Confusion In The Development Of Shopping Malls And Brands

Song Yun, general manager of MANGO Greater China

Ms. Song Yun, general manager of MANGO Greater China

"We have worked with a group to establish a relationship with its 20-30 stores. We have completed the channel construction rapidly, and we can quickly complete the new market by relying on bundling.

So we are very willing to be bundled. "

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Is the phenomenon of "bundled development" reasonable or necessary?

Bundled development is a collaboration between the mall and the brand, and the brand will expand with the development route of the shopping mall.

Because it can guarantee the rate of investment and simplify the steps of investment promotion, many shopping malls cooperate with brand dealers to form a bundled development mode with advance and retreat.

As for brand dealers, with the expansion of shopping malls, there are many unpredictable risks in new markets.

The existence of "bundled development" is reasonable. As a mode of existence, there is a certain necessity between the first party and the second party at the beginning. However, with the development of the consumer market, behind the prosperity of the brand entry rate of the mall, there is a hidden danger.

Chen Jin: before discussing the reasonableness of the phenomenon of "bundled development", first of all, I want to clarify the concept of my identity.

I came to the scene as a commercial real estate developer rather than a shopping mall.

Then I will discuss how the "bundled development" mode has appeared in the world. It is precisely because of the rapid development of China's consumer market that in order to reduce the running in between the market and the brand, more time and energy will be applied to the rapid expansion of the consumer market.

The mode of bundling development is beneficial to enhance the development mode of brand merchants and shopping malls in the premise of guaranteeing the investment rate of shopping malls and simplifying the steps of investment promotion.

It has played a positive role in the development of the retail market.

But everything has two sides. Bundling also has restrictions on brands and shopping malls. For example, some people think that the development strategy of "bundling" brand is actually pferring risk to brand players.

Chain retailers often arrange different sizes and location stores in core business circles, new and old communities, etc. it is difficult for a brand to match all stores.

But from another long term perspective, mismatched brands are also not good for shopping malls.

Take Shenzhen the Mixc as an example, in 2000 -2004, from planning and construction to operation, Huarun Group invested 1 billion to build it meticulously.

It went well after listing in 2005.

In 2009, the turnover was 4 billion. In the industry, it was rated as "150 thousand square meters of the Mixc has a good format portfolio and promotion plan."

This is going back to my initial interpretation of my identity. For commercial developers, rent and cash flow are not the most sensitive issues.

From another point of view, if we adopt the bundled development mode, it must be because the long-term development plan will not bind the unsuitable brand, which will cause the brand burden and destroy the combination of shopping malls.

Ruan Weiquan: any new phenomenon can be returned to the most basic economic principles.

Bundled development is a unique product in China.

This is related to the rapid rise of China's consumer market.

Based on my 30 years of retail experience, I understand this contradiction as a "supply and demand problem".

When the supply in the market is less than the demand, there will be an unreasonable development pattern similar to bundling development.

What we mentioned here is not the scarcity of shopping malls, but the fact that brands are competing to select the department stores in the core cities of the first tier cities, resulting in a shortage of demand. As shopping malls and bargaining power, some of the lower shopping malls and brands are bundled up.

Song Yun: binding development is a positive plan for international brands.

Take the international brand of China for nearly a year or two as an example.

We are familiar with China's two or three tier city shopping malls and business environment department. In terms of brand development, we do not know how many manpower teams we need to complete a city's planning. Rapid and effective occupation of the market, saving time and manpower cost is very important for our MANGO international brand.

For example, when we worked with a group, we established a cooperative relationship with our 20-30 stores. We quickly completed the channel construction, coupled with the popularity of it. We could quickly complete the new market by relying on bundling.

Similarly, there are many successful cases of bundling development, so for us, we are very happy to accept bundled development.

How to solve the key contradiction between "shopping mall" and "brand" derived from "bundled development"?

Ruan Weiquan: This is the reason why the weak in the "law of the forest" eat strong food.

To solve the contradiction is to solve the contradiction between supply and demand.

The development of China's retail industry is too fast. There are too many shopping centers with fewer brand choices. Take Xidan, Beijing, the core area of the first tier cities as an example.

