New World Department Store: Strive to adapt to the community functions of Chongwenmen business district

Whether it is the business district environment or its own internal strength, the Chongwen store of New World Department Store and even the Chongwenmen business district are lacking in "stamina" in the entire commercial renewal. A reporter from Beijing Business Daily visited the Chongwen store of New World Department Store many times and found that the New World Department Store of Chongwenmen was still difficult to return to its peak moment after several adjustments. Even though the shadow of department stores is weakening, the catering and experience formats are increasing, and the government's support is increasing, it is even more difficult for New World to awaken the Chongwenmen business district on its own. "Exhaustion" is a portrayal of the current Chongwenmen business district, where projects in the area continue to adjust the proportion of business formats, with promotions and preferential activities such as store celebrations, which are intended to drive the peak of passenger flow in the business district. In the eyes of industry insiders, the Chongwenmen business district needs to be upgraded from the inside out, update its positioning, and enhance the consumption driving force of the local population.

The influence of the old project is declining

Speaking of the first shopping mall in the hearts of the "post-80s", it is none other than Chongwenmen New World Department Store. Since entering the market in 1998, from the heyday to the adjustment, especially in the rise of the CBD business district, the old business districts such as Wangfujing and Qianmen have been constantly adjusted and renewed, and the Chongwenmen business district has inevitably been affected. NWDS had to speed up the pace of renovation.

This situation exists in traditional department stores, and it also directly affects the revenue of New World Group's department store business. According to the FY2023 report released by NWDS, revenue fell by 23.3%. According to the financial report data of NWDS in recent years, the group's annual profit in FY2018 decreased from HK$128 million in the previous year to HK$11 million, a decrease of about 91.4%, in FY2019, NWDS's annual profit was still HK$33 million, while in FY2020 and FY2021, the net profit was HK $484 million and HK$229 million respectively, and in 2022, NWDS is expected to lose HK$483 million, both of which are non-profit. Previously, NWDS N+ series brands gradually withdrew from the market. It can be seen that differentiated management and refined operation are powerful tools for self-operated brands to make a reputation.

The decline in its own performance is inseparable from the influence of the surrounding environment. The decline of the department store format and the rise of experience commerce once made the Chongwenmen business district face a dilemma. Not only NWDS, but also Guorui Shopping Center and Hejing BMF Shopping Center in Chongwenmen business district also need to enhance their presence in Beijing's business. During the visit, the footfall of KWG BMF Shopping Centre was slightly less than that of the Chongwen store of NWDS, and the footfall of Guorui Shopping Centre was also relatively small. On the contrary, the down-to-earth Soxiu City has significantly higher passenger traffic than other projects.

The proportion of catering formats has increased

Discount campaigns always bring a lot of traffic to commercial projects. Recently, NWDS Chongwen Store launched an anniversary celebration activity, and many brands in the project ranked first in North China and first in Beijing in terms of single store sales. However, the single project has also attracted the attention of the business district. According to the data as of November 5, the recent navigation search of NWDS reached 300,000 people, and the soaring value of 91% also indicates the high popularity of the project during the store celebration, and the score of 4.7 points on Dianping is also the first place in the consumption list of Chongwenmen business district.

A discount campaign leveraged sales, but operators in the Chongwenmen business district are trying to adapt, looking forward to continuous traffic blessings. When a reporter from Beijing Business Daily visited the Chongwenmen business district, he found that a catering area was added on the first floor of Soxiu City, and more than ten catering brands were introduced. On weekend afternoons, there is a lot of traffic in this area, taking the LINLEE hand-made lemon tea on this floor as an example, you have to wait nearly 10 minutes to pick up the meal after placing an order.

At the same time, the number of F&B brands in Guorui Shopping Center is also increasing. A reporter from Beijing Business Daily found in Dianping that there are 107 food brands in Guorui Shopping Center, and the number of brands accounts for almost half of the total number of brands in Guorui Shopping Center. The F&B area also has significantly higher footfall than the retail area.

KWG BMF Shopping Centre also welcomes customers with a similar "layout". According to Dianping, a total of 60 brands have been introduced in KWG BMF Shopping Center, of which 27 are food and beverage brands.

When referring to innovation and change, NWDS Chongwen Store also pointed out that it mainly focuses on the overall transformation of clothing and apparel and catering merchants. At the same time, brands such as TheNorthFace, MLB, and Red Star Forward Milk Bread Company have also settled in the Chongwen store of NWDS. In the skincare and make-up area, NWDS Chongwen store also introduced a number of high-end brands such as LAMER, Bulgari and Helena.

