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Shanghai: Profile of a Consumer Market

1.  Economic Overview and Development Planning

Shanghai’s GDP reached Rmb2,356.1 billion in 2014, corresponding to a year-on-year growth of 7.0% and a 3.7% share of the GDP for the whole country. In terms of other key economic indicators, such as fixed asset investment, import and export value, actual utilised foreign investment and total retail sales of consumer goods, Shanghai always comes up on top among all core cities in China’s three major economic regions (namely Yangtze River Delta (YRD) region, Pearl River Delta region and Bohai rim region). Moreover, it commands strong radial effects that could drive the economic growth of neighbouring cities. According to the 2015 Blue Book on Urban Competitiveness released by the Chinese Academy of Social Sciences, Shanghai ranks third among all Chinese cities, after Shenzhen and Hong Kong. The per capita GDP of Shanghai in 2014 was Rmb97,300.

Chart: Shanghai”s GDP in recent years
Chart: Shanghai”s GDP in recent years

Shanghai is the economic hub of YRD. In order to quicken the pace of establishing Shanghai as both an international financial centre and international shipping centre, measures are being taken in accordance with China’s 12th Five-year Plan and the State Council’s Opinions on Accelerating the Development of Modern Service and Advanced Manufacturing Industries and the Establishment of International Financial and Shipping Centres in Shanghai. Efforts are being redoubled in developing the modern service and advanced manufacturing industries in Shanghai, such as finance and shipping, so that it will lead the country in changing its economic growth model.

In respect of Shanghai’s role as an international financial centre, the total transaction volume of its financial markets (not including foreign exchange) is expected to increase from Rmb589 trillion in 2013 to Rmb900-1,000 trillion in 2015. At present, Shanghai maintains its world number 1 position in spot trading volume of gold. Its initial insurance premium payments is close to Rmb100 billion. Its bills market and credit transfer market are also actively developing. To better establish itself as an international shipping centre, Shanghai keeps consolidating the related resources to upgrade its shipping services and to advance the setting up of a comprehensive experimental zone in international shipping. Furthermore, it is making improvements in ship registration and the approval process for international shipping, while raising customs clearance efficiency and speeding up the process in order to streamline policies governing the setting up of offshore accounts by enterprises.

Shanghai is developing a headquarters economy more actively than before, attracting domestic and foreign enterprises to set up headquarters in the city. As at the end of 2013, 490 multinational corporations, 297 investment companies and 381 foreign-funded research and development centres have established headquarters in Shanghai. In addition to the seven existing “central business districts” (CBDs)—the People’s Square, Nanjing West Road, Huaihai Road, Lujiazui, Xujiahui, Wujiaochang and Hongqiao — the Putuo area has also been developed into a CBD as one of the initial pilot areas to launch related activities supporting the establishment of intelligent commercial districts.

2.  Shanghai’s Consumer Market

2.1  Growth in Retail Sales

Shanghai’s consumer market has been growing rapidly. In 2014, retail sales of consumer goods in Shanghai increased 8.3% year-on-year to top Rmb871.9 billion, registering an annual growth rate of 11% on average from 2009 to 2014, while showing a sustained growth in the spending power of its consumers and in its consumer market.

Chart: Retail sales of consumer goods
Chart: Retail sales of consumer goods

Connected with its urban development and the increasing affluence of its population, Shanghai has seen a continued growth in the retail sales of major consumer items. In particular, products which symbolise modern home living and middle-class consumption patterns, such as computers, air-conditioners, mobile phones, cameras and hot-water shower devices, have posted robust growth in recent years. Such a trend is also reflected in the increased ownership of household consumer durables. In particular, the ownership rates of mobile phones and home computers have shown marked increases in recent years, indicating that some Shanghai families are already changing from the consumption of traditional products to a more modern consumption pattern.

Table: Average Ownership of Consumer Durables Per 100 Urban Households at Year-End
Table: Average Ownership of Consumer Durables Per 100 Urban Households at Year-End

2.2  Per Capita Disposable Income and Consumption Expenditure

In 2014, Shanghai urban households’ per capita disposable income stood at Rmb47,710, while per capita consumption expenditure was Rmb30,520. In 2013, for high-income households, per capita disposable income was Rmb87,767 while per capita consumption expenditure was Rmb50,218.

