Asia Distribution and Retail

Commercial Districts in Shenzhen Dec 2015

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Table of Contents:

• Overview of Shenzhen

• Major commercial districts of Shenzhen

• SWOT analysis of Shenzhen’s commercial districts

• Appendix

• Shenzhen is one of the two hub cities in the Pearl River Delta (PRD) region*. It is China’s first Special Economic Zone (经济特区; SEZ)**

• Shenzhen has ten districts, namely, Luohu (罗湖), Futian (福田), Nanshan (南山), Bao’an (宝安), Yantian (盐田), Longgang (龙岗), Guangming (光明), Pingshan (坪山), Longhua (龙华) and Dapeng (大鹏)

•The Pearl River Delta economic zone is formed by nine cities, namely Guangzhou (the provincial capital), Shenzhen, Foshan, Zhuhai, Jiangmen, Zhongshan, Dongguan, four districts

and counties of Huizhou and four districts and counties of Zhaoqing. According to the Fung Business Intelligence Centre, there are two hub cities in the PRD region, namely Shenzhen

and Guangzhou. Hub cities are key cities in a certain cluster, with GDP generally accounted for over 20% of the GDP of the cluster.

**The Special Economic Zones (SEZs) of China are regions/cities that are granted special economic policies and flexible government measures that include special tax incentives for

foreign enterprises.

Shenzhen is one of the hub

cities in the PRD Region

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• The State Council has declared Shenzhen as a National Economics Centre (全国性经济中心城市) and a “city of global clout” (国际化城市)

• By the end of 2015, Shenzhen had a population of approximately 18 million, of which,

11.4 million are permanent residents*

Shenzhen is an influential and international city

* Shenzhen Statistics Bureau

3

Key economic indicators According to the Economic Competitive Index report published by the Chinese

Academy of Social Sciences in 2014, Shenzhen ranked number one in terms of

city’s total competitiveness level

Exhibit 1 shows the key economic indicators of Shenzhen benchmarked against

the PRD region and country-level data in 2015

4

GDP Total retail sales Population million

billion yuan yoy billion yuan yoy

National 67,670.8 6.9% 30,093.1 10.7% 1,374.6

PRD region 7,281.3 8.0% 3,133.3 10.1% 58.7

Shenzhen 1,600.2 8.8% 484.4 9.3% 10.6

Source:

National, Guangdong and local statistics bureaus; compiled by Fung Business Intelligence Centre

Exhibit 1: Key economic indicators, 2015

Shenzhen 1,750.3 8.9% 501.8 2.0% 11.4

Key economic indicators

Nanshan

371.5

(9.3%)

The ten administrative districts in Shenzhen and

their respective GDP, 2015

Source: http://www.sztj.gov.cn/xxgk/tjsj/tjgb/201604/t20160426_3606261.htm

compiled by Fung Business Intelligence Centre

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GDP billion yuan (yoy growth )

Futian

325.6

(9.0%)

Bao’an

264.1

(9.0%)

Long

Gang

263.7

(10.5%)

Luohu

172.8

(8.0%)

Long

Hua

163.6

(8.0%)

Guang

Ming

67.1

(9.4%)

Yantian

48.7

(8.9%)

Ping

Shan

45.8

(9.4%)

Dapeng

27.4

(4.0%)

Exhibit 2: Shenzhen’s GDP, 2010-2015 Exhibit 3: Total retail sales, 2010-2015

• Total GDP in Shenzhen amounted to 1,750.3 billion yuan in 2015, up by 8.9% yoy, while total retail sales

in Shenzhen were 501.8 billion yuan, up by 2.0% yoy (Exhibit 2 and Exhibit 3)

• Growth in total retail sales has continued to slowdown in Shenzhen in recent year, due mainly to a

relatively weak economic sentiment

Source: Shenzhen Statistics Bureau

Key economic indicators (Cont’d)

Source: Shenzhen Statistics Bureau

billion yuan

billion yuan

6

958.2 1,150.6

1,295.0 1,450.0

1,600.2 1,750.3

12.0%

10.0% 10.0% 10.5%

8.8% 8.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2010 2011 2012 2013 2014 2015

