＂Ten Years in the East of the River and Ten Years in the West of the River＂： How has the territory of Guangzhou business circle changed in the past twenty years？

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Introduction: From Shangxiajiu Pedestrian Street and Beijing Road in Liwan District to Tianhe Road today, the core business district of Guangzhou has changed several times.

Behind this, the opening and transfer of brand stores, the fluctuation of rents in old and new business districts, and the cultivation of consumers’ habits also reflect the development path and thinking of physical business projects after the rapid rise of e-commerce in the changing economic environment.

Laiyuan 21st century business herald (jjbd21)

Reporter Luo Yiqi reports from Guangzhou

Changes and transformation of Guangzhou business circle in the past 20 years

The first flagship store of Apple Store and the settlement of line friends have made a huge splash in Guangzhou. The location of the two stores is precisely the Tianhe Road shopping district in Guangzhou.

In March 2016, Tianhuan Plaza, known as the "Final Work of Tianhe Road Business Circle", was officially put into trial operation. Followed by, Tianhe District is opening a number of new shopping centers.

This also brings challenges to operators.

Many analysts told reporters that in the current Guangzhou market, the cultivation period of commercial real estate is being extended from three years to five years.

The effect brought by the presence of high-profile brands such as Apple is becoming one of the breakthroughs. But whether to complete differentiated positioning and accurately attract investment; Whether to break the inherent thinking or even try destructive innovation will become an accelerator in the cultivation period.

Guangzhou’s retail brand gathering place was earlier concentrated in Shangxiajiu Pedestrian Street and Beijing Road in Liwan District, and now it has developed to Tianhe Road, and the core business circle has changed several times. Behind this, the opening and transfer of brand stores, the fluctuation of rents in old and new business districts, and the cultivation of consumers’ habits also reflect the development path and thinking of physical business projects after the rapid rise of e-commerce in the changing economic environment.

According to the analysis, people are now pursuing experience and customization. In the era of IP prevalence, it is the key to grasp these incisions in time. According to the statistics of dtz, since 2015-2016, the dividend of e-commerce has decreased and the operating cost has increased. In this environment, physical retail will also usher in new opportunities from 2017.

Endogenous changes of pedestrian street

Beijing Road and Shangxiajiu, two business districts that earlier carried Guangzhou’s consumption and culture, have undergone changes.

In the context of the rise of shopping centers and the impact of low-end consumption by e-commerce, in a certain sense, the tourism functions of the two pedestrian streets have become more and more prominent. Most of the layout are brands in the province, and all of them take protection or display and introduce old buildings.

On the weekend after the Lantern Festival, during the Guangfu Temple Fair in Guangzhou, various snacks or handicraft shops were arranged in the middle of the pedestrian street of Beijing Road, and the entrance was crowded.

At the same time, the pedestrian flow of Shangxiajiu Pedestrian Street outside several subway stations is in obvious contrast with the former. Especially once out of the pedestrian zone, the street shops are still lined with pedestrians in twos and threes.

The reporter’s on-the-spot visit found that Shangxiajiu Pedestrian Street is dominated by traditional Guangzhou snacks and local brand clothing, but the brand overlap rate is high. According to incomplete statistics, there are no less than 5 stores in the province, and no less than 2 stores in sports brands 361 and Anta. In Beijing Road, three stores were opened under the pure brand.

An employee in a pure store told reporters that these stores are divided into direct sales and franchise, some are flagship stores, and some are discount stores. In the face of reporters’ questions about repeated stores, more than nine employees in different stores said that "the products are different". However, according to the reporter’s observation, it is inevitable that the new and old models will be repeated, and the store layout ideas are basically the same.

Many insiders interviewed by the reporter said that the customers of these two traditional pedestrian streets in Guangzhou mostly come from other provinces or other areas in the Pearl River Delta. In particular, the scattered property rights of shops in Shangxiajiu Pedestrian Street have become a constraint in the process of introducing brands. The city customers who once gathered in Shangxiajiu moved to the Xicheng Duhui Shopping Center, which is not far from it and has a better experience.