Chart: Per capita disposable income and consumption expenditure of urban households in Shanghai
Chart: Per capita disposable income and consumption expenditure of urban households in Shanghai

In recent years, with rises in income and a more ample supply of basic materials, the proportion of expenditure on food for Shanghai households has been decreasing, while spending on services such as education, cultural activities and entertainment, as well as household facilities has been increasing. Taking the 2013 per capita consumption expenditure of Rmb28,155 as an average, food is still the major consumption item, though its share of consumers’ spending has dropped from 35.6% in 2006 to 34.9% in 2013, while the shares of expenditure on education, cultural and entertainment services as well as household facilities have risen to 16.8% and 10.1% respectively.

3.  Characteristics of Shanghai’s Consumer Market

3.1  Population Structure

Shanghai’s permanent population in 2014 was 24.26 million, up by 36% from 17.78 million in 2005. At 9.96 million, the out-of-province population constituted 41% of Shanghai’s permanent population.

Comparing the permanent population in all 17 districts of Shanghai with that in 2005, there has been a total reduction of 100,000 residents in Huangpu and Jing’an districts. As residents moving out from central urban districts and the incoming population are gradually finding their way to the suburbs, there are now five districts with a growth in total permanent population of more than 50%: Baoshan, Jiading, Songjiang, Qingpu and Fengxian. In terms of absolute number, the top five districts with the highest growth in population are Pudong New Area, Songjiang, Minhang, Baoshan and Jiading, all having an added population of more than 600,000. The major reasons for the decrease in population in the central urban districts and an increase in the suburban districts are the relentless acceleration in the construction of urban infrastructure and suburban new town areas as well as the further optimisation of the city’s layout and the deepening of industrial structure adjustments, all of which have played significant roles in steering the population movement. To a lesser degree, it is also due to the fact that the suburbs, where the city and rural areas meet, are attracting most of the incoming population.

According to the findings of China’s sixth population census in 2010 regarding Shanghai’s permanent population, 52% were male, 8.6% were aged 0-14, 81.3% were aged 15-64, and 8.6% were aged 65 or above.

Educational attainment of the permanent population has risen significantly: 22% have university education, 21% have senior high school education, 36% have junior high school education and 14% have primary school education. Compared with the findings of the 5th census in 2000, the proportion of Shanghai residents with university education has increased from 10,940 to 21,952 per 100,000 people.

There were 8.25 million households in Shanghai, with an average size of 2.49 persons. The average household size had decreased by 0.3 persons from 10 years earlier.

3.2  Characteristics of Consumers

Shanghai is a migrants’ city, so its consumers are not only made up of its residents, but also entrepreneurs, workers, tourists and business travellers from all over the country and from overseas. These consumer groups have great differences in income levels, occupation, concepts and habits.

Characteristics of consumption behaviour of different groups

Generally speaking, consumption needs are diversifying further. Competitive consumption and conformity consumption to ‘keep up’ have been decreasing, while rational consumption and autonomous consumption are on the rise. Consumers are no longer passively induced to consume by advertisements and publicity. Instead, they are trying their best to fully reflect their unique style and establish their unconventionality and individuality through their clothing, outward appearance, fashion accessories and home decoration.

Consumers of different ages have substantial differences in consumption attitudes. Shanghai is becoming an aging society. The consumption attitudes of the seniors are relatively traditional and conservative. They buy their staple and non-staple food mostly from peddlers’ markets or food markets; they are mindful of value for money in the things they wear and use; and they are more sensitive to price changes. With the rapid development of online shopping in recent years, more and more middle-aged and elderly people are receptive to shopping over the Internet. As of 2013, more than 250,000 Taobao users in Shanghai were elderly people aged 50 or above, ranking first among all cities in China.

The post-80s generation has become a main force in the consumer market. As a group, they are known for their independent character, seeking ‘cool ‘ and their need to show off their individuality. As vanguards in many consumption areas, the post-80s are more quality conscious and they are after fashion and identity. Price is not a main consideration; they have strong consumption impulses and their consumption concept is gradually changing from one of survival to one of enjoyment and development. For this generation, the gap between eastern and western cultures is narrowing. They usually engage in deficit spending and go after a self-focused consumption taste and consumption culture.

