China’s bricks-and-mortar shopping malls have come under significant pressure in recent years. Despite strong economic growth and rising consumer demand, China faces severe overcapacity of its physical retail space. This is chiefly due to the growing popularity of e-commerce — as of 2018, nearly 33% of all sales in China took place online. These debt-laden malls with shrinking foot traffic are adding to China’s mounting corporate debt, which is larger than its GDP. As a result, mall owners have had to act creatively to bring in customers. The most popular strategy is to shift from a sales-centric business model to an experience-centric business model.
Joy City Property Holdings Limited is an example of a successful deployment of this strategy. By offering a range of integrated services within its portfolio of real estate holdings, Joy City has been able to retain a customer base that is notoriously fickle, price-conscious and lacking in brand loyalty. Joy City used big data analytics to improve its customer retention rate, thereby paving the way for a new kind of retail experience and mall operations management in China. (This report in Chinese.)