GDP (billion yuan) yoy changes %

300.1 352.1

400.9 443.4

484.4 501.8

16.9% 17.3% 16.5%

10.6% 9.3%

2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

-

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015

Total retail sales (billion yuan) yoy changes %

• Exhibit 4 and Exhibit 5 show the per capita disposable income and per capita consumption expenditure

of urban households in Shenzhen between 2010 and 2015

• Per capita disposable income reached 44,633.3 yuan in 2015, up by 9.0% yoy; at the same time, per

capita consumption expenditure was 32,359.2 yuan, up by 12.2% yoy

Key economic indicators (Cont’d)

Source: Shenzhen Statistics Bureau Source: Shenzhen Statistics Bureau

Exhibit 4 Per capita disposable income, 2010-2015 Exhibit 5: Per capita consumption expenditure, 2010-2015

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yuan yuan

21,380.9

36,505.0 40,741.9

44,653.0 40,948.0

44,633.3

10.7%

12.7%

11.6%

9.6% 9.0% 9.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2010 2011 2012 2013 2014 2015

Per capital disposable income of urban residents…yoy changes %

22,806.5 24,080.0 26,727.7

28,812.4 28,853.0 32,359.2

5.9% 5.6%

11.0%

7.8%

10.1%

12.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0

5000

10000

15000

20000

25000

30000

35000

2010 2011 2012 2013 2014 2015

Per capita consumption of urban residentsexpenditure (yuan)

yoy changes %

Existing metro network

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As of June 2015, Shenzhen has five metro lines and 131 metro stations

Planned metro network

9

• Five more metro lines are currently under construction in Shenzhen*

Exhibit xxx: Shenzhen metro lines under construction

*http://www.szmc.net/page/plan/index.html

Line Station Distance (km) Operation year

6 Shenzhen Station East -

Songang

37.2 n/a

7 Tai’an – Shenzen Zoo

29.8 End of 2018

8 Guomao - Xiaomeisha

26.4 n/a

9 Xicun – Shenzhen Bay

37.2 End of 2016

11 Central Futian - Songgang

51.2 June 2016

Source:

https://zh.wikipedia.org/wiki/%E6%B7%B1%E5%9C%B3%E5%9C%B0%E9%93%81#/m

edia/File:Shenzhen_Metro_Extension_Plan-zh.svg

6 1

2 3

4 5

Location of the six commercial districts of Shenzhen: 1. Dongmen 2. Renmin Road South 3. Huaqiangbei 4. Central Futian

5. Nanshan 6. Overseas Chinese Town 10

Location of major commercial districts (Cont’d)

1. Dongmen

2. Renmin

Road South

3. Huaqiangbei

4. Futian 6. Overseas

Chinese Town

5. Nanshan

Luobao Line

Huanzhong Line

Shekou Line

Longgang Line

Longhua Line

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Key features of major commercial districts in Shenzhen

No. Commercial district

Location Features Size* (sqm)

Foot traffic* Major retail formats Major retailers Metro station

1 Dongmen (东门商圈)

Luohu district

Oldest commercial district in

Shenzhen; mainly bargain shops for

apparel and accessories

176,000 sqm

600,000 daily

Department store, specialty store, wholesale market

Maoye Department Store,

Rainbow Department Store

Laojie

2 Renmin Road South

(人民南商圈)

Luohu district

Largest commercial district in Shenzhen

n.a.

n.a.

Department store, shopping mall

Friendship Department Store, King Glory Plaza, KK Mall, MixC,

Luohu Commercial

Centre

Guomao

3 Huaqiangbei (华强北商圈)

Futian District

Famous for electronics

markets

n.a. 600,000 daily

Department store, shopping mall, electronic wholesale

market

Maoye Department Store,

Rainbow Department Store, Women’s World, Suning, Sundian

Huaqiangbei Huaqianglu

4 Nanshan (南山商圈)

Nanshan district

Mostly community stores

1,510,000 sqm

n.a.