Buying brand-name clothing, cosmetics and luggage is most common in the medium to high-income group of white-collar office workers, corporate executives and private entrepreneurs. While brand-name consumer electronics, brand-name jewellery and watches, as well as cars have already become mainstream consumer items to this group, tours and vacations are very common among them, with Hong Kong, Japan and Korea being favourite sightseeing and shopping destinations. They are not very sensitive to prices, and their high concern for service quality and brand names as well as the high priority they give to product design reflect the individualised demand of high-end consumers. In fact, for high-end consumption in Shanghai, service quality and brand names are the two most important factors. Product design is also given due attention, but price is not a decisive factor. At present, more than 90% of the international luxury labels generally recognised worldwide already have a presence in Shanghai, and the sectors they represent are mainly clothing, leather goods, watches, jewellery and cosmetics. Today, Shanghai has become a destination of choice when international luxury brands enter China.

Since college students mostly depend on their parents for living expenses, their consumption level will vary with the financial conditions of their families and there could be extreme disparity. College students generally have high recognition rates for brand names, and their clothing, shoes and bags are usually under trendy brands. They are more interested in brands such as H&M, ZARA, etc. and will seldom buy luxury brand products. They replace their mobile phones more frequently and they like Internet surfing. A minority of college students may be more advanced in their consumption because they have incomes from part-time jobs in their spare time.

The consumption market for Shanghai children is expanding. Most children nowadays are the single child in their families, so their parents, as well as paternal and maternal grandparents, are willing to spend money on them. Most of their parents are the new generation brought up after China’s reform and opening up. While their spending power is rising, their knowledge and consumption attitudes are more up-to-date, and they focus more on scientifically proven and modern methods of raising and educating their children. Besides spending on the usual children’s products, parents are also making purchases intended to develop their children’s knowledge in the arts, cultural studies and social sciences. The children themselves are gradually gaining more and more say, and they are also easily swayed by advertisements. Moreover, as children’s products are usually presented as gifts, famous brand names are more welcome.

Overall trends in the consumer market

Due to the faster pace of life and work, dining out on a regular basis has become the norm in Shanghai. According to a survey of Shanghai consumers, 62.1% of the respondents dined out with the objective of meeting with friends. In choosing restaurants, Shanghai consumers are more concerned with the special characteristics and environment of the restaurants than the taste of the food. Also, getting restaurant information, discount coupons, group-buy tickets or check-in discounts through mobile phones has become a new consumption habit. 2014 was a milestone in the transformation of the catering industry; upmarket restaurants have transformed their operation one after another. Some changed for more mass-appeal. The increases in personal spending and family spending have gradually made up for the market loss arising from the decrease in institutional spending.

There has been considerable growth in cultural and entertainment consumption. As the living standard of urban residents rises, there are marked improvements in the quality of their lives. Thus, their spending in enjoyment consumption, such as culture, leisure and entertainment grows quickly and is taking up an increasing share of their total expenditure. According to a survey of urban household service consumption carried out by Shanghai Municipal Statistics Bureau, the per capita expenditure in education, culture and entertainment services by Shanghai urban households in 2014 was Rmb4,931, a year-on-year increase of 19.6% and was the fastest growing category among all expenditure items.

Online shopping has already become an important component of consumption. More and more shopping is online, growing at an annual rate of almost 50%. According to the data released by Alipay, per capita online spending in Shanghai reached Rmb38,560 in 2014, ranking first among all provinces of China.

With 1.33 credit cards per capita, Shanghai is China’s top city in credit card consumption, exceeding the average national rate. In addition to big-ticket items and consumer durables, such as cars, large home appliances and overseas travel, services characterised by ongoing consumption, such as education and training, beauty and slimming courses, and early education for small children, are also becoming hot spots for credit card spending in recent years. Some items that involve the bundling of products and services are also joining the ranks of credit card consumption. Examples include household building materials as well as decoration and renovation. From these, it can be seen that the scope of industries involved in credit card consumption is expanding continuously.