Nuggets Community Commerce

Although the Chongwenmen business district has a different status in Beijing's business, it radiates more than 10 communities in Chongwai Street, with a permanent population of about 44,000, and a large amount of consumption potential waiting to be released. Sun Zutian, head of CBRE's research department in North China, once said that there are many new residences in Beijing around Chongwenmen, and based on this, Chongwenmen business district should mainly serve the consumption of residents in the surrounding areas.

Not only the core commercial projects are increasing the proportion of catering, but the surrounding community service formats are also increasing. The "newcomer" Hademen Center in the Chongwenmen business district is mainly engaged in experience and leisure formats such as catering, fitness and beauty, business training and sports life. For example, Ananabana Skin and Scalp Rejuvenation Management Center, Hair Shampoo, Sanman Fitness, Bo Yitang Sanda Fight Club, etc., mainly meet the needs of young people for office, socialization, catering, entertainment, health and so on.

The increase in passenger flow in the business district will also drive the growth of service-oriented consumption. According to the "Implementation Plan for Cultivating and Building an International Consumption Center City in Beijing (2021-2025)", each district should have at least one modern comprehensive business district, and it is recommended that on the basis of the original commercial center in the new urban area, the business district should be upgraded according to the standard of modern comprehensive business district, so as to improve the consumer experience and build it into a landmark consumption center in the new city, making it a new consumption gravity point in the new urban area and its surrounding urban areas.

It is worth noting that the proportion of life services in emerging business district projects has increased significantly, which will form a benign complement to core business district projects by creating convenient and leisure consumption scenarios.

The brand power of the business district is weak

Consumption trends are constantly changing, and business districts are constantly adapting to new consumption. In the early 90s of last century, New World Group joined the renovation of the old city of Chongwenmen, and the implementation of new projects gave the old city a new look and became a new commercial highland. In the past 30 years, the traditional department store retail model seems to be unable to catch up with the rising experience business, leaving traditional projects including the Chongwenmen business district slightly behind.

Whether it is to increase the proportion of catering or the previous brand alternation, Chongwenmen business district is seeking a new positioning. Previously, the "Chongwenmen Business District Transformation and Upgrading Planning Plan" was officially released. The plan points out that the Chongwenmen business district will build a characteristic theme block, excavate ancient buildings and art museums, create important festivals such as the flower market and lantern festival, further improve the traffic environment and make Chongwenmen a vibrant and fashionable beautiful life business district.

In addition, when Chongwai Street in Dongcheng District launched the "2023 Chongwenmen Business District Consumption Season", it was mentioned that Chongwenmen Business District plans to promote the refinement and improvement of Xihuashi Street, Dongxinglong Street, Lianzihu and other boutique streets and alleys, and attract Internet celebrity stores, specialty restaurants, and various experience stores to join by building slow walking trails according to local conditions, renovating and updating pedestrian streets, and purifying sidewalks, so as to form dislocation and complementarity with major commercial complexes, continue business sentiment, and build a diversified and unique "Chongwen City".

At a time when the form of mass consumption experience is changing, only brand replacement cannot meet the new demands generated in consumption. Bai Wenxi, Chief Economist of IPG China, pointed out that the Chongwenmen business district has a rich historical and cultural heritage, which can be integrated into commercial projects, such as the opening of a museum-style shopping mall, to increase the cultural charm of the business district. In addition, the project can also introduce more innovative and technological elements to enhance the interactive experience of consumers in the store.

Upgrade details to be implemented

The transformation of Chongwenmen business district is imperative, and at the same time, more detailed adjustments need to be implemented. Chongwenmen business district also needs to form a brand awareness similar to "Wangfujing" and "Qianmen" to enhance the influence of the business district. Zhang Xinyuan, head of research at Co-Found Think Tank, a domestic consulting agency, pointed out that the business district can try to establish an industrial alliance and establish a cooperation alliance between businesses in the business district to jointly build an influential business district brand and improve the overall competitiveness of the business district.

The adjustment of the Chongwenmen business district needs to be upgraded both internally and externally. Lai Yang, chief expert of the Beijing International Trade Center Research Base, pointed out that the infrastructure of the Chongwenmen business district needs to be optimized, such as the road surface and barrier-free facilities connecting the sidewalks, so as to form a better block environment system and enhance the shopping experience of the business district. Commercial complexes in the business district need convenient passages to connect the flow of passengers, such as corridors between streets, to form interaction in the business district. At present, the flow of people and vehicles is carried out on the ground, which causes greater pressure on the traffic in the area.