The shortcomings of the pedestrian street began to appear in the rent performance. According to Xian Jiaxi, senior assistant director of dtz, told the 21st century business herald reporter, from the average rent price, Beijing Road is currently about 2000-2500 yuan/square meter/month, and it is nearly 1200 yuan/square meter/month in Shangxiajiu. In the past 2-3 years, the rent has been lowered by about 15% and 40% one after another.

However, in the view of Huang Wenjie, president of Guangdong Commercial Real Estate Investment Association, this is also a trend of the development of traditional physical retail. "The advantage of the old city lies in the historical and cultural precipitation, which highlights its own characteristics."

The change of old and new business districts

From Shangxiajiu and Beijing Road in Liwan District, to Lingyuan West Road and Huanshi East Road in Yuexiu District, and then to the sports center and Zhujiang New Town in Tianhe District, the preferred migration picture of retail brands in the region is formed. Behind this, it also reveals the change of old and new business districts in Guangzhou.

On a sunny Saturday in late February, the first shopping mall in Dongshan District (now merged into Yuexiu District), China Plaza, was discovered by a reporter from 21st century business herald, and pedestrians entered the mall one after another. Among them, map by BeLLe, a brand with a relatively large area, is a multi-brand collection store under Belle Group, but few buyers stay; The main store H&M has relatively more consumers, but its traffic is not very substantial.

These two stores are actually the first stores where two brands landed in Guangzhou.

"E-commerce is up." In the face of reporters’ questions about the sparse passenger flow in the store on Saturday, the cashier in Belle Store said this.

A salesman who has been in the store for a long time told the reporter, "There are indeed fewer guests. Before, there were more than 50 salesmen in the store, and now there are only nearly 20 people." According to the reporter’s observation, there were more than 10 salespeople in the store that day. According to reports, this kind of collective store has since opened five stores in Tianhe City, Zhengjia Square and other places in Guangzhou.

"Our store has been open for five years and is the first store of the company. However, the number of people shopping in China Square is indeed decreasing, and they are more willing to go to Tianhe City or Zhengjia Square. " Chen, a native of Guangzhou, works as a senior stylist in a hair salon in the office building of China Plaza.

As an operator who once participated in China Plaza’s investment promotion, Huang Wenjie analyzed that there are two main reasons for the decrease of people flow in China Plaza. With the rise of e-commerce, the functions of other sectors that attract people in the original Lingyuan West Road business circle are weakening, such as Telecom Street, which is no longer prosperous; In addition, after the new trader took over the operation, taste, a supermarket owned by Baijia Group, was introduced to replace the original Jusco, but the size of the supermarket was greatly reduced, and the driving force for passenger flow was also reduced.

Transformation and adjustment are imminent. According to media reports, the current positioning idea of operators in this business circle is to adjust from the most fashionable business circle to the regional life business circle.

According to Xian Jiaxi, senior assistant director of dtz, the business circle of Lingyuan West Road, where China Plaza is located, belongs to Yuexiu District’s "prosperous business circle, but in recent years there have been no surprises and it has remained at the general consumption level". At present, the rent of the shopping center is still high, and the average rent of retail categories on the first to third floors exceeds 1000 yuan/m2/month. It is higher than the adjacent commercial Diwang Square.

Of course, the change of business circle shown by the brand opening path is also closely related to urban development. "In my opinion, it changes with the transformation of urban functions." Zhang Chenhao, senior manager of Savills South China Shop Department, analyzed.

The influx of new businesses

In flower city square, Pearl River New Town, the core CBD of Guangzhou, next to Chow Tai Fook Center, the tallest building in Guangzhou, the supporting complex is in full swing, which is the K11 Art Shopping Center which is expected to open in the middle of this year.