Shanghai’s consumer market has marked seasonal fluctuations. The market booms generally during the Spring Festival, National Day, Labour Day and New Year Day. Young consumers are more active in spending for Valentine’s Day and Christmas. Ever since the implementation of the extended holiday arrangement, the golden week effect is in evidence. After a three-day holiday has been instituted for Qing Ming (tomb-sweeping), Dragon Boat and Mid-Autumn Festivals, the effects of the latter two are evident. For a lot of merchandise, there are also clear-cut seasonal patterns. For example, at the end of winter break and summer break, demand for stationery and schoolbags will go up. Immediately before the 1st of June, sales of children’s articles, such as toys, children’s wear and stationery will be most feverish. For air conditioners and electric fans, June to August is a peak season.

4.  Profiles of Shanghai’s Major Commercial Districts

Shanghai’s Planning Outline for the Layout of Commercial Outlets (2014-2020) has put forward a “3+1” layout system for the city, which is made up of “municipal, district and community level commercial centres supplemented by distinctive commercial areas of shopping streets”.

First, 15 municipal-level commercial centres will be formed, namely Nanjing East Road, Nanjing West Road, Sichuan North Road, Yuyuan Tourist Mart, Xujiahui, Huaihai Middle Road, Xiao Lujiazui - Zhangyang Road, Wujiaochang, Zhongshan Park, International Tourism and Resorts Zone, Hongqiao Business District, Zhonghuan (Zhenbei), New Hongqiao – Tianshan, Daning and Zhenyu commercial centres, the last two being set up in the longer run.

Second, 56 district-level commercial centres will be formed, with 19 of them inside the Outer Ring Line. Among these, 17 are planned for development in the short term, namely Kongjiang Road, Dapuqiao, Gongkang, Changshou, Caojiadu, Waigaoqiao, North Bund, Nanfang Shopping Mall, Beizhonghuan, Changfeng, South Bund, Qiantan Area, Tangzhen, World Expo Park, Xuhui Waterfront Area, Yuqiao Area and Hongqiao Wuzhong Road Area. Two are included in the medium to long term planning, namely Yangpu Waterfront Area and Suhewan Area. Another 37 district-level commercial centres are planned outside the Outer Ring Line to serve as commodity circulation centres that correspond to the development of the new towns.

Currently, Shanghai’s main commercial districts include Nanjing East Road, Nanjing West Road, Sichuan North Road, Yuyuan Tourist Mart, Xujiahui, Huaihai Middle Road, Xiao Lujiazui - Zhangyang Road, Wujiaochang, Zhongshan Park, International Tourism and Resorts Zone, Hongqiao Business District, Zhonghuan (Zhenbei), and New Hongqiao – Tianshan. Daning and Zhenyu commercial districts will also come into being in the longer run.

Nanjing East Road

Nanjing East Road is acclaimed as ‘China’s No. 1 Shopping Street’ while in the past, it was well known in the Far East for its international ambience. Today, it is not only one of the places Shanghai residents choose to seek their leisure or do their shopping, but also a must-go destination for tourists. The business mix in Nanjing East Road is mainly of mid-range products, but there are also a number of Shanghai specialty product shops and century-old shops to which most tourists to Shanghai would pay a visit. Shopping malls in Nanjing East Road include: Henderson Metropolitan, Hongyi Plaza, Plaza 353, Apple Store, Shanghai Landmark, Orient Shopping Centre, Yong’an Department Store, Shanghai No. 1 Department Store, Brilliance Shimao International Plaza, New World City, Raffles City and New World Daimaru Department Store.

Nanjing West Road

Like Tsimshatsui of Hong Kong, there is a large cluster of upmarket shopping malls and brand names in Nanjing West Road, giving the area the feel of upper-class shopping locations in foreign countries. Top fashion brands such as Chanel, Louis Vuitton, and Ferragamo all have stores or even flagship stores on Nanjing West Road. Shopping malls in this area—Citic Square, Plaza 66, Westgate Mall and Golden Eagle Shopping Center—are patronised by many high-paid white-collar workers, expatriates working for multinational companies, high-income families and tourists. Along Nanjing West Road, layout is being planned for three commercial districts, namely a ‘golden triangle’ (of Citic Square, Plaza 66 and Westgate Mall), a ‘Golden Five Star’ around Jing’an Temple and Shimen Road commercial district. As such, it will evolve into a multi-faceted commercial model combining top brand names with fast fashion and meet the consumption needs of diverse consumer groups, including residents, white-collar workers and high-end businesspeople.

