By WU Rong, ZHANG Xiaoyi
The difference in foot traffic between the basement of shopping malls and the upper floors is becoming increasingly apparent. Young people boast on social media of never ascending beyond the second floor. Some claim to have not visited dusty upper floors for years.
Life underground
Traditionally, developers have been locked in a vicious cycle regarding basements. Viewed as dark and uninviting, basement rents are low, attracting low-rent companies and adding to a lack of pizzazz underground.
Downstairs it’s all about junky knickknacks, fast food, claw machines, bubble tea and bakeries - small stores where customers stay for short periods, often spending as little as possible.
“In general, we position flagship brands on the first floor, women’s clothing on the second, men’s and children’s on the third, and dining on the fourth and fifth floors. The basement becomes a gathering place for high-frequency, low-average-transaction-value categories,” said a mall leasing manager.
Changing habits
Nielsen IQ China’s July survey data revealed that 43 percent of Chinese plan to control their overall spending, and 37 percent will seek cheaper alternatives whenever they can.
Rather than saying the basement is thriving, it is more accurate to say that other floors are struggling.
Those second and third floor products are now bought online. And the pandemic changed dining habits.
Killing the golden goose
The popularity of the basement has made these spaces highly sought after. So rents are on the rise by at least 20 percent. Rents are up, even though it is clear that the problems of third-floor sellers will not be reduced by a move downstairs. But if people can’t find what they seek in basements, now cluttered with designer handbags, they will go elsewhere.
In some malls, the value of the basement level has risen above the ground level. Many vacant upper-level space receives little attention, while vacant positions on the basement floor often attract inquiries.
