Shopping styles winnow out some operators, create new ones 30 years on

After operating for nearly three decades in one of Shanghai's busiest business districts, Pacific Department Store Co Ltd is ready to say farewell to its shoppers.

Once a bustling landmark department store in the sprawling city, the store will close its Xuhui district site on Aug 31, with the decision being made as its licensing agreement will expire this year, said an announcement by the department store.

"I've made a lot of memorable purchases at the department store, which was once my favorite shopping destination back in the early 2000s," said Li Yu, a white-collar worker in her forties. Though sad about the loss of the store, Li admitted it's been years since she last visited the store.

Once regarded as a shopping icon among locals, the old-fashioned department store gradually lost its sheen when new shopping malls mushroomed in recent years. Its closure reflects the city's ever-changing commercial sector, experts said.

Under Taiwan's Far Eastern Group, Pacific Department Store entered the retail market on the Chinese mainland in 1993. It operated 12 branches in cities including Beijing, Chongqing, Chengdu of Sichuan province and Dalian of Liaoning province in its heyday, including three in Shanghai. But the other two stores in the city were closed in 2016 and 2020.

Qi Xiaozhai, vice-chairman of the Commerce Economy Association of China, said the closure of Pacific Department Store is more than the expiration of a collaboration agreement.

Along with rapid economic development, consumers' habits and preferences are evolving quickly, and some old-style department stores have failed to adapt to the new changes, Qi said.

"If we look back on past days, we can find similar stories like that of Pacific Department Store always being repeated. The only solution to stay competitive in the retail market is to constantly adapt to consumers' new needs," Qi added.

There used to be four classic city-level shopping districts in Shanghai — Nanjing Road, Huaihai Road, Sichuan Road and Shanghai Yuyuan Tourist Mart. Along with the urban development of the city, such districts doubled to eight in the 1990s.

During the 1990s, a handful of overseas-funded department stores including Pacific Department Store were introduced into the city as a brand new commercial model. They soon dominated the retail market with fashionable goods and modern marketing strategies.

But as Shanghai's city-level business/shopping/commercial districts expanded to 29, including both downtown and suburban areas, stereotypical department stores began losing ground to the thriving e-commerce sector and innovative new malls, which are full of internet sensation brands, debut stores, food and beverage choices, and entertainment facilities, Qi said.

While Pacific Department Store braces to close shop for good, its neighbor — Shanghai Sixth Department Store — has taken a different strategy by spending 798 million yuan ($109.4 million) during an overhaul, according to the local Xinmin Evening News.

The retailers' different responses reflect how Shanghai's commercial districts are evolving as the city transforms into an international consumption hub.

"Changes" should always be the keyword for any retail business hoping to retain its appeal. A shopping mall that stays unchanged for 20 years is typically doomed to fade away, said Yang Yuechen, head of research and consultancy for Shanghai and Beijing sites at real estate consultancy Knight Frank.

Yang said various districts in the city have striven to follow the latest consumption trends, tapping into the preferences of young generations by introducing a variety of consumption experiences including playing Counter-Strike, VR games, mini theaters, live bands as well as cultural and art exhibitions.

Apart from Pacific Department Store and Shanghai Sixth Department Store, Xuhui district will continuously promote overall renewal by introducing Chinese fashion brands as well as supporting the development of the nighttime economy, said Cao Liqiang, Party secretary of the district, during a news conference in late July.

Cao said the district has in the past two years developed a series of landmark projects including the mega commercial complex ITC, a sky bridge linking major facilities in the area, and Zikawei Library.