第一太平戴维斯2024中国零售商业趋势报告（英）-25页_6mb

Retail Trends 2024 Summary

Core Content

In 2024, the retail sector in China is undergoing significant transformation driven by shifting consumer behavior, urban development, and sustainability initiatives. The market is increasingly focused on experiential and value-driven consumption, with a growing emphasis on leisure, culture, and community engagement. New formats and strategies are emerging to cater to these evolving preferences, while the integration of retail with ESG (Environmental, Social, and Governance) principles is gaining momentum. Additionally, the introduction of Retail REITs (Real Estate Investment Trusts) is reshaping how retail assets are managed and monetized.

Main Trends and Key Insights

1. The Comeback of Entertainment and Leisure

• Consumer Demand: There is a strong resurgence in entertainment and leisure activities, with consumers seeking escape, relaxation, and unique experiences.
• Leisure Tenants: Leisure and activity-based tenants such as gyms, live houses, and role-playing game venues are gaining traction, with cities like Shanghai and Wuhan allocating around 16% of shopping mall space to leisure and entertainment.
• New Brand Concepts: Emerging brands and concepts within traditional retail categories are driving leasing demand, especially in the child-related and F&B sectors.
• Creative and Cultural Spaces: Art and exhibition spaces are expanding, emphasizing experiential and cultural offerings over product packaging and marketing.

2. Value for Money and Consumer Rationality

• Rational Spending: Post-pandemic, consumers are more rational in their spending, prioritizing quality, taste, and utility over brand marketing.
• Premium Brands: Despite economic challenges, premium brands like Luckin and Cotti continue to thrive through creative product lines and brand integrity.
• F&B Trends: Casual dining is outperforming fast-food chains, particularly in Shanghai, with a focus on local ethnic cuisines and health-oriented beverages.

3. The Rise of Founder-Led Brands

• Entrepreneurial Wave: Founder-led brands are becoming a significant force in the market, offering unique, community-focused experiences.
• Social Media Influence: These brands leverage social media and content-driven communities to build brand loyalty and attract younger consumers.
• Local Consciousness: There is a growing appreciation for local brands in terms of quality, aesthetics, and trendsetting, especially among younger demographics.

4. Mall Dynamics and Non-Core Locations

• Shift in Footfall: While city centre footfall has recovered, tenant demand remains low. Non-core areas are becoming more attractive for brands seeking to engage with local communities.
• Flexible Formats: Backstreets and side roads are gaining popularity for their organic and experimental nature, offering more flexibility in operating hours and services.
• New Retail Formats: Projects like The Lightbox, The Box, and Dongjiao Memory are redefining the mall experience with community-centric, open-plan designs.

5. Micro Vacations and Travel Integration

• Domestic Tourism: Domestic travel, including staycations, is driving retail demand, especially in cities like Hainan and Yunnan.
• Retail and Culture: Developers are integrating retail with cultural and tourism experiences to cater to the micro-vacation trend, offering a slower, more immersive environment.

6. ESG in Retail

• Sustainability Focus: Global luxury brands are leading the way in ESG (Environmental, Social, and Governance) initiatives, with LVMH and others reducing energy consumption and emissions.
• Green Certifications: Luxury brands like Gucci, Burberry, and Cartier are pursuing LEED and WELL certifications, while skincare brands like Kiehl’s are also adopting sustainable practices.
• Supply Chain Responsibility: Brands are looking beyond physical spaces to ensure sustainability across the entire supply chain, including production, packaging, and transportation.

7. Retail REITs: A New Era in Asset Monetization

• Regulatory Change: China's CSRC announced the expansion of REITs to include retail assets in March 2023, lowering the return requirement to 3.8%.
• First Retail C-REITs: The approval of the first four retail C-REITs by the end of 2023 marks a new era, offering landlords an alternative exit strategy.
• Asset Class Forecast: Over the next two years, 10.2 million sqm of retail supply is expected in 11 key cities. Vacancy rates are projected to improve, and performance differentiation is anticipated.

Key Data and Statistics

• Leisure Tenant Growth: Leisure and entertainment areas in key shopping malls are increasing in share.
• F&B Growth: F&B sector saw a 1.0 percentage point increase in newly-leased spaces in Shanghai.
• Import Growth: Products like unroasted coffee, instant cameras, and whisky have seen more than a twofold increase in import values since 2019.
• Vacancy Rates: Only 41% of core retail areas had vacancy rates below 5% in Q3/2023.
• REITs Data: The first four retail C-REITs include assets from Qingdao MixC, Xixi In City, The Mall of Splendors, and Wumart portfolio.

Conclusion

The retail landscape in 2024 is marked by a shift towards experiential and value-driven consumption, with leisure, culture, and sustainability playing central roles. The rise of founder-led brands and the integration of retail with travel and cultural experiences are reshaping consumer engagement. Meanwhile, the introduction of Retail REITs is opening new avenues for asset monetization, signaling a more diversified and sustainable future for the retail industry.