Department store, shopping mall, supermarket

Haiya Department Store, Rainbow

Department Store, Coastal City

Shopping Mall

Houhai

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Exhibit xxx shows some of the key features of major commercial districts in Shenzhen

*the Bluebook of Pearl River Delta Circulation

No.

Commercial district

Location Features Size* (sqm)

Foot traffic* Major retail formats Major retailers Metro station

5 Central Futian

(福田中心商圈)

Futian District

Shenzhen’s central business area

Has the largest underground

commercial street in Shenzhen – Link City Shenzhen Exhibition

Centre and Civic Centre are located in

this area

n.a.

n.a.

Department store, shopping mall, supermarket

Dream-on Department Store , Coco Park,

Central Walk, Link City

Shopping park Exhibition Centre

6 Overseas Chinese

Town (华侨城商圈)

Nanshan district

Shenzhen’s major tourist attractions

n.a.

50 million annually

Department store, shopping mall, supermarket

Wanpan Department Store, Xinnankang Department Store

Huaqiaocheng

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Exhibit xxx: Key features of major commercial districts in Shenzhen

Key features of major commercial districts in Shenzhen (Cont’d)

*the Bluebook of Pearl River Delta Circulation

Department Store

Convenience Store

Supermarket and Hypermarket

Shopping Mall

Metro Station

Specialty Store

Location of major retailers

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Dongmen commercial district: overview

Dongmen commercial district, also called the

“Old Street” (老街), is historically the oldest

commercial district in Shenzhen

The commercial area is popular among tourists,

youths, and mid- to low-income people; many

bargain shops that offer trendy apparel and

accessories for mass market can be found in

Dongmen

Several famous retailers include Maoye

Department Store, Rainbow Department Store

and the Sun Square are located in Dongmen

15

Source: http://citylife.house.sina.com.cn/detail.php?gid=47158

7-11 CVS

Wenhua Mart:

• Mid-low end • Bargain stores for clothing

White Horse Apparel

Wholesale Market

Maoye Department Store

• Mid-end • 9 Floors • 40,000sqm • Opened: 1997

Mongkowk Plaza

• Mid-low end • Bargain stores for clothing

Polision CVS

Jiukong Plaza

Rainbow Department Store

• Mid-end • 6 Floors • 26,000 sqm • Opened: 2000

Golden World Plaza

• Mid-low end • Bargain stores for clothing

Nantang Commercial Plaza

• Mid-low end • Bargain stores for clothing

Polision CVS

Dongmen Ding Square

• Mid-low end • Bargain stores for clothing

Metro Station

7-11 CVS

Dongmen commercial district: location of major retailers

16 Source: Fung Business Intelligence Centre

Renmin Road South commercial district: overview

Renmin Road South commercial district is next to Luohu border. This commercial district is popular among people from Hong Kong to spend their weekend in Shenzhen

Renmin Road South commercial district is also a thriving place for dining and entertainment in Shenzhen. Apart from high-end hotels such as Shangri-La and Best Western Shenzhen, there are many entertainment facilities including theaters, KTV, bars, night clubs and numerous restaurants in this district

Several department stores and shopping malls include Maoye Department Store, Friendship Department Store, King Glory Plaza, KK Mall and MixC Shopping Mall are located in this district

17

Source: http://www.qigaipo.com/

MixC Shopping Mall

• Mid- to high-end • Developed by China Resources

(Holdings Company) Limited • 188,000 sqm (Built-up area) • Opened: 2004

Reel Department Store

• Mid- to high-end • Located inside MixC • 4 floors • Opened: 2004

7-11 CVS

Friendship Department Store

• Mid-end • 3 Floors • 15,600 sqm (Gross floor

area) • Opened: 1984

Maoye

Department Store

Pollison CVS

King Glory Plaza

• Mid- to high-end • 120,000 sqm • Opened: 2004

Metro Station

Metro Station

KK Mall

• Mid- to high-end • 83,500 sqm • Opened: 2004

Renmin Road South commercial district: location of major retailers

18 Source: Fung Business Intelligence Centre

Huaqiangbei commercial district: overview

Huaqiangbei commercial district is one of

Shenzhen’s busiest commercial districts. The area is

most famous for electronics markets including SEG

Electronics and Huaqiang Electronics World

Consumer electronics professional stores include

Gome, Suning, and Sundian can be found in

Huaqiangbei

Other retailers include Maoye Department Store,

Rainbow Department Store and NICO Women’s

World. The district is popular among Shenzhen’s

middle-class consumers

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Source: http://www.uutuu.com/fotolog/detail/1492190/picshow/

