SHANGHAI: After operating for nearly three decades in one of Shanghai’s busiest business districts, Pacific Department Store Co Ltd is ready to say farewell to its shoppers.
Once a bustling landmark department store in the sprawling city, the store will close its Xuhui district site on Aug 31, with the decision being made as its licensing agreement will expire this year, said an announcement by the department store.
“I’ve made a lot of memorable purchases at the department store, which was once my favourite shopping destination back in the early 2000s,” said Li Yu, a white-collar worker in her forties. Though sad about the loss of the store, Li admitted it’s been years since she last visited the store.
Once regarded as a shopping icon among locals, the old-fashioned department store gradually lost its sheen when new shopping malls mushroomed in recent years. Its closure reflects the city’s ever-changing commercial sector, experts said.
Under Taiwan’s Far Eastern Group, Pacific Department Store entered the retail market on the Chinese mainland in 1993.
It operated 12 branches in cities including Beijing, Chongqing, Chengdu of Sichuan province and Dalian of Liaoning province in its heyday, including three in Shanghai.
But the other two stores in the city were closed in 2016 and 2020.
Qi Xiaozhai, vice-chairman of the Commerce Economy Association of China, said the closure of the Pacific Department Store is more than the expiration of a collaboration agreement.
Along with rapid economic development, consumers’ habits and preferences are evolving quickly, and some old-style department stores have failed to adapt to the new changes, Qi said. — China Daily/ANN”If we look back on past days, we can find similar stories like that of the Pacific Department Store always being repeated. The only solution to stay competitive in the retail market is to constantly adapt to consumers’ new needs,” Qi added.
There used to be four classic city-level shopping districts in Shanghai — Nanjing Road, Huaihai Road, Sichuan Road and Shanghai Yuyuan Tourist Mart. Along with the urban development of the city, such districts doubled to eight in the 1990s.
During the 1990s, a handful of overseas-funded department stores including Pacific Department Store were introduced into the city as a brand new commercial model. They soon dominated the retail market with fashionable goods and modern marketing strategies.
But as Shanghai’s city-level business/shopping/commercial districts expanded to 29, including both downtown and suburban areas, stereotypical department stores began losing ground to the thriving e-commerce sector and innovative new malls, which are full of internet sensation brands, debut stores, food and beverage choices, and entertainment facilities, Qi said.
While Pacific Department Store braces to close shop for good, its neighbour — Shanghai Sixth Department Store — has taken a different strategy by spending 798 million yuan during an overhaul, according to the local Xinmin Evening News.
The retailers’ different responses reflect how Shanghai’s commercial districts are evolving as the city transforms into an international consumption hub.
“Changes” should always be the keyword for any retail business hoping to retain its appeal. A shopping mall that stays unchanged for 20 years is typically doomed to fade away, said Yang Yuechen, head of research and consultancy for Shanghai and Beijing sites at real estate consultancy Knight Frank.
Yang said various districts in the city have striven to follow the latest consumption trends, tapping into the preferences of young generations by introducing a variety of consumption experiences including playing Counter-Strike, VR games, mini theatres, live bands as well as cultural and art exhibitions.
Apart from Pacific Department Store and Shanghai Sixth Department Store, Xuhui district will continuously promote overall renewal by introducing Chinese fashion brands as well as supporting the development of the night time economy, said Cao Liqiang, Party secretary of the district, during a news conference in late July.
Cao said the district has in the past two years developed a series of landmark projects including the mega commercial complex ITC, a sky bridge linking major facilities in the area, and Zikawei Library.
Consisting of two high rises with a height of 370 metres and 220 m, respectively, and a flagship mall of some 230,000 square metres, ITC will complete its major commercial space in 2024, said its developer Sun Hung Kai Properties.
The accelerated development of the ITC and the transformation of the two department stores will make shopping in the area more convenient and Xujiahui business district more prosperous, said Chen Yong, director of Xuhui district’s commission of commerce.
The upgrade of Xuhui is not an isolated event. The Middle Huaihai Road business district, one of the city’s traditional high streets, is also welcoming a face-lift by inviting well-known brands to open outlets along the 120-year-old street.
In a bid to upgrade itself, the Middle Huaihai Road business district invited quality brands from home and abroad to the area during an investment conference held on July 26, and inked deals with a batch of well-known brands including US-based fried chicken brand Popeyes, eastday.com reported.
When Popeyes opened its first flagship restaurant on the Chinese mainland in 2020, a record was set as people queued for eight hours to get a bite of its signature products. Now it just reopened its Middle Huaihai Road store on Aug 19 after a change of its Chinese operator, which is reported to be Cartesian Capital Group, operator of Tim Hortons cafes across the nation.
Having a history that can be traced back to 1900, the Middle Huaihai Road business district has experienced quite a few ups and downs. Through a set of innovations and upgrades, even its previously lower revenue-earning middle section of the road has boosted its appeal among young shoppers thanks to the iconic TX Huaihai Mall.
“TX Huaihai provides an example of how a relatively smaller-sized mall can adapt to special conditions,” said Qi.
Targeting younger shoppers, TX Huaihai holds many activities including inviting artists and designers, which successfully attracts young people to pay visits to the mall either for exhibitions or to buy debut products.
Liu Jiayi, a fashion designer whose job is to visit various shopping centres across the nation, said the business districts in Shanghai are on par with other global metropolises, both in terms of fashion and shopping experience.
The 29-year-old Liu particularly favours the West Nanjing Road business district.
Indeed, that district is known for its internationalisation and high-end service, and has also experienced a slew of renovations and upgrades in recent years. Its goal is to have its total annual retail revenue exceed 100 billion yuan by the end of the 14th Five-Year Plan (2021-25) period, according to the district government.
Yang said as the retail sector in China is past its infancy and the fast development phase, it requires every retail operator to be creative in their upgrades.
“It will be very difficult, not only because of the fierce competition, such as constantly upgrading requirements for shopping, dining and entertainment, but also due to competition from e-commerce,” Yang said.
“Especially for young consumers, in order to persuade them to leave their cosy homes to go to physical stores, shopping centres need to have offerings that they cannot get from online shopping, and keep them coming back with abundant and innovative choices,” said Yang.
Against the backdrop of the central government’s call for restoring and expanding consumption and Shanghai’s goal of becoming an international consumption hub, there have been intense efforts made by malls and business districts. Qi suggested each mall or department store establish its unique style.
“It is rare for a business district to become successful by only having one great shopping mall. Instead, a business district that boasts a variety of shopping centres differentiated from each other in operating formats and brands will make the area more attractive and influential,” Qi said.
The changes made in business districts may mean the end for shopping destinations like Pacific Department Store, but the shopping area will still be there, and hopefully come back with a better identity, Yang said. — China Daily/ANN
