Chengdu Retail: The Land of Abundance

Chengdu is not only one of the fastest growing retail markets in China but also in the whole world. As the developed markets continue to provide uncertainty for retailers, Chengdu offers brands 10 million+ fashion-conscious urban consumers with newfound disposable income to blow. Retail sales have increased more than 10% year-on-year for the past ten years. Retailers from LV to H&M to IKEA post some of their best performances in all of China in their Chengdu stores and as far as we are concerned Chengdu is just getting started.

Retail in Chengdu

Retail in Chengdu has evolved at breakneck speed. Chengdu natives can reminisce about the times when foreign fashion brands were offered in but a few department stores around town. In 2010 the Galleria, Chengdu’s first independent, Western-style shopping mall shook perceptions that Chengdu shoppers were stuck in the past. Then it was off to the races as retail space in the city has since exploded like a plate of Kungpao chicken.

In 2016 Chengdu’s local government implemented its new strategy ‘to build an international influential shopping paradise action plan’. The local government aims in cooperation with industrial and enterprise associations to improve the city’s overall shopping environment.

For brands new to the Chengdu market that may be a bit overwhelming. That is why it is important to focus on the key trading zones. Chengdu’s main retail areas focus around three core locations: Chunxi Road, South Renmin Road, and Xinnan Tiandi.


Chunxi Road

Chunxi Road is like Shanghai’s Nanjing Road, it offers a high street shopping experience to locals and tourists alike. Originally anchored by department stores at each corner, the area’s retail space more than doubled with the opening of Wharf’s International Financial Square (IFS) in January 2014. This massive mixed use project with more than 200,000 square meters of shiny white marbled shopping space opened in January with the installation of famous artist Lawrence Argent’s giant suspended panda. Wharf’s landmark development aimed at designing a ‘City within a city’. In addition, it also has massive flagship stores from LV, Prada, Dolce&Gabbana, Salvatore Ferregamo, Valentino, Armani, and Lane Crawford. High-end brands, such as Chanel, Burberry, Christian Louboutin or Dior entered Chengdu’s retail market for the first time. Chengdu luxury shopping just got raised to a whole new level.


In April 2015 Chengdu’s new retail hub Sino-Ocean Taikoo Li was officially opened. The same developer and longtime operator of Beijing’s popular Sanlitun Village and TaiKoo Hui in Guangzhou, Swire’s extensive China retail expertise developed a fantastic new mix of international fashion and F&B options for Chengdu. Taikoo Li is based on a fast lane and slow lane retail concept and offers more than 300 retail outlets and restaurants on a floor area over 114,000 sq meters. Taikoo Li’s design rests on traditional Sichuan architecture. Prime retail brands such as Apple, Gucci, Cartier or Hermes opened huge stores in Taikoo Li area. Taikoo Li also includes a boutique hotel. The project certainly proves popular by preserving the past and presenting the future to the proud culture of Southwest China. More and more international retailers are seeking quality retail space in tier-II city growth markets and Chunxi Road is the safest bet.

South Renmin Road

Renmin Road serves as the main artery of the city running north to south. Some of Chengdu’s high-end retail projects provide eye candy for thousands of people who pass through this important corridor everyday.

Yanlord Landmark is difficult to miss with its massive LV-clad façade. The project has been Chengdu’s go to spot for a personalized shopping experience targeting Chengdu’s wealthy. Valet parking, VIP viewing rooms, and attached to the Frasier Suits are just a few perks of this lower foot traffic, higher purchasing power collection of luxury flagship stores. Many of Yanlord Landmark’s retailers like LV, Burberry, and Prada are choosing Wharf IFS on Chunxi Road for their second Chengdu locations.

Just across the way, Maison Mode spans the retail podium of two rundown office towers. Shoppers don’t seem to mind, however, as they go back and forth between Gucci and Tiffany & Co. and stop at Ralph Lauren in the middle. While this project will face increasing pressure from newer shopping centers, its positioning is primly located on South Renmin Road just south of Tianfu Square.


Raffles City is CapitaLand’s mixed-use project targeting a younger, fast fashion crowd on South Renmin Road. The retail component spans the entire footprint of the two office towers, two apartment towers, and one tower reserved for hotel use. Anchored by fast-fashion juggernauts H&M and Gap, it also provides a great selection in denim: Armani Exchange, Levi’s, GStar, Replay, Calvin Klein Jeans, Guess, and Selected. Raffles City has become a hangout spot for many of the city’s 20-something-year-olds on the weekend.

