China retailers play poker in empty malls as shoppers go online

Property developer Dalian Wanda, owned by China’s second richest man Wang Jianlin, plans to close 10 malls across the country and redesign another 25 to cut retail space, China Business Newsreported last month.
Zong Qinghou, China’s fifth richest man with a beverage and chain-store conglomerate, said at a forum in August that online shopping businesses are “affecting China’s economic security” by suffocating stores that have to pay rents.

Stores Close Li Ning Co., a sports-clothing maker, is expected to post losses for the third consecutive year and has closed more than a thousand retail outlets since 2012. Anta Sports Products Ltd., a maker of shoes, has also been shutting down stores partly due to competition from online shopping.

The internet helps improve productivity and efficiency, but it can be quite painful for traditional businesses, according to Cao Lei, director of the China E-Commerce Research Centre. “Bookstores fail first, then clothing chains, then consumer electronics stores, then air-ticket booking offices, and in the future, bank branches and other traditional services facilities may fail.”