For China, new malls jaw-dropping in size
By David Barboza The New York Times
WEDNESDAY, MAY 25, 2005
DONGGUAN, China After construction workers finish plastering a replica of the Arc de Triomphe and buffing the imitation streets of Hollywood, Paris and Amsterdam, a giant new shopping theme park here will proclaim itself the world's largest shopping mall.
The South China Mall - a jumble of Disney and Vegas, a shoppers' paradise and hell wrapped in one - will be nearly three times the size of Minnesota's huge Mall of America. It is part of yet another astonishing new consequence of the quarter-century-long economic boom here: the Great Malls of China.
Not that many years ago, shopping in China mostly consisted of lining up to entreat surly clerks to accept cash in exchange for ugly merchandise that did not fit. But now China has utterly embraced America's modern "shop-'til-you-drop" ethos and is in the midst of a buy-at-the-mall frenzy.
Already, four shopping malls in China are larger than the Mall of America. Two are even bigger than the West Edmonton Mall in Canada, which just surrendered its title as the world's largest shopping mall to a mammoth complex in Beijing. And by 2010, China is expected to be home to at least 7 of the world's 10 largest shopping malls.
Chinese are swarming into the malls, which usually consist of many levels arranged more vertically than the sprawling two- or three-level centers surrounded by parking lots that are typical in North America or Europe. Customers arrive by bus and train; a growing number are taking cars. On good days, one mall in the southern city of Guangzhou attracts about 600,000 shoppers.
It is not so surprising that developers here are spending billions of dollars to create these super-sized shopping centers in the country's fastest-growing cities. They are betting that this nation of savers is on the cusp of also becoming a nation of tireless shoppers.
China's growing consumerism means that finally - after years of peering into China and fruitlessly dreaming of selling a billion Cokes, Revlon lipsticks, Kodak cameras and the like - American businesses may be a step or two closer to achieving that vision.
The malls certainly create more opportunities for peasants and poorer workers to come face-to-face for the first time with the products of the "American dream," though it is also true that these days those Cokes, cosmetics and cameras are all made in China.
In any case, the shopping mall building spree is so aggressive that some economists and government officials have started to worry that it may be another sign that China's economy is overheating - or that the country's building frenzy is lurching toward a fall.
But so far there is no end in sight - and no evidence that China's long boom is likely to suffer anything more than a modest slowdown.
"These shopping centers are just huge," said Radha Chadha, who runs Chadha Strategy Consulting, a firm that tracks shopping malls and the sales of luxury goods in Asia. "China likes to do things big. They like to make an impact." Retail sales in China have jumped nearly 50 percent in the past four years, as measured by the nation's biggest retailers, government figures say. And with rising incomes, Chinese are plunking down their money for shoes, bags, clothes and even theme park-style rides.
"We like this place a lot," says Ruth Tong, 27, one of the early visitors to South China Mall here in Dongguan with her husband and 5-year-old son. "They have a lot of fun things to do. They have shopping and even rides. So we like it and yes, we'll come back again." The central government recently ordered state-controlled banks to tighten lending to huge shopping mall projects. But that has not yet tempered the plans of aggressive developers and local government officials for transforming vast tracts of land into enormous shopping centers.
After all, the demand is certainly growing. Income per person in China has hit the equivalent of about $1,100 a year, up 50 percent since 2000. And as the country rapidly urbanizes and modernizes, open-air food markets and old department stores are being replaced by giant supermarkets and big-box retailers.
Ikea and Carrefour, the French supermarket chain, are mobbed with customers. And China's increasingly affluent young people are purchasing cars and hanging out at the mall.
"Forget the idea that consumers in China don't have enough money to spend," said David Hand, a real estate and retailing expert at Jones Lang LaSalle in Beijing. "There are people with a lot of money here. And that's driving the development of these shopping malls."
Big enclosed shopping malls, which came of age in America in the 1970s and in Europe in the late 1980s, are now sprouting all over China. According to retail analysts, more than 400 large malls have been built in China in just the past six years.
And at a time when the biggest malls under construction in the United States measure about 93,000 square meters, or 1 million square feet, developers here are pushing the limits by creating malls that are 560,000 and 650,000 square meters.
For the moment, the world's biggest mall is the 560,000-square-meter Golden Resources Mall, which opened last October in northwest Beijing. The mall, where 20,000 employees work, is a single, colossal five-story building that is so large it is hard to navigate among the 1,000 stores and the thousands of shoppers.
How big is 560,000 square meters? The Golden Resources Mall spans the length of six football fields and is more than one and a half times bigger than the Pentagon, which at 344,000 square meters is the world's largest office building. The giant package, where the mall is the centerpiece of an entire sprawl of apartments, office buildings, hotels and schools, is expected to carry a full price tag, when completed, of $1.3 billion.
The mall is the creation of Huang Ru Lun, a little-known Chinese entrepreneur who made a fortune selling real estate in coastal Fujian Province. Six years ago, Huang acquired a 180-hectare, or 440-acre, tract of land outside Beijing to create a virtual satellite city, which soon will have 110 new apartment buildings planted like potted trees around his neon-lit Golden Resources Mall.
Perhaps the most aggressive mall building is taking place in southern Guangdong Province, the seat of China's flourishing Pearl River Delta region.
Last January, over 400,000 people showed up in Guangzhou, the provincial capital, for the opening of the Grandview Mall, which also calls itself the world's largest mall, with 279,000 square meters. It even claims to have the tallest indoor fountain.
Exactly who has the world's largest shopping mall appears to be in dispute. Some malls here claim the largest floor size; others count leased space. Still others say what counts is that there is only one roof.
Indeed, the Triple Five Group, which owns the Mall of America (232,000 square meters of leased shopping space) and the West Edmonton Mall in Canada (297,000 square meters), has not conceded defeat.
The group has three mega malls in the planning stages that will expand its operations from its base in North America into China.
Two of them - the Mall of China and the Triple Five Wenzhou Mall - are projected to be 930,000 square meters.
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