Maoye Department Store

• Mid-end • 83,000 sqm (Gross floor

area) • 10 floors • Opened: 2003

NICO Women’s World

• Mid- to low-end • Shops for bargain clothing

and accessories • Opened: 2004

7-11 CVS Metro Station

Women’s World

• Mid- to low-end • Shops for bargain clothing and

accessories • 11,000 sqm (Gross floor area) • Opened: 1994

Children’s World

• Mid- to low-end • Shops for bargain clothing and

accessories • 6,000 sqm (Gross floor area) • Opened: 1999

Metro Station Polision CVS

Duty Free Mall

• Mid- to high -end • 3 floors • Opened: 1997

Rainbow Department Store

• Mid-end • Community store • 20,000 sqm (Gross floor area) • 4 floors • Opened: 1984

Huaqiangbei commercial district: location of major retailers

Suning Expo

Sundian Consumer Electronics

20 Source: Fung Business Intelligence Centre

Nanshan commercial district: overview

Nanshan commercial district is located in the western part of Shenzhen. The area has attracted

consumers from both Nanshan district and Bao’an district

Major retailers include Haiya Mega Plaza, Coastal City Shopping Mall, Rainbow Department Store,

Aeon and Carrefour

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Nanshan commercial district: location of major retailers

22

Metro Station

Pollison CVS

Coastal City Shopping Mall

• Mid- to high-end • Largest community store in Shenzhen • Shopping mall size: 120,000 sqm (Built-up area) • Commercial street size: 40,000 sqm (Built up area) • Opened: 2007

Polision CVS

Haiya Mega Square:

• Mid-end • 50,000 sqm (Built-up area) • Opened: 2014 (re-opened

after renovation)

Metro Station

7-11 CVS

Rainbow Department Store

• Mid-end • 15,000 sqm (Gross floor area) • 4 floors • Opened: 2007

Carrefour

Aeon

Renrenle

Source: Fung Business Intelligence Centre

Central Futian commercial district: overview Futian district is the administrative

and cultural center as well as a

major business hub of Shenzhen; a

number of five-star hotels such as

Marco Polo Shenzhen, Shangri-La,

and Golden Central can be found in

Futian

With an increasing number of

multinationals and large domestic

enterprises setting up offices in

Futian commercial district, the

white-collar workers and households

in nearby residential areas are the

driving force of consumption

Several retailers include COCO Park,

Central Walk, and Rainbow

Department Store can be found in

Central Futian commercial district

23

Source: http://www.szeat.net/news/html/2011-04/0802501217734.shtml

Metro Station

Metro Station

Metro Station

Poliision CVS

Carrefour

Central Walk

• Mid-end • 140,000 sqm (Built-up area) • Opened: 2007

Link City:

• Links two subway stations together: Exhibition centre station and Shopping centre station, with a total underground length of 663m.

• Divided into three areas: (a) consumer electronics and cartoon products (b) apparel, cosmetics and cafes, and (c) restaurants

• 27,000 sqm (Built-up area) • Opened: 2012

7-11 CVS

Poliision CVS

Metro Station

Coco Park

• Mid-end • 85,000 sqm (Built-up area) • Mainly restaurants, cafes and

bars • Opened: 2006

Aeon

Dream-on Department Store

• Mid- to high -end • 38,000 sqm (Built-up area) • 2 foors • Opened: 2010

Central Futian commercial district: location of major retailers

24 Source: Fung Business Intelligence Centre

Overseas Chinese Town commercial district: overview

Overseas Chinese Town (OCT)

commercial district is a tourism and

leisure destination; over 30 million

tourists visit this district each year

Famous tourist attractions include

Happy Valley, China Folk Culture

Village, Splendid China, and Window of

the World

Several big retailers can be found here,

including Yitian Holiday Plaza, Wal-

Mart, and King Banner Centre

25

Source: http://www.chinaoct.com/

26

Metro Station

Yitian Holiday Plaza

• Mid- to high-end • 135,800 sqm (Built-up area) • Opened: 2012

Metro Station

Xinnancheng

Department Store

7-11 CVS

Kingkey Banner Centre

• Mid-end • 120,000 sqm • Opened: 2008

Wanpan Department Store:

