A Day at the ‘Mall’: Ping-Pong and Purchases in Beijing

Imagine a typical Saturday afternoon: the sun shining, families laughing, and the distinct ‘thwack’ of ping-pong balls echoing through the air. Now picture this scene unfolding not in a park, but inside a bustling shopping center. This is the reality at Hanguang Department store in Beijing’s Xidan commercial district, where ping-pong tables and open-air courtyards have replaced stuffy interiors, drawing crowds seeking more than just retail therapy.

This change reflects a broader trend across China, where customary shopping malls are adapting to meet the evolving needs of consumers. These spaces now offer a blend of retail, recreation, and community engagement, providing urban dwellers with a fresh take on leisure and consumerism.

Retail Sales Shift: Experience Over Transaction

In 2024, China’s total retail sales of consumer goods approached 48.79 trillion yuan (approximately $6.79 trillion USD), marking a 3.5 percent increase from the previous year. Though, this growth masks a significant shift. While overall retail spending increased, department stores experienced a decline in sales, prompting many to rethink their business models.

This decline is largely attributed to the rise of e-commerce and changing consumer habits.Today’s shoppers,especially in the U.S. and China, seek more than just products; they crave experiences. This includes social interaction,entertainment,and personalized services. In essence, shopping has evolved from a purely transactional activity to a holistic experience.

“Shopping malls used to be places to sell goods, but now they focus more on services,”

Yi Shaohua, research fellow at the National Academy of Economic Strategy, Chinese Academy of Social Sciences

This sentiment echoes across the retail landscape.The COVID-19 pandemic further accelerated this trend, reinforcing the need for brick-and-mortar stores to offer something unique that online retailers cannot replicate.

Hanguang’s Facelift: A Case Study in Reinvention

hanguang Department Store’s transformation serves as a prime example of how retailers are adapting to the new landscape. Last year, the store underwent a significant revamp, prioritizing leisure and public spaces over retail areas.Two patios were converted into an open-air courtyard, complete with ping-pong tables freely available to the public.

This strategic shift has yielded positive results. According to general manager Pu Jiajia, while business areas were reduced in size, the increased public spaces have enhanced the overall shopping experience, leading to a 5 percent increase in sales. “After the transformation, our sales have increased by about 5 percent.” This demonstrates that investing in customer experience can directly translate to improved financial performance.

Government Initiatives: Boosting Consumption Through innovation

The Chinese government is actively supporting the transformation of the retail sector. In March, a special action plan was issued to boost consumption, calling for the development of “smart business areas and immersive experience spaces” and promoting the transition of brick-and-mortar stores into “new commercial places.” This policy underscores the importance of creating innovative retail environments that cater to the evolving needs of consumers.

Similar initiatives are being explored in the U.S., with local governments and business organizations collaborating to revitalize downtown areas and encourage experiential retail. These efforts often involve zoning changes, tax incentives, and grants for businesses that incorporate entertainment and community engagement into their offerings.

Chang’an Shopping Mall: A Family Destination

Chang’an Shopping Mall, located just 3 kilometers from Xidan, provides another compelling example of prosperous transformation. For Beijing resident Ms.Fang and her daughter, the upgraded mall has become a regular weekend destination. “My daughter attends Chinese calligraphy and roller skating classes, while I like to kill time by exploring the bookstores, bazaars and cafés,” Fang said.This highlights the appeal of malls that offer a diverse range of activities and services beyond traditional retail.

Since initiating its transformation project in 2019, Chang’an Shopping Mall has introduced experience-oriented services, including education and wellness programs, bazaars, and even pet cafés. This expansion of dining and lifestyle services has resulted in a significant increase in foot traffic, with nearly 18,000 visitors per day in 2024, a 70 percent increase compared to 2018. according to Shi Shufeng,assistant general manager,this diversification is key to attracting and retaining customers.

ACG and the Next Generation of Shoppers

Retailers are also focusing on attracting younger consumers, particularly Generation Z and younger demographics. Some have ventured into the world of animation, comics, and games (ACG), creating dedicated spaces for anime expos and merchandise.

In Hefei, Anhui Province, a rebuilt shopping center features a dedicated area for anime expos on its first floor. Cosplayers roam the halls, while ACG merchandise flies off the shelves. Miss Liu, a college student and cosplay enthusiast, finds the mall a welcome escape from her studies. She enjoys connecting with like-minded individuals and exploring the diverse offerings. “I would say going shopping today feels more like an adventure rather than tedium,” the young shopper said. This emphasis on community and shared interests resonates strongly with younger consumers.

Expert Perspectives: Focusing on Consumer Needs

Wang Ning, an executive president of the Business School at Zhengzhou University, emphasizes the importance of focusing on consumer needs, diversifying goods options, and improving services. This holistic approach is crucial for traditional shopping malls to remain relevant in the evolving retail landscape.

The future of Retail: Experiential and Personalized

The transformation of Chinese department stores offers valuable lessons for retailers worldwide. By embracing experiential retail, creating community spaces, and catering to the evolving needs of consumers, brick-and-mortar stores can not only survive but thrive in the age of e-commerce. The key is to offer unique experiences that cannot be replicated online, fostering a sense of community and providing personalized services that resonate with individual shoppers. This shift towards experiential and personalized retail represents the future of the industry.