萬
菱匯)
The MIXc (萬象城), KK MALL
( 京基百納空間), Maoye
Department Store ( 茂業百貨),
Coco Park, Rainbow
Department Store ( 天虹百貨),
Futian Central Walk (福田怡景
中心城), Nanshan Coastal City
( 南 山 海 岸 城 ), Yitian Holiday
Plaza (益田假日廣場)
28

Eastern Region
City Major Commercial Districts Major Department Stores
and Shopping Malls
Shanghai
East Nanjing Road (南京東
路), West Nanjing Road (南
京西路), Huaihai Central
Road (淮海中路), Xujiahui
(徐家匯), Lujiazui (陸家嘴),
Sichuan North Road (四川
北路), Xinkezhan (新客站),
Renmin Plaza (人民廣場),
Wujiaochang ( 五角場),
Zhangyang Road (張楊路),
Zhongshangongyuan (中山
公園), Jingansi ( 靜安 寺),
Caojiadu (曹家渡)
Nanjing Xinjiekou ( 新 街 口 ),
Shanxilu (山西路), Hunanlu
( 湖南路), Zhongyangmen
(中央門), Fuzimiao (夫子廟)
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Shanghai Xintiandi (上海
新天地), The Exchange
Soho (上海 SOHO 東海廣
場), Wanda Plaza (萬達
廣 ), New World
Department Store (新世
界百貨), Shanghai CR
Times Square (上海時代
廣場), Shanghai IFC (上
海國金中心), Shanghai
International Commerce
Centre (上海環貿廣場),
Century Link ( 世紀匯),
Walton Plaza (華爾登廣
場), Westgate Mall (梅龍
鎮廣場), Plaza 66 (恒隆
廣 場 ), The Grand
Gateway ( 港匯廣場),
CapitaMall (嘉信茂廣場),
Parkson (百盛), Raffles
City ( 東 福 士 廣 場 ),
Shanghai Joy City (上海
大 悅 城 ), Jiu-guang
Department Store (久光
百貨)
Grand Ocean ( 大 洋 百
貨 ), New World
Department Store (新世
界百貨), Golden Eagle
( 金 鷹 ), Nanjing
International Center ( 南
京國際廣場)
29

Northern Region
City City Major Commercial
Beijing
Districts
Wangfujing ( 王 府 井 ),
Zhongguancun (中
關村), Chongwenmen (崇
文門), Xidan (西
單 ), Dangdai ( 當代),
Guomao (國貿),
Yansha (燕莎), Chaowai
(朝外), Gongzhufen (公
主墳), Yaao ( 亞奧),
Jinrong Street (金融街),
Shangdi (上地), Wangjing
(望京), Dongzhimen
(東直門), Jianwai (建外),
Fuchengmen (阜城門),
Qianmen (前門)
Shenyang Zhong Street ( 中街),
Taiyuan Street (太原街),
Beixing ( 北行), Jinlang
(金廊), Xinshun ( 興順),
Nanta (南塔), Wu’ai (五
愛)
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Major Department Stores
and Shopping Malls
Sanlitun Village (三里屯),
Wanda Plaza (萬達廣場),
Chaoyangmen SOHO (朝
陽 門 SOHO), Grand
Constellation Shopping
Mall ( 置 地 星 座 商 場 ),
U-Space Mall ( 優士閣商
場), Xidan Cultural Centre
(西單文化 廣場), Huanan
Building ( 華 南 大 廈 ),
Huawei Centre (華威大廈),
Jing Tong Shops (京通商
鋪), Oriental Plaza (東方廣
場), CapitaMall (嘉信茂廣
場), Hualian (華聯), Intime
Lotte ( 樂天銀泰), The
Place( 世貿天階), Youyi
Shopping City (燕莎友誼商
城)
Shenyang Bailian
Shopping Mall (瀋陽百聯購
物中心), Palace 66 (皇城恒
隆廣場), Parkson (百盛),
Shenyang New World
Department Store (瀋陽新
世 界 百 貨 ), Shenyang
Charter Shopping Centre
( 瀋 陽 卓 展 購 物 中 心 ),
Isetan (瀋陽伊勢丹百貨)
30

Central Region
City Major Commercial
Wuhan
Western Region
Districts
Wuguang ( 武 廣 ),
Wangjiawan ( 王家灣),
Zhongjiacun ( 鍾 家 村 ),
Xudong ( 徐 東 ),
Jiedaokou ( 街 道 口 ),
Zhongnan ( 中 南 ),
Simenkou ( 司門口),
Wangjiadun ( 王家墩),
Hanzheng Street ( 漢正
街),
Jianghan Road (江漢路),
Tangjiadun ( 唐 家 墩 ),
Luxiang (魯巷)
City Major Commercial
Chongqing
Districts
Guanyinqiao ( 觀音橋),
Jiefangbei (解放碑),
Shapingba ( 沙 坪 壩 ),
Yangjiaping (楊家坪),
Dadukou ( 大 渡 口 ),
Nanping (南坪),
Yongchuan Renmin
Plaza (永川人民廣場),
Yongchuan Yuxi Plaza
(永川渝西廣場), Kaixian
(開縣), Wanzhou (萬州),
Jiangjin (江津)
Source: Li & Fung Research Centre
© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Major Department Stores
and Shopping Malls
Wuhan Tiandi (武漢天地),
Chicony ( 群 光 廣 場 ),
Wuhan International Plaza
(武漢國際廣場購物中心),
New Century Department
Store (新世紀百貨), Wuhan
Plaza (武漢廣場), Wanda
Plaza ( 萬 達 廣場 ), Intime
Department Store (銀泰百
貨)
Major Department Stores
and Shopping Malls
Metropolitan Plaza ( 大都
會廣 場), Xicheng Tianjie
( 西 城 天 街 ), Chongqing
Tiandi (重慶天地), Wanda
Plaza ( 萬達廣場), Times
Square ( 時 代 廣 場 ),
CapitaMall (嘉信茂廣場 ),
Wangfujing (王府井), New
Century Department Store
(新世紀百貨), Parkson (百
盛)
31

© Copyright 2012 Li & Fung Research Centre. All rights reserved.
Though Li & Fung Research Centre endeavours to have information presented in this document as accurate and updated as
possible, it accepts no responsibility for any error, omission or misrepresentation. Li & Fung Research Centre and/or its associates
accept no responsibility for any direct, indirect or consequential loss that may arise from the use of information contained in this
document. Reproduction or redistribution of this material without Li & Fung Research Centre’s prior written consent is
prohibited.