The earliest one was Beijing Zhongyou department store, which had an absolutely strong right to speak.

Later, with the joining of Jun Tai Department store and Xidan Joy City, three situations of the world were formed.

Brand owners have more choices, and contradictions will naturally ease.

The more healthy development mode is the balance between supply and demand, and brands have more choices.

But this kind of mitigation is only relative.

The real key point is that the brand should first assess its bargaining power.

If you choose a shopping mall that fits your location, you will have the right to speak in the dialogue with the mall, otherwise you will be faced with an unequal treaty.

Lao Gang: for brands and shopping malls, it is a game, but basically it is interlinked.

In the retail industry, "access is king" is the development trend in the next 10 years.

Just as before, knowing the bargaining power can really solve the contradiction between the market and the brand.

Once I had a friend who said there was a brand to enter the mealong town square.

I told him bluntly that the answer could only be NO.

Because you and your brand will face harsh terms than the Nanjing treaty.

The reason is that although the new brands in the development stage think that they have made many concessions to enter the excellent shopping malls, but as a market operator, maximizing profits is also our goal.

If such a first-class shopping malls, I have 500 thousand of the brand sales, 150 thousand yuan rent, such a quality brand, and even have the same quality of the same brand three or four waiting to enter the market, then the shopping mall, what is the need to accept the risk of a new brand?

Therefore, any brand and shopping malls must match each other in order to bind development.

Clothing brands enter the shopping mall to think clearly of today's positioning and tomorrow's position and find the most suitable entry point.

For the brand of the Mixc, there is only one city, so we must choose the best brands to make the most perfect combination of formats. This is also the insistence of the mall in pursuit of long-term development.

Shopping malls also need to find the most suitable pointcuts. Hengda and Hong Kong Hui's two shopping malls are the excellent cases in this regard.

How do stores and brands win together?

Ruan Weiquan: this problem is a big problem.

In fact, it is the development direction of China's retail industry.

In my opinion, the "bundled development" problem in the retail market is just an immature representation of the retail market.

But this is just the stage of excess.

In the cases cited above, some powerful stores with voice right now can ask for brand withdrawal, but it is not a long-term development mode.

When supply and demand are more balanced, it may not be 10 years. Two years later, we can see different market competition.

In fact, we can see some new trends now.

1. in order to develop the retail industry, department stores and department stores are becoming less and less. The large shopping mall will be more and more, and the mall will start to own its own brand and chain operation.

2. regionalized shopping mall will appear.

For example, in the non traditional core areas such as Shanghai Zhongshan Park business district, passenger flow growth has been growing steadily.

Wujiaochang and other business circles also began to rise.

There are more than one CBD in the first tier cities, providing more choices for brands.

3. the specialized shopping mall has established a wider channel for the brand.

For example, in sports industry, there are sports city retail modes in two or three cities, such as Chengdu and Shenyang.

It provides a more targeted sports brand channel for sports brand besides department stores.

Chen Jin: more and more shopping malls have become the fundamental solution to this contradiction.

From the current brand business partners shopping malls to department stores, and gradually to the real estate business based shopping malls, will divert most of the brand business.

These real estate businesses have stronger advantages in anti risk capability because of their increased asset capability.

So it will not squeeze sales, and cash flow is no longer a sensitive issue.

The contradiction between shopping malls and brands will be fundamentally alleviated, and similar shopping mall will continue to expand.

Song Yun: for our brand, it is the question of whether we should finish bundling or refuse to bind.

With my brand experience, I hope to provide some reference for the bargaining process between brands and shopping malls.

From 2008 onwards, we changed from franchise based business mode to direct operation. We are in the stage of expansion, and we are bundled with the group to enter new cities. The first and second tier cities are guaranteed, but there are risks in the three or four tier cities.

Under the premise of brand quality decoration and service, the stores in the three or four tier cities are part of our struggle.

So we have made some adjustments in the management concept, for example, the three or four line cities abandon the direct mode, and only join the mode of auxiliary operation.

This is a temporary compromise with China.