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Tue, Nov 30, 2004 - Page 12 News List

Customers scarce at world's largest shopping mall

THE GUARDIAN , BEIJING

In a world that boasts many temples of consumerism, this may be the biggest of them all.

With more than 1,000 shops, 230 escalators and a colossal restaurant area, the Golden Resources megamall in west Beijing claims to have more space than any other on the planet.

Once the shopping is done, there are any number of other distractions for China's upwardly mobile middle class.

There will soon be an artificial ski slope, a cinema complex and a spa in the mall, which spreads over 56 hectares -- more than four times the size of the UK's largest shopping center.

The private investors behind the ?2.2 billion (US$4.2 billion) facility aim to capitalize on government plans to transform China into a "well-off" society by 2020 through rapid economic growth, urbanization and an increased focus on consumer spending.

The manager of the New Yansha group, which operates the center, said the gamble on China's urge to splurge would pay off.

"Because the Chinese population is so huge, they need an enormous place like this to shop," Fu Yuehong said.

"Trade hasn't yet met my expectations but I'm confident about the future. Chinese consumers are becoming more and more internationalized. Increasing numbers travel overseas and learn to enjoy shopping in Western-style malls like this," Fu said.

According to government statistics and consumer surveys, her optimism is well placed. After more than 20 years of growth running at more than 9 percent, China has lifted hundreds of millions out of poverty and pushed a small minority into affluence. Last year, the average annual income of urban dwellers passed the US$1,000 mark.

The rise in disposable income is pushing up retail sales by 13 percent a year. According to a recent survey by the China Marketing and Media Study Group, almost half of the population has a mobile phone, twice the figure of three years ago. The proportion owning computers has risen in the same period from a third to almost half.

In the expectation of an even bigger boom in the years ahead, foreign retailers and credit companies are moving to establish their brands. Prada has opened 10 shops in China and plans to open 20 more by the end of next year. Visa aims to increase the number of its Chinese credit cardholders from 3 million to 51 million by 2008.

But the impressive-sounding statistics and optimistic forecasts contrast with the cavernously empty halls of Golden Resources, which suggest Beijing residents are far from ready to buy into the globalized consumer culture that the shopping center represents.

The center's operator claims that 40,000 people visit on weekdays and more than 80,000 at weekends, but individual shopkeepers complain that they are not seeing anything like that volume.

At the Clarks shoe shop on Friday morning, four assistants stood idle. The day before, they did not get a single customer. Even at the weekend, their best sales figure is a mere ?600.

A large part of the reason is price. In China, the British chain is marketing itself as a quality brand aimed at high earners. Its cheapest pair of shoes costs more than ?64, five to 10 times the price most Beijingers usually pay.

The manager, Zeng Sha, thinks the problem is publicity.

"Business has not been ideal," she admitted. "That is because the flow of customers is too small. Not many people know about this place. They are not used to malls yet."

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