Lai Yang also mentioned that commercial projects in the business district need to carry out relatively large-scale business adjustments, taking New World Department Store as an example, at present, the project is still too concentrated in the traditional retail industry, which is slightly outdated compared with the current "eating, drinking" and "leisure and entertainment" experience. KWG BMF Shopping Center does not have a high space utilization rate, and has introduced many large-scale brand stores before, which are not as attractive to consumers as small and micro stores.

It should be noted that in the Chongwenmen business district, the advantage of the main project being the dominant one is changing. Industry insiders pointed out that it is necessary to pay attention to the differentiation of business formats and brand portfolios with other projects in the business district, and also consider the connection with other projects in terms of consumption positioning and passenger flow lines, so as to achieve the optimal regional synergy.

/Remember/Person/Hand/Record/

Always changing, always new, continue to circle fans for generations

Chongwen Gate is one of the nine inner gates of Beijing, the national capital of the Ming and Qing dynasties. In the Yuan Dynasty, it was called Civilization Gate, and at the same time, it also left a very steppy and nomadic name - Hade Gate. From the perspective of the development timeline, the past of Chongwenmen is heavy, and the promotion and transformation of the Chongwenmen business district mentioned by the industry or market are always inseparable from the presentation of cultural connotation. At the same time, the growth of the business district also records the present and future that have been constantly changing. The rapid development of Beijing City is constantly creating more fashionable and dazzling new business districts in the city, such as International Trade Center, Sanlitun, Wangfujing, Shougang Park, etc., all of which highlight the prosperity of the capital's business. In Chongwenmen, there is not only the outline of commerce, but also the ordinary and fireworks of life in the streets and alleys.

At the beginning, the Chongwenmen business district only had traditional commercial formats such as Chongwenmen vegetable market and Jinglun Building, which were mainly department stores and markets.

After the completion of NWDS, more commercial facilities began to be laid out, which promoted the development of the residential market in the area, and there are now communities with a large number of residents such as Guorui City, Xinjing Home, New World Xinyi Home, and Flower Market Community near Chongwenmen business district. However, the consumption level of the surrounding residents is high, the flow of consumers is large, and the residential market has also promoted the development of commerce, and most of the owners living in this area are high-income and high-grade classes, which provides sustainable consumption support for the commercial development in the business district. The ice skating rink and electronic entertainment hall were the first to be introduced to NWDS and became the collective memories of many people. NWDS' classic anniversary event, "60 Hours", led the industry trend in the marketing activities of the entire Beijing business, which set a record of 180 million yuan in sales within 60 hours, attracting many enterprises to follow suit.

As early as 2004, the area of entertainment and leisure and catering formats in Chongwenmen business district has reached 10% and 15%, and the business district is no longer a single business district dominated by shopping in the traditional sense, and its business type has developed in the direction of leisure and entertainment, and the whole business district is positioned as a "youth business gathering place to guide fashion trends". There are more and more department stores in the surrounding area, and the commercial formats are becoming more and more diverse, and the business district is becoming more and more prosperous.

With the upgrading and change of consumption, the decline of the main business formats in the business district, and the rise of new business districts and new projects, the "ranking" of Chongwenmen has changed. Not only the change of positioning, but also the traffic pressure, as well as the lack of connectivity of projects in the region, Chongwenmen business district has become one of the key business districts to improve the quality of the "one circle, one policy".

In the future, the Chongwenmen business district needs to add more trendy content and increase the retention time. The more time consumers spend in the business district, the more they spend, so increasing cultural commercial formats, increasing experiential commercial projects, and increasing participatory commercial activities are the top priorities for the future upgrading of Chongwenmen business district. Chongwenmen business district should refine the classification of store formats, guide some stores with duplicate formats to change their business direction, optimize the business structure and increase the total length of stay, and then truly greatly improve the commercial thickness and cultural texture of the business district.

At the same time, Chongwenmen business district can be considered to be positioned as a multi-functional and complex modern business district, strengthening the expansion of its service functions, the extension of the service chain, the diversification of service means, and the diversification of service providers.

Beijing Business Daily reporter Liu Zhuolan Hu Jingrong