South Renmin Road functions as one of the primary commercial centers for the city. Without dense residential complexes in the vicinity, retail projects here depend on high profile location that attracts drivers and commuters on Subway Line 1.

Xinnan Tiandi

In less than 10 years the Xinnan (New South) Tiandi Retail Area has emerged as one of Chengdu’s most successful retail catchments. To understand the rise of this area look no further than the government’s concerted effort to double the footprint of the city to the south. The new area is called Tianfu New City and Xinnan Tiandi was the first area to develop in the new High-Tech Zone district.

Home to IKEA since 2006, Chengdu’s first European-style shopping mall Galleria (Kaide) (2010), French hypermarket Auchan, furniture and home furnishings mega-malls, and Decathlon sports store, Xinnan Retail Area is a place that attracts the young families and new wealth from all parts of the city. The IKEA is among the best performing in all of China and draws people from all parts of the city and the province as the area’s steady anchor. The Galleria (Kaide) mall remains a high-performing center of foreign fashion teeming with younger shoppers all days of the week.

Transportation connectivity will carry the Xinnan Tiandi Retail Area into its next phase of development. It is neatly wedged between some of Chengdu’s most important road arteries: 3rd Ring Road, Renmin Road/Tianfu Road, and Airport Expressway. Already connected to subway line 1 and a major bus depot, the area will also see the new South Train Station open soon with another subway line intersecting at the expanded station. Increased connectivity guarantees a steady flow of consumers who can easily spend an entire day perusing Xinnan Tiandi shopping offerings.

Chengdu’s younger wealth has moved to South Chengdu. Shopping mall developers have moved into Xinnan Tiandi to attract them with more variety than currently available. CapitaLand has opened their Tianfu project in December 2014 with a total retail area of 141,500 sq m. Across the way is the Southern Center that adds another retail podium while the Sunning Plaza is undergoing a renovation and repositioning. It will be interesting to see how shoppers respond to so many projects vying for their attention. CapitalMall Tianfu and Southern Center instead target affordable luxury crowds while Sunning Plaza operate more like a department store.

Other Submarkets and Projects

The MixC shopping mall opened in 2012 and represents the maturing Chengdu consumer. Home to Southwest China’s first Apple Store, MixC has helped convince the middle class they can afford to occasionally splurge on themselves. Always in search for the latest fashion, good restaurants, and stimulating entertainment, the average Chengdu native strives for a comfortable life.

Early shopping mall entrants Wanda Plaza (2007) and Galleria (2010) found success in Chengdu by introducing international brands and a new shopping concept. As new shopping mall developers push further from the city centers, however, they will have to be more creative in offering alternative entertainment options to draw in the growing middle-class. One example is Joy City that adds an amusement park feel to its sprawling shopping center located outside downtown along the 3rd ring road in the southwest. Throughout 2017, more than 22 new shopping malls will open for business and increase Chengdu’s overall retail stock by 1,700,000 sq m.

Disposable Income

In order to understand the rapidly expanding retail market in Chengdu one must take a look at the disposable income levels in the city. Disposable income attempts to separate a consumer’s spending habits on things that they need, like food and shelter, from things they could perhaps live without, like a second Prada bag or Rolex timepiece. As expected, Chengdu’s disposable income is increasing with the city’s GDP at an encouraging pace for retailers.

Year RMB Growth Rate
2016 35,902 7,2%
2015 33,476 2,4%
2014 32,665 8,9%
2013 29,968 10,2%
2012 27,194 13,6%
2011 23,932 14,9%
2010 20,829 11,6%

During the past years, Chengdu people’s disposable income increased constantly on a high level. In 2016, Chengdu people earned on average RMB 35,902 per year. While RMB 35,902 may not appear too impressive at first, Chengdu people continue to prove their willingness to spend higher percentages of their disposable income on fashion, accessories, and dining out compared to their more practical counterparts in Beijing and Shanghai.

