Chongqing - On March 17, Galeries Lafayette announced the closure of its Chongqing store at the end of March, just a year and a half after its grand opening in September 2023. This indicates a sign of transformation in China's retail landscape.
The Galeries Lafayette Chongqing store is located at In City Mall in Yuzhong District. (Photo/In City Mall)
Located at In City Mall in Yuzhong District, Galeries Lafayette aimed to tap into Southwest China's growing retail market, making Chongqing its first store in the region after Beijing, Shanghai, and Shenzhen.
Traditional department stores once thrived by offering a diverse selection of products and an effective business model. However, no business model lasts forever. Facing competition from large shopping centers and convenient neighborhood stores, coupled with the rapid growth of e-commerce, these traditional retailers have felt a significant impact, according to Li Ran, head of the Applied Economics Department at Chongqing Technology and Business University.
According to the Retail Research Center of Link Shop, 21 department stores closed nationwide in 2023, with at least 10 more closures announced for 2024.
Despite the decline of traditional department stores, China's retail environment remains dynamic. While some brands retreat, the demand for innovative shopping experiences is growing. In Chongqing, for example, 14 new malls are set to open in 2025, with notable additions like The Ring Garden City and Longfor Longxing Paradise Walk, poised to reshape the city's retail landscape.
One key to the success of these new shopping centers is their focus on creating unique, immersive experiences for consumers. Unlike traditional department stores that rely heavily on product variety, modern shopping malls emphasize entertainment, lifestyle, and interactive spaces.
For example, O'LANE, a park-style commercial district opened in the Guanyinqiao Business District, offers a green, interactive, and walkable environment, diverging from the typical boxy mall design.
"Park-style commercial districts have become a popular trend across the country," said a spokesperson from The Ring. "Smaller-scale, district-style commercial areas like Anfu Road in Shanghai and REGULAR in Chengdu have seen immense success, offering both convenience and a refreshing shopping atmosphere."
Meanwhile, specialized malls focusing on niche markets are also gaining ground. Retailers such as JD Super Experience Store, Suning, and GOME are now prioritizing specific categories, meeting consumer needs with professional products and services.
Government initiatives are also embracing the shift away from traditional department stores. According to Li, to stimulate consumption and rejuvenate physical retail spaces, the Chinese government has been encouraging the transformation of department stores into modern commercial venues.
In 2024, Chongqing Far Eastern City, which rebranded as a shopping center, and Sunshine Mall's transformation into a "city outlet" are both prime examples of how retailers are finding success by adapting to changing market dynamics.
The Sunshine Mall is located in Chongqing's Guanyinqiao Business District. (Photo/Sunshine Mall)
Sunshine Mall, located in the Guanyinqiao Business District, has experienced a remarkable resurgence after its transformation. In 2024, the mall generated 426 million yuan (about USD 58.9 million) in sales revenue, a 13% increase year over year, and attracted 7.7 million visitors, up 12.3% from the previous year.
"Traditional department stores still have a path forward as long as they have clear positioning and continually adapt their business models," said Li. "In the face of digital competition and changing consumer habits, businesses must be willing to innovate to stay relevant."