Shanghai's retail industry sees signs of a customer-centric resurgence

Ding Yining
The Pacific Department Store is closing its doors toward the end of August, but there are hints of a resurgence in the retail industry's customer-centric trend.
Ding Yining

Shanghai's retail landscape is entering a new era marked by a proliferation of vibrant shopping formats, futuristic elements and intriguing new locations.

Since its renovation more than a decade ago, the Pacific Department Store in Shanghai's Xuhui District will close its doors at the end of August due to the expiration of its leasing contract, according to company statements.

Despite the closure of one of Shanghai's most popular and aesthetically pleasing department stores in Xujiahui, which is a core area for shopping in Shanghai, there are signs of a reviving customer-centric trend in the retail industry.

According to district officials, renovations for the Pacific Department Store and Shanghai Sixth Department Store are included among central Xujiahui's major initiatives.

Shot by Dong Jun. Edited by Dong Jun. Subtitles by Ding Yining.

There are over a dozen retail establishments, restaurants, and cultural destinations in the vicinity of three subway lines in Xujiahui.

A blogger nicknamed Miu stated on the microblogging site Weibo that "It used to be one of the most prestigious shopping destinations with numerous new brands and enticing promotions."

Many anticipate a resurgence of vitality as a result of the introduction of new forms of retail space that could expand their boundaries and become more accommodating to diverse consumers.

Jasmine Fu, who has worked in the Xujiahui area for more than a decade, said that she and her coworkers always discover new lunch spots in the area other than the Pacific Department.

"It appears outdated and does not offer many new options, given the abundance of new shopping centers in the area."

"I hope that once the renovation is complete, we will have more dining options and outdoor space for leisure activities during lunch breaks," she said.

Shanghai's retail industry sees signs of a customer-centric resurgence
Dong Jun / SHINE

The interior of the Pacific Department Store in Xuhui District

Customers can't wait to embrace the newest trends as local retailers introduce new service-oriented retail formats.

Fairy Chen, a researcher at a university in Shanghai, is spending her summer vacation investigating the city's newest shopping destinations.

She recently took her three-year-old daughter to The Art of Fairytales, an exhibition at the Shanghai Jiuguang Center that features paintings, manuscripts, correspondence, papercuts, and digital elements by Hans Christian Andersen.

"There are simply so many events, exhibitions, and activities to choose from," she said.

In addition to museums and art spaces, shopping complexes, many of which turn out to be tall, bright, avant garde and pleasantly surprising, have emerged as the newest destination for outdoor leisure activities among city dwellers., a local industry alliance that focuses on retail mall development, said in a recent study that an open space or courtyard could introduce small and microbusinesses, expand the offerings for customers, and provide more leisure options for visitors.

Shanghai's retail industry sees signs of a customer-centric resurgence
Dong Jun / SHINE

A mini-exhibition on Huaihai Road brings together young artists and makes full use of the street-side space.

The "Streets and Beyond" mini-exhibition brought together young artists and utilized the storefront and windows of the Shanghai Lady Fashion Department Store on Huaihai Road to the fullest extent.

To revitalize offline traffic, department stores have recently adopted the trend of co-creating commercial space with young entrepreneurs and integrating artistic elements.

According to a survey conducted by the China Commerce Association For General Merchandise and Fung Business Intelligence, 86 percent of domestic department stores anticipate revenue growth this year, an increase from 41.2 percent a year earlier.

Shanghai's retail industry sees signs of a customer-centric resurgence
Dong Jun / SHINE

The atrium at the Shanghai Jiuguang Center gives the commercial mall greater space for outdoor activities and makes it a community hub.

This year is expected to be a turning point for the retail industry, as more companies concentrate on enhancing the value of their products and services in order to meet consumers' growing lifestyle demands.

Despite the general decline of department stores and hypermarkets, there has been a growing trend for many to implement new physical store formats and combine leisure activities with pure shopping, according to industry observers.

When it comes to reviving shop designs, both domestic and international retailers have their sights set on new models.

Bailian ZX, unveiled at the beginning of 2023, is the first commercial complex in China to promote the culture of anime, comics, and gaming.

In addition to comic book and cartoon stores, the seven-story mall features a themed café.

During the summer break, dozens of events, such as game music concerts and figurine bazaars, are held.

Shanghai's retail industry sees signs of a customer-centric resurgence
Dong Jun / SHINE

Toys, dolls, and cartoon derivatives draw young people to retail centers.

After renovating the fourth floor of New World City into a cartoon-themed mini bazaar, the CAPCOM game derivatives store and the "Detective Conan Cafe" opened.

In July, store foot traffic increased by 22 percent compared with July 2021, and aggregate sales increased by 7.5 percent.

Shopping destinations have evolved into social gatherings where like-minded consumers can share their ideas and collections.

Nash Feng, vice president of Ries Positioning Strategy & Consulting China, stated that offering specialized retail themes, such as those dedicated to niche segments, still has enormous development potential over time.

Shanghai's retail industry sees signs of a customer-centric resurgence
Dong Jun / SHINE

The TX Huaihai retail mall holds art exhibitions to attract young customers for immersive experiences. The space is well designed with a touch of modernity.

But to mind, many of these emerging segments among youth are still in their infancy and it is not easy to sustain their attraction.

Feng said that for a location to become a must-visit destination, it must be so distinct and unmatched that it lures not only local shoppers but also tourists from neighboring cities and counties.

The intention of IKEA's parent company, Ingka Holding, is to expand beyond home furnishings and decorative objects. The new Shanghai LIVAT center is scheduled to open in 2024. It will be a mixed-use retail and entertainment center with approximately 300 stores.

It aspires to be a leader among "meeting places" and will house fashion and style, leisure and restaurants, education and sports, and additional entertainment venues.

In addition, IKEA recently upgraded the Beicai Store in the Pudong New Area with 6,700 square meters of new community-style exhibit space in order to continue adapting to local demand.

Special Reports