Chengdu people have never had trouble with the idea of work-life balance. Subdued by overcast, humid weather and surrounded by the ‘Land of Abundance’ as Sichuan is often called, Chengdu people have been spending guilt-free days playing Mahjong and sipping tea for generations. As Chengdu gets shoved to the forefront of China’s development initiatives, the emphasis to enjoy life engrained in the culture has now spilled over into some of the highest levels of consumption in the country. Chengdu shoppers consistently site the need to impress or wanting to look good for others as primary reasons for buying. A shopper in Shanghai may only buy when they want something. The Chengdu psyche leaves them much more prone to conspicuous consumption.

Retail Trends

Fast fashion retailers Zara, H&M, C&A, Gap, and Uniqlo have been expanding rapidly since they all opened their first stores in the Galleria in 2010. Now there are nearly 50 stores in Chengdu. These massive retail groups are also bringing in their other brands including a growing trend in higher-end home products. Zara Home, H&M Home, Muji, and a second IKEA store all hope to capture a piece of Chengdu’s growing wealth as it matures from outward projection to comfort and style at home.


Luxury retailers seeking growth continue to target Chengdu as competition and operating costs eat into profits in China’s coastal city markets. Gucci and Cartier already have multiple locations in Chengdu and LV is a fortnight away from opening its second 2,000 square meter store in Chengdu. Valentino has made up for arriving late with two flagship stores opening within months of each other at Yanlord Landmark and Wharf IFS. Finally, Lane Crawford offers a fantastic selection in its multi-brand store for retailers not willing to take big risks in capital for their own space.

Additionally, retail development projects concentrate more and more on outlets malls. An example for this trend is the Newcore City Mall, which is located on Jianshe Road. Newcore City Mall was launched in October 2016 and targets customers who seek for high discounts. Brands such as UGG, Adidas and Nike opened their first outlet retail stores in the city.

Supply and Demand

The increasing retail supply in Chengdu raises concerns that the market has gotten ahead of itself. Upon closer examination, however, the majority of added retail space is outside of prime retail markets. The build up of retail supply is also includes Carrefour, Ito Yakado, and other ‘neighborhood’ hypermarkets and department stores targeting specific residential areas. This can skew the supply statistics for fashion retailers.


Traditional shopping malls that venture beyond the boundaries of the third ring highway will have a tough road ahead of them. Where at one time it was enough to have an H&M or Uniqlo anchor to draw in foot traffic to the smaller retailers, Chengdu’s shoppers now are seeking more. For international fashion and a more exciting mix of brand offerings, Chengdu people prefer to travel downtown.

Further proof that prime retail is unaffected by the massive build up is provided by average rents which have increased in sought after projects in all three prime retail areas. This shows the market is split between prime and secondary submarkets and a glance at citywide averages can be misleading. It is still the case that prime locations on Chunxi Road will rival some of the most expensive retail markets in the world at up to RMB 50/sq.m/day.


As attractive as the Chengdu retail market is many challenges still present themselves to international retailers who wish to tap into this growth market.For one, lack of regulatory clarity can present themselves to retailers new to Chengdu and China. Issues include what district a retailer should set up their legal entity in, what structure a retail entity should be, any limitations on business scope, contract negotiation with landlord, construction sourcing, passing code and construction inspections, outdoor façade and signage code, and banking/financial restrictions. Navigating the government’s involvement in business in China is an adjustment at first for foreign companies. Tier II markets don’t have the best reputations for ease of doing business but are improving in their push to internationalize. An often-cited problem voiced by organizations inside and outside of retail is the challenge of finding and retaining quality skilled employees in tier II China. Before the development started to ramp up in Chengdu and other tier II cities, China’s brightest headed for the coast for the best opportunities. Now that the local economy is expanding at double digits in Chengdu, the pressure is on employers to design a work environment and incentive structure that attracts the best. Specific to retail is the difficulty in keeping up with the changing tastes of Chinese consumers. Tier I markets have already proven that they are not as susceptible to audacious advertising campaigns promising the handsome guy or pretty girl that accompanies a purchase of their brand. Chinese shoppers will increasingly require social proof and special interactions with brands before considering a purchase. While Chengdu culture promotes a more conspicuous shopper, it is hard to say if or when they too will start asking, “why should I buy your brand?”

Are you interested in learning more about the Chengdu retail market and Maxxelli Consulting services? Send us an email to find out more.

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