The internationalization of the retail sector continues and China remains a key target for cross-border retailers.
Many Chinese cities saw an increase in new market entrants in 2013 with Beijing sixth in the global ranking of new entrants, Shanghai landed in ninth place, while Hangzhou had the largest increase due to new shopping centers, according to CBRE’s How Global is the Business of Retail report. Tier 2 Chinese cities provide some of the biggest opportunities.
Beijing attracted 34 new entrants, up from 14 in 2012, many of them were luxury retailers. Paul Smith and Stella McCartney opened their first store in Beijing. Shanghai had 31 new entrants, including Vera Wang, Maje, and 10 Corso Como.
Hangzhou, which attracted 17 new brands, rose to 40th in CBRE’s City Ranking from 54th. Many of the new entrants were fashion retailers such as Desigual, Tommy Hilfiger, Stradivarius, Massimo Dutti and OYSHO.
Prime retail space is limited in Tier 2 cities and as new shopping centers are completed, there will likely be a spike in new entrants due to pent up demand.
According to CBRE, Michael Kors and Zara Home entered more new cities than any other retailer last year. Hennes & Mauritz (H&M), Desigual, Superdry, Victoria’s Secret, & Other Stories and Hollister were among the top 10. Luxury fashion sector was the most active, accounting for 24 percent of new openings while the mid-range fashion sector followed at 20 percent.
image credit: michaelkors.cn, CBRE