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China's malls target children

News, 26 January 2016

HONG KONG: China's mall owners, casting around for ways to generate footfall, have settled on children as their latest route to success.

Developers have been expanding mall space – last year one report suggested that 40 million square metres of mall space would be created over the next three years – at the same time as online shopping has made inroads into bricks-and-mortar retail.

That challenge has seen mall owners diversifying into leisure and entertainment. "It kind of manifests itself in two streams," explained Warner Brown, head of research at property agents JLL.

"One, you see existing properties which are struggling to adapt to e-commerce who are trying to retrofit themselves or patch holes in their vacancies," he told the South China Morning Post.

"Then you have new properties that are planning themselves from the ground up... I can think of an actual mall in Hunan province which is going to have theme-park style attractions."

More modest options include ball pits and inflatable slides, but whatever the scale, the aim is to take advantage of a tendency for parents and grandparents to indulge single children – the so-called "little emperor" effect stemming from China's recently relaxed one-child policy.

According to Carlby Xie, head of China research at commercial real estate business Colliers, this trend – towards children-oriented malls – began around a year ago and will continue for several years to come.

But if everyone is doing it then the point of difference disappears. And, pointed out Steven McCord, JLL North China head of research, there may not be enough children to justify the strategy. "I start to wonder if there's such a thing as too much children's retail," he mused.

Malls hoping for a surge in births following the relaxation of the single-child policy in 2013 may be disappointed. Late last year the Economist reported that just 12% of those eligible to have a second child had applied: "demand for just one child becomes ingrained," it noted.

Increased living costs and an uncertain economic future are also factors that will inhibit any rush to increase family sizes.

Data sourced from South China Morning Post; additional content by Warc staff