Published : Jan. 21, 2016 - 05:07
Christina Hau, general manager of operations at Wharf Holdings. Lee Min-hee
CHENGDU, China ― Western China is fast emerging as a powerhouse in the global retail market, thanks to the growing spending power of the middle class and support of the local administration, said a Hong Kong-based shopping mall developer working in the region’s Sichuan province.
The southwestern province has a population of over 100 million. Its capital city of Chengdu has 15 million residents, and houses 268 Fortune 500 companies ― the highest number of corporates, investments and industries in western China.
With the central government’s drive to develop western China, on the top of mounting recovery projects for the 2008 earthquake-stricken Sichuan region, the Chengdu residents ― many of whom work in the construction and mining industries ― have created a market that is often referred to as the “Third Luxury City” and the “Fourth Fashion City” in China.
“Western China is quite an attractive market. Before, many people had the desire to spend money but did not have the right place to do so,” said Christina Hau, general manager of operations at Wharf Holdings.
Hau noted that Chengdu and second-tier cities are quite attractive, because the high-end consumer goods market is less heavily saturated than first-tier megalopolises, but people’s consumption power is still quite strong.
“The people of Sichuan are much more laid back (compared to people of first-tier cities) and are ready to enjoy life. They are open-minded and willing to try new things, and they appreciate sophistication,” she said.
“In terms of the potential growth and (its) radius of coverage … the city is huge. This met with the local government’s hope to have a first-tier city (like Beijing, Shanghai, Shenzhen and Guangzhou) and became the main locomotive of our moves,” she added.
Wharf has been one of the most successful partners in Sichuan.
Its Chengdu landmark International Finance Square, comprised of office, residential, hotel and shopping districts, has become the epicenter of the province’s retail, hospitality, business and socializing circles.
On Jan. 14, its shopping center IFS Mall marked its second anniversary, and was congratulated by the local administration, businessmen and celebrities.
Chengdu International Finance Square Mall`s second anniversary event held on Jan. 14. Wharf Holdings
Inside the IFS Mall, the Chinese sister of Hong Kong’s famous Harbour City and Times Square complexes, there are more than 300 premium brands, including about 90 debut stores in Chengdu or Western China.
From Prada, Chanel and Louis Vuitton to department store Lane Crawford and Toys R Us, these outlets are crowded with family vacationers, celebrities and shoppers, marking a 40 percent increase in the number of visitors in 2015 compared to the previous year. The sales grew by 50 percent during the same period.
The Niccolo Chengdu Hotel adjacent to the mall is the upscale version of its Hong Kong sisters, the Marco Polo hotels, providing “timeless” and simple luxury services. The occupancy rate has stayed firmly above 60 percent, nearly double the regional average of 30-40 percent, a Wharf spokeswoman said.
IFS’ office wings host multinational companies and finance institutions. It also supports the local IT start-ups by setting an incubation center, providing office space for fledgling entrepreneurs for a bargain.
The company also operates a fashion (discount) outlet, the Times Outlet, near Chengdu Airport and is developing a huge residential complex nearby.
Wharf is developing International Finance Squares in other western Chinese cities. The $57 billion-company will open squares in Changsha, Chongqing, Suzhou and Wuxi.
“We believe these places will keep growing, and there is always room for more luxury,” Hau said.
By Bae Ji-sook, Korea Herald correspondent (baejisook@heraldcorp.com)