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Haoran Wu

China’s shopping malls driven by child-related businesses

At the end of October 2015, China abolished its one-child policy, meaning couples are now allowed to have two children. As a result, 23 million extra births are likely in China by 2050 (Source: Population Reference Bureau). Haoran Wu (Research Analyst) explains how this provides much greater scope for marketing aimed at children and parents in shopping malls.

Since 2013, the tremendous popularity of family-themed reality TV shows like ‘Dad, Where Are We Going’ have kick-started much discussion by the general public about early childhood education in China. The heart-warming scenes have promoted a ‘return to family ethics’, igniting people’s desire to spend more quality time with their loved ones.

A ‘Parenting Revolution’ has also emerged in Chinese society. In contrast to the traditional authoritarian style, whereby mothers and fathers controlled their children’s behaviour and emphasised academic excellence, modern young parents recognise the importance of nurturing children’s independence and creativity, and increasingly encourage their children to play and participate in sports activities.

In view of the huge opportunities ahead, nearly all mainland Chinese shopping malls are adding more child-related features by allocating more space to child-related businesses, expanding offerings of children’s brands, and renovating existing children’s sections. Child-related elements have evolved from being a peripheral business, to an essential, even the core, part of shopping malls. The business model has also shifted from ‘retail only’, to incorporate children-themed bookstores, restaurants, photography, maternal services, as well as the more ‘experiential’ formats, such as education and development centres, and professional experience parks.

Strategic considerations also explain the attractiveness of children’s related business to the supply side. Children can induce the consumption from the whole family, so extra revenue can be generated from accompanied parents. It also helps to generate repeat sales and enhance customer loyalty. When shopping centres provide children’s play spaces, they build themselves into the weekly schedules of parents with young children because children require more frequent ‘experiential consumption’ than adults. Having a regular visit to the mall may also change a parent’s perspective on shopping and reduce the appeal of online shopping.

Many eye-catching mega schemes have come to the market over the past two years. In Beijing, shopping malls have launched Asia’s largest Snoopy Garden (a dog cartoon character) and Pororo Theme Park (a penguin cartoon character) in H2 2013 and H1 2014 respectively; in Shenzhen, the country’s first kids-themed mall ‘Baby City’ was opened in Q2 2014, with a total area of 16,000 sq m (c.170,000 sq ft). In May 2015, Shanghai has become the home of the world’s largest Disney store. The store was forced to close just an hour after grand opening, as the queue reached more than a mile – the equivalent length of London’s entire Oxford Street.

Expenditure on children (aged 0-14)

Fig.1

Source: China Rong, 2015

Total area of children's related businesses (million sq m)*

*In 42 major cities in China
Source: RET Commercial Real Estate, 2015

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Haoran Wu

Haoran Wu

Research Analyst

Haoran's biography