The golden triangle formed by Westgate Mall, Citic Square and Plaza 66 is the longest-established high-end commercial district appearing on Nanjing West Road. Echoing the golden triangle from a distance is the Golden Five Star commercial district in the Jing’an Temple area. The Golden Five Star district is formed by the Park Place, Wheelock Square, Jiuguang Department Store, Jing An Kerry Centre and Eco City 1788. In addition, the Dazhongli project, a joint venture between Swire Properties and HKR International, is scheduled to open for business in phases, with effect from 2016. Both Jing An Kerry Centre and the yet to be completed Dazhongli project are large commercial complexes within the Nanjing West Road commercial district and are poised to become all-new commercial landmarks for Jing’an, as well as the whole of Puxi. On the other hand, Shimen Road commercial district is also repositioning to better meet general public needs. This district is bounded by Qinghai Road to the east, Maoming Road to the west, Weihai Road to the south and Beijing Road to the north. Hence, it also includes Wujiang Road Leisure Street. Currently, fast fashion brands including Marks & Spencer, GAP, H&M and Uniqlo have already opened shops here.

Picture: Shanghai’s Major Commercial Districts
Picture: Shanghai’s Major Commercial Districts

Sichuan North Road

As a long-established traditional commercial street, Sichuan North Road had once rivalled Huaihai Road and Nanjing East Road as one of the three major commercial streets of Shanghai. The major shopping malls include Springtime, Dongbao, Paris Spring (of New World), Hongkou Plaza (of CapitaLand Mall Asia), Jaje Plaza, One Prime, Citic Plaza and Citic Square. Sichuan North Road commercial district is positioned as a street for commerce, tourism, culture and leisure in the northeast area of Shanghai. Hongkou Plaza at the Hongkou football field section is the “first mover” for the upgrading of Sichuan North Road commercial district. Through unique dining services and business format planning, Hongkou Plaza has been able to attract consumers in a short period of time. The area has developed into a fully functional ‘small loop’ that comprises department stores, specialty stores, restaurants and cinemas. There is the possibility that Sichuan North Road would form a ‘golden triangle’ with the core business and commercial districts of Nanjing Road and the Bund.

Yuyuan Tourist Mart

Yuyuan Tourist Mart is a tourist attraction with a lot of tourist souvenirs of traditional flavour for sale. Since it is historically the trading hub for small commodities, there are still many specialty stores and wholesalers of low-end small commodities operating in Yuyuan to this day. Among them, Fuyoumen Small Merchandise Wholesale Market located next to the Town God’s Temple is a favourite shopping place for Shanghai’s general public, ordinary families and elderly citizens. The area is also a centre for local jewellery shops for gold and ornaments.

Xujiahui

Xujiahui commercial district is an integrated consumer area consisting of a large number of commercial buildings of different styles and different grades. Together with the small and medium-sized specialty stores in the neighbourhood, the area attracts consumer groups of different levels and preferences. Shopping malls here include Orient Shopping Centre, Grand Gateway 66, Bailian Xuhui Shopping Mall, Pacific Department Store, Huijin Department Store, Metro City, Shanghai Liubai Department Store and Huilian Commercial Building. Many merchants of foreign brands have set up stores in the upmarket malls in this area, such as Grand Gateway 66 and Metro City. While Buynow specialises in computer and electrical appliances of both international and domestic brands, fashionable merchandise of all sorts are sold in Huijin Department Store and Pacific Department Store. In addition, SDC Mall has been open for business since 2012, offering 120,000 square metres in business floor area. Situated on top of Yishan Road Metro Station, the interchange station for Lines 3, 4 and 9, SDC Mall is a ‘shopping mall atop the metro’ that can be considered as an extension of the Xujiahui commercial district. Though Xujiahui is an established commercial district in Shanghai, it possesses no advantages in fast fashion, specialty dining or infant consumption because of a lack of commercial space. The opening of Bailian Xuhui Shopping Mall and SDC Mall allows many new brands the chance to cluster into Xujiahui in the form of flagship stores. This helps bolster the young and trendy character of this commercial district and draw more shopper traffic to the area.