Since the second half of 2016, a number of complex projects have been opened in downtown Guangzhou. After Tianhuan Square, Tianhui Square in Liede and Gaode Land Winter Square near K11 also started trial operation at the end of last year. Tianhe District is also expected to have Tianhe Xintiandi and Man Plaza opened one after another this year.

In particular, the Tianhe Road business circle is adjacent to the Pearl River New Town business circle, and both have high-end commercial complexes, among which more than one operator has positioned the introduction of brands as "entering Guangzhou for the first time". What changes will this bring to the next Guangzhou business circle?

In late February, the reporter walked into Tianhui Square and found that there are still a few shops covered by curtains, and there are no signs of decoration or brand entry. There are still some shops in the Winter Plaza of Gaode Land under renovation. On Saturday, there were fewer people going to it, and only the joint bookstore on the fourth floor had a certain number of passengers.

According to the analysis of dtz Research Department, the stock of high-quality retail properties in Guangzhou’s core business district climbed to 1.725 million square meters at the end of 2016. Affected by new projects entering the market and the adjustment of shopping mall formats, the vacancy rate of high-quality shopping centers in Guangzhou’s core business district increased by 6.8 percentage points from the previous quarter to 14.5%. This vacancy rate is the highest since the first quarter of 2014.

Affected by this, dtz said that the average rent of the first floor of the high-quality shopping center in Guangzhou’s core business district in the transition period was 1,266.6 yuan per square meter per month, down 4.9% from the previous month. This growth rate is also the period of the biggest decline in rent in the same statistical period.

However, it is undeniable that under the environment of the influx of new businesses, the old shopping centers in Tianhe Road business circle are constantly upgrading their business combinations, and it is inevitable that they will form a certain competitive relationship at the investment promotion level.

In Huang Wenjie’s view, this is also a normal phenomenon. "The emergence of new commercial entities will adjust and change the original market structure. Therefore, it is very important to do differentiated operations. "

Under this circumstance, the cultivation cycle of physical commerce has also been lengthened.

Huang Wenjie observed that from the beginning of this century to 2015, the incubation period of shopping centers will take at least three years, but due to the changes in the current market conditions, consumption and commercial volume supply, it will take longer to adjust the maturity period, and he judged that it will take about five years. Xian Jiaxi also agrees that it will take 3-5 years to cultivate commercial projects in Guangzhou.

However, at the investment promotion level, Sui Songwei, the general manager of taikoo hui (Guangzhou) Development Co., Ltd., told reporters that as a member of the Tianhe District Political Consultative Conference, "a few years ago, I promised Lin Daoping, the then district head, that taikoo hui had the responsibility to attract investment, and I deleted the exclusive clause for the investment promotion brand, which did not prevent the brand from entering other commercial entities."

Xie Meng, the president of Tianhe Road Chamber of Commerce in Tianhe District, Guangzhou, and the vice chairman and executive director of Zhengjia Group, told 21st century business herald that the entire Datianhe business circle extending from Tianhe Road to Zhujiang New Town has developed into a differentiated business ecosystem among mature commercial entities. According to its observation, "the brand overlap rate in Tianhe Road business circle is below 30%, but the overlap rate in other business circles is above 50%."

The attack of Tianhe road business circle

From the construction and operation of Tianhe City, the first shopping center in China, to the present, there are various types of commercial bodies along Tianhe Road. Tianhe Road Business Circle is undoubtedly the business circle with the largest market influence and traffic in South China. In the meantime, the adjustment and thinking of major commercial entities in the process of business ratio and portfolio upgrading may be observed as a business sample of a business circle.

From homogeneous competition to differentiated operation, Xie Meng said that the combination mode of business, tourism and culture that Tianhe Road Business Circle is currently exploring is just proposing an attempt direction of shopping center operation.