• Mid-end • Community store • 20,000 sqm (Gross floor area)

Walmart

7-11 CVS

Source: Fung Business Intelligence Centre

Overseas Chinese Town commercial district: location of major retailers

SWOT analysis of Shenzhen’s commercial districts

Strengths

• Strong purchasing power

• In 2015, the per capital disposable income

in Shenzhen reached 44,633 yuan while the

average urban disposable income in China

was 31,195 yuan

• An easily accessible transport network

• Each commercial district is at least covered

by one metro station

Weaknesses

• Lack of parking space

• Some commercial districts, such as Central

Futian, do not have enough parking space

to accommodate all vehicles

Threats

• Competition from retailers in Hong Kong

• Due to the price difference, many

consumers go to Hong Kong for shopping

• Competition from online retailers

Opportunities

• Cross-border e-commerce

• The State Council has approved the

establishment of the Shenzhen Qianhai

Free-Trade-Zone (FTZ). The development

of the Qianhai FTZ is likely to create new

retail opportunities as it offers several

preferential policies that are expected to

attract both domestic and international

retailers

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Appendix

The Chinese names of the companies mentioned in this newsletter are listed below

as a reference

Duty Free Mall (深圳免税商场), Dreams-on Department Store (君尚百货), Friendship

Department Store (友谊城百货), Maoye Department Store (茂业百货), Nankang

Department Store (南康百货), Rainbow Department Store (天虹商场), Reel Department

Store (芮欧时尚生活百货), Sun Square (太阳百货), Wanpan Department Store (湾畔百货)

Central Walk (怡景中心城), Children’s World (儿童世界), Coastal City Shopping Mall (海岸城),

Dongmen Ding Plaza (东门町广场), Golden World Plaza (金世界广场), Haiya Mega Square (海雅缤纷城), King Glory Plaza (金光华广场), Kingkey Banner Centre (京基百纳广场), KK Mall (京基·百纳空间), Luohu Commercial Centre (罗湖商业城), New 2000 Plaza (新2000广场), Link City (连城新天地), Mongkowk Plaza (旺角购物广场), MixC (万象城), Nantang Commercial Plaza (南塘商业广场), NICO Women’s World (女人世界名店), Wenhua Mart (文华商场), Women’s World (女人世界), Yitian Holiday Plaza (益田假日广场), Zhongwei Commercial Square (中威商业广场)

Aeon (永旺), Carrefour (家乐福), Renrenle (人人乐), Park n Shop (百佳), Wal-Mart (沃尔玛)

1000colors (千色店), Fiona (研丽), Manning (万宁), Sundian (顺电), Suning (苏宁), Watsons (屈臣氏)

Department

Store

Shopping

Mall

Supermarket

Professional

Store

Convenience

Store

Polision (百里臣), 7-11

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Asia Distribution and Retail Teresa Lam Vice President teresalam@fung1937.com (852) 2300 2466 Echo Gong Senior Research Analyst echogong@fung1937.com (852) 2300 2465

Fung Business Intelligence Centre 10/F, LiFung Tower, 888 Cheung Sha Wan Road, Kowloon, Hong Kong Tel: (852) 2300 2470 Fax: (852) 2635 1598 Email: fbicgroup@fung1937.com http://www.fbicgroup.com/

Contacts

© Copyright 2015 Fung Business Intelligence Centre. All rights reserved.

Though the Fung Business Intelligence Centre endeavours to have information presented in this document as accurate and updated as possible, it accepts no responsibility for any error, omission or misrepresentation. Fung Business Intelligence Centre and/or its associates accept no responsibility for any direct, indirect or consequential loss that may arise from the use of information contained in this document.

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