Shopping villages, factory stores all the rage

As the pandemic's impact eases, multibillion dollar market for luxury goods finds firm foothold in China's retail industry

Despite the COVID-19 pandemic, shopping villages comprising exclusive streets of factory stores in China have seen booming sales and abundant visitors last year and so far this year. Outlets' business performance has been more robust than that of many traditional department stores in the retail sector, thanks to discount prices offered on international luxury brands. The suburban location of such shopping villages has also helped boost sales.

The pandemic has caused a certain negative impact on the retail sector. Unlike most department stores, outlets are mainly located in suburban areas. Such trendy shopping villages serve as outdoor complexes. They have become one of the go-to weekend or holiday destinations for urban families, and many families tend to bring along their children and pets.

Taking an hour-long self-driving trip to such outlets from downtown area has become a choice for many shoppers. They find such rides and the whole experience very relaxing. Since the pandemic broke out, the outdoor ambience of shopping villages makes it easier for people to get fresh air, keep themselves at a distance from each other, and avoid possible infection from the crowd, industry experts observed.

With international travel stagnating due to the pandemic, China's domestic luxury market has rapidly rebounded. Chinese consumers continued to buy high-end luxury bags, clothes, jewelry and wines in China.

"Owing to international travel curbs, outlets and duty-free stores have become the shopping destinations for many middle-income Chinese consumers to buy international brands in China. Duty-free stores mainly provide perfume and cosmetics, and outlets at shopping enclaves mainly provide clothing, shoes and bags," said Shang Xiuli, deputy secretary-general of the China General Chamber of Commerce.

"In the next three years, China's outlet sector is expected to see their operations reach the highest standard internationally. In the post-pandemic era, outlets are foreseen to become a sector that can help promote consumption upgrade and boost the economy in China," she said.

In 2002, the outlets sector started its development in China, which was later than their origins in the United States and Europe, but the sector has developed rapidly in China.