For China's retail sector, more isn't merrier

For China's retail sector, more isn't merrier
PHOTO: AFP

All is not well in China's retail sector. Shopping centres are being shuttered with regularity, as tenants abandon them. Yet the overall amount of commercial space in the country continues to swell.

The economy's weakening momentum and President Xi Jinping's belt-tightening are discouraging consumption. At the same time, shoppers are moving online, and foreign retailers are reviewing their strategies for expansion in the Chinese market.

The result of these developments: ghost malls.

This shopping centre in Chengdu, Sichuan Province, did not make it to its first anniversary.

The Sichuan Province city of Chengdu is home to 14 million residents. In May, a five-story shopping centre in the busy Chunxi Road district was abruptly closed. It had just opened in September. The operator blamed competition with online retailers, whose lower overheads allow them to offer unbeatable bargains.

"Rent in the building was expensive, and so were the goods sold there," said a sales clerk at a nearby shop.

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