Electronics malls crumbling under online shopping boom in China

Want China Times, Tai Jui-fen and Staff Reporter 2014-02-02

The once famous Zhongguancun electronics mall. (Photo/CFP)

Operators of giant shopping malls housing electronics shops in China are swiftly losing customers and vendors as tenants disappear in the shadow of stiff competition from the booming e-commerce sector, reports the Chinese-language China Business Journal.

"Traditional malls selling tech products are barely weathering the impact of e-commerce, declining at an annual rate of 20% with no end in sight," according to one survey.

Half of the shops located in two leading malls in Beijing's Zhongguancun have shut down, even though the area's name had been well-known even down the stretches of the Yangtze in the past, said Qi Bo, secretary-general of the Chamber of Beijing Zhongguancun Electronic Trade.

Tenants were no longer willing to rent spaces in a mall, despite heavy discounts of up to 50% on rent being offered.

The demise of the brick-and-mortar malls has been linked to the rise of e-commerce, and Zhongguancun has seen the impact as retail consumers flock towards wholesale vendors, the shop owner stated.

An expert pointed out that traditional malls in areas such as Zhongguancun or Shenzhen's Huaqiangbei should transform themselves by introducing high-end industries, including the China Technology Exchange or trade of patents.

He also suggested that malls evolve into a flagship venue for electronics goods from their current role as a shop market, and develop services for the tech sector to improve their competitiveness.