Huang Wenjie once participated in the operation of Tianhe City Project. According to him, at the beginning of the construction, the domestic understanding of the shopping center has not yet formed, so Tianhe City team invited a Hong Kong architect firm to design the business concept of the project. At the same time, the format combination also refers to the "golden ratio" at the beginning of this century: retail 65%, non-retail 35%.

Soon, the adjacent Zhengjia Plaza opened, but because there was no obvious difference with Tianhe City, it failed to change the shopping habits in the business circle.

Since then, Zhengjia began to creatively introduce non-Guangzhou brand catering enterprises to settle in, and took the lead in introducing children’s formats. After applying for the 4A-level commercial scenic spot in 2011, Zhengjia Polar Aquarium started construction by adjusting some retail and home formats.

According to reports, Zhengjia is currently adjusting some home brands and transforming some logistics areas, and plans to introduce more experience formats such as Natural Museum and Guangfu Cultural Street.

"The future must be competition between cities, and the focus of competition is traffic. And if there is no strong tourism infrastructure, commercial elements, cultural elements, etc., why does traffic come? " Xie Meng analyzed this way.

According to Shi Xiang, general manager of Guangzhou Zhengjia Plaza Management Co., Ltd., "Our initial plan is that by 2018, the proportion of formats will be 30% for experience, 30% for catering and 40% for retail."

"Six years ago, the flow of people in Zhengjia Square was far less than that in Tianhe City, but now the flow of people is obviously balanced." Xian Jiaxi recalled. In Huang Wenjie’s view, the rent growth rate of Zhengjia Plaza is better than Tianhe City.

Since its opening, taikoo hui has continuously adjusted its product portfolio in the project. For the logic, Sui Songwei introduced that it mainly lies in differentiated management, introducing local brands that have never been seen before, bringing freshness; Through the cooperation of formats, most of customers’ needs are solved.

He told reporters that at present, catering accounts for about 30% of taikoo hui’s business mix. As far as the top five categories are concerned, "luxury goods, cosmetics, jewelry and collections are all available." I feel quite healthy and balanced. "

Under the environment of e-commerce shock and conscious continuous adjustment of business combination, the performance of physical retail is inevitably subject to fluctuations.

Looking through the financial report, the reporter found that since the official operation of Guangzhou taikoo hui in 2012, the annual retail sales growth rate from 2013 to the fourth quarter of 2016 was 24.9%, 11%, 16% and 9.9% respectively.

Tianhe City, another commercial body, after excluding the impact of foreign currency settlement, the revenue of Tianhe City Plaza in the third quarter of 2016 came from shopping centers and office building rents, which increased steadily by 2.9% compared with last year. However, in the past six years, this financial data has dropped from 9.4% in 2011 to 0.5% in 2015.

In this regard, Sui Songwei told reporters that it is normal for the market to fluctuate. In the past few years, taikoo hui has achieved a relatively high sales growth, and the base has reached a certain level. In addition to its own operations, the external economic environment will also have an impact. "Since September 2016, we have returned to double-digit growth." According to him, the overall passenger traffic growth in taikoo hui in 2016 increased by more than 30% compared with that in 2015, and the passenger traffic reached a record high on Christmas Eve in 2016.

Sui Songwei bluntly said, "Physical shopping malls should return to the original, and how to treat customers (from the service) so that they will not switch to other places for consumption because of the opening of channels. It is very important to combine online and offline and promote together. "

"The first shopping center in the United States was founded by Mr. Victor Glenn. At the beginning of its construction, it was positioned as a neutral and safe third space. Everyone can communicate freely here, replacing the free space outside work. But the business we are doing now accounts for the vast majority. Don’t forget that the business itself has social communication and emotional interaction functions. " Xie Meng concluded.

(Editor Zhang Weixian)

21 jun

Little friends, have you ever lived in Guangzhou? Do you have similar feelings about the changes in Guangzhou business circle listed in the article? Where do you think the most developed business district in Guangzhou will be in the future? Do you think there will be a dark horse?

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