Huaihai Middle Road

The positioning of Huaihai Middle Road is to draw in mid-to-upmarket local consumer groups. Many top-tier global brands have found their way to the shopping malls on the two sides of Huaihai Middle Road. Large shopping malls in this commercial district include Shanghai Xintiandi, Shanghai Xintiandi Style, Shanghai Plaza (上海廣場), Shanghai Times Square, Hong Kong Plaza, Pacific Shopping Mall, Parkson, Paris Spring Huaihai Store, Orient Shopping Centre and Novel Department  Store. Two commercial complexes, Shanghai K11 and Shanghai iAPM Shopping Mall, have joined the list in recent years. These two shopping malls of landmark status help to draw shoppers to Huaihai Road and elevate the quality of the whole street to new heights. As a centralised location for many theme shopping malls on the mainland, Huaihai Middle Road offers medium to high-end brands and products to the younger middle-class in Shanghai. In recent years, Tianzifang and SML Center at the periphery of this commercial district have also turned into popular shopper destinations.

Xiao Lujiazui - Zhangyang Road

Xiao Lujiazui - Zhangyang Road has already developed into a mature commercial district, complementing the Shanghai World Expo Park and Changli Road commercial street to the south. Among the many shopping malls are No. 1 Yaohan Nextage, Time Square (of China Resources), Shinmay Plaza, Pacific Digital Plaza and Buynow. This commercial district has New Shanghai Commercial City as an anchor, Zhangyang Road as a central axis and stretches to Shangcheng Road in the north and to Weifang Road in the south. It is positioned to provide shopping, dining, business, entertainment, cultural and leisure functions. It offers mainly mid-range products and services with upmarket varieties to cater to the consumption needs of Pudong residents, businesspeople as well as tourists. Furthermore, the Shanghai IFC Mall, Apple Store and Super Brand Mall in the financial business district of Pudong New Area are the fashionable landmarks of Pudong. Their customers are mainly the white-collar office workers in the business district and the families living in the luxury residential areas in Lujiazui. Zhangyang Road commercial district has great development prospects, since the Greater Pudong concept is poised to increase its shopper traffic substantially, while the soon-to-be-completed Shanghai Disney Resort will generate huge tourist consumption.

Wujiaochang

In Wujiaochang commercial district one can find Wanda Plaza, Bailian Youyicheng Shopping Mall and Orient Shopping Centre Yangpu Store. Wujiaochang is surrounded on all sides by commercial buildings. After years of remodelling, the district is now home to Wanda, Paris Spring, Bailian Youyicheng Shopping Mall and Orient Shopping Centre Yangpu Store. Together with Suning Wujiaochang Store retail sales of home appliances are an integral part of the area and these shopping facilities have given impetus to the development of this commercial district. For many years, Wujiaochang has been known largely for its professional specialty shops, but with the stable operation of large shopping centres, as well as mid-to-upmarket large department stores, such as Orient Shopping Centre and Paris Spring, shopper traffic for the whole district has increased. Shanghai Hopson International Plaza will also provide a large upmarket shopping centre of 160,000 square metres to the district upon its completion in 2016.

Zhongshan Park

Capitalising on its advantage as a transportation hub, Zhongshan Park commercial district has initially set up its layout as a traveller interchange-cum-commercial centre, with Cloud Nine Shopping Mall as its anchor, while highlighting its specialty as a home appliance centre as well. Its major shopping facilities include Cloud Nine, Paris Spring, Metro Town, Huaning Hongji Lifestyle Centre, Ashley Furniture Homestore, as well as some leading home appliance enterprises, such as Gome, Suning and Yongle. On the western side of the district, the construction of CapitaLand’s Changning Raffles City is in full swing. With its scheduled opening for business in 2017, it will become another bright spot to draw consumers to Zhongshan Park commercial district.

This commercial district has planned to develop a 1.5-km sky-bridge system called “Dragon’s Wing” that with span the busiest shopping area of the Zhongshan Park district. According to the layout plan, an elevated corridor will be constructed across Changning Road that stretches from south to north to link up Kaixuan Road, Huichuan Road and Dingxi Road. It will also link up the nine shopping facilities of Changning Raffles, Cloud Nine, Gome, Metro Town, Ashley, Paris Spring, Zhao Feng Plaza, Unicom Mansion and Shanghai Book City. Most of the facilities will be connected through a sky bridge system while some sections are linked up through walkways on the ground level.

International Tourism and Resorts Zone

The Shanghai International Tourism and Resorts Zone is located at central Pudong area with a planned area of 20.6 sq km. Its core area of some 7 sq km will operate around the Shanghai Disney Resort, and will develop in conjunction with the surrounding tourist resources to provide a commercial cluster with outstanding leisure, entertainment and shopping facilities. The commercial facilities in the core area will mainly provide supporting services to the tourism and resorts zone. As for the Shanghai Disneyland at the core area of the zone, it will comprise the Disneyland theme park, theme hotels as well as other supporting retail, dining, entertainment and parking facilities. There will also be other public facilities, including a central lake, an encompassing river and a public transport interchange.

Hongqiao Business District

Located on the western side of Shanghai’s central urban area, Hongqiao Business District is currently implementing a major project to develop a core area of 4.7 sq km, including a national convention and exhibition centre on a 1 sq km site. The Hub, which has already come into operation, is the only commercial building in the district that directly links to the transport interchange. At present, 47 projects in Hongqiao Business District have already topped out their structures. The construction of major transport networks, including high-speed railway and underground railway, is expected to trigger the increasing development of pivotal living and commercial facilities in this district.

Zhonghuan (Zhenbei)

In the past, Zhonghuan commercial district was known for the strong presence of hypermarkets, and building material supermarket was the main business format. Today, the district houses the Bailian Zhonghuan shopping mall, NGS Plaza, Oasis Middle Ring Business Centre and MTR City Plaza as its main components. Thus, a new business format has emerged in the district that integrates a full array of dining, leisure, entertainment and cultural facilities. Of all consumer groups in Zhonghuan commercial district, 20% are coming from other YRD areas, such as Suzhou and Zhejiang. As a result of the layout of major roads, the commercial facilities of Zhenbei district are relatively scattered, basically along both sides of the Middle Ring Line. Yet improvement is forthcoming, as Putuo District Government is constructing a circular sky-bridge corridor at the junction of Jinshajiang Road and Zhenbei Road, which will link up the south and north towers of MTR City Plaza, Oasis Middle Ring Business Centre and NGS Plaza, thus changing the scattered layout of business and trading facilities in Zhonghuan District.

New Hongqiao - Tianshan

Converging in the New Hongqiao - Tianshan commercial district are a number of well-known upmarket communities, and a consumer market focusing on upmarket consumption has taken shape. There are four mid-to-upmarket department stores operating in the district, namely Shanghai Takashimaya Department Store, Hongqiao Friendship Center, Tianshan Parkson and Huijin Hongqiao Department Store. There are also commercial enterprises operating with distinctive features in the district, such as L’Avenue Shanghai, Hongxin Fashion Plaza and JSWB Hongqiao International Furnishing Center.

This district will adopt a commercial development layout characterised by two north-south roads (Loushanguan Road and Zunyi Road) and two east-west roads (Tianshan Road and Xianxia Road):

(1) Junyi Road commercial area will capitalise on the presence of L’Avenue Shanghai, Hongqiao Friendship Center and The HQ to build up a New Hongqiao core commercial area that offers top-class commercial facilities in the trendy styles of Europe and the US.

(2) Tianshan Road commercial area will build up a centre that integrates shopping, cultural and mid-high end entertainment facilities through the presence of Tianshan Parkson, Huijin Hongqiao Department Store, Hongqiao Tiandu (虹橋天都) and Hongxin Fashion Plaza, together with the Shanghai Hongqiao cultural and art centre under construction.

(3) Loushanguan Road commercial area will become a centre for trendy styles and leisure living through the presence of Shanghai Arch and JSWB Hongqiao International Furnishing Center.

(4) Gubei international commercial area will become a centre highlighted by the regional characteristics of northeast Asia, as well as Japan and Korea, with the presence of Shanghai Takashimaya Department Store and a ‘golden city’ pedestrian walk.

Content provided by Picture: HKTDC Research
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