Chongqing: Southwestern China’s Retail Hot Spot

Chongqing, also known as ‘The Gateway to Western China’, stands out as one of the most exciting areas for potential retail development. With a massive consumer base, and a constantly expanding urban population, around 9 million, consumption rates are increasing year-upon-year, making the city highly attractive for foreign investment. The retail market of Chongqing is one that defines the typical trends of China – fast moving consumable goods and fast-fashion retailers have flourished, while luxury fashion brands have been slow to enter and dominate the market. This offers investors a unique opportunity to take advantage of a large, fashion-conscious consumer base that is used to the affordable prices of H&M and Zara, in contrast to the usual brand orientated nouveau riche of China’s first-tier cities. Therefore, Chongqing offers huge potential for further development of the luxury goods market, as well as the, almost guaranteed success of new, affordable brands onto the scene.


Chongqing is highly important to the formation of the Chinese psyche due to the role that the city played during the Second Sino-Japanese War of 1937. In fact, even today, Chongqing is still known as ‘The City of Heroes.’ After the Japanese captured Nanjing, Chongqing became the provisional war-time capital. Many factories and universities were relocated inland from the east and the city was transformed to an industrialised centre. Because of its wartime development, Chongqing became the largest city in Sichuan province. Over the last twenty years, Chongqing’s population has grown to a massive 33 million, of which 9 million actually live within the urban area. Chongqing city’s population is expected to be over 10 million by 2025, and its overall population between 35-40 million. Due to Chongqing’s increasing population, the retail market will also have to provide for a massive increase in consumer demand. In terms of economic growth, Chongqing belongs to China’s fastest developing cities.

Chengdu vs. Chongqing

With the aim to rapidly advance the development of China’s western regions, Chongqing was separated from Sichuan province and declared by the central government to the fourth directly-controlled municipality in 1997. Since then, the city has escalated its healthy rivalry with Chengdu, the capital of Sichuan who, despite being half-the-size of Chongqing, has become highly internationalised in recent years. Nevertheless, Chongqing, as a directly controlled municipality, has a distinct advantage over Chengdu; securing funding from the central government for infrastructure development is far more difficult for Chengdu. Despite Chongqing slightly trailing Chengdu, the city’s planned expansion as one of the most important commercial hubs of Southwest China will allow Chongqing to catch up with its brother in Sichuan.

The pandas aren’t in too much of a rush in Chengdu. Neither are the people. Everything is laid back. Source:

Culturally speaking, many observers like to analyse the overall feeling of the two cities when comparing them. Chengdu is usually described as very laid-back and Chongqing as hectic, but fun., for example, writes that ‘Chengdu is the fat provincial nobleman to Chongqing’s beer and hotpot steel worker!’


The Retail Market in Chongqing

Of the current 9 million registered urban residents, the average disposable income per annum was RMB 29,610 in 2016, which was RMB 5,789 more than the national average. However, the city has seen a year-on-year rise of 8.7 % in disposable income last year. This number is one of most important indicators for the retail market—the consumption power largely decides the market demand. Local demand for international retail products has grown rapidly since the introduction of the Western style department stores into the market in 1997. By 2015, Chongqing’s total retail stock had reached approximately 4.5 million sq m, this is higher than the first tier cities of Shenzhen and Guangzhou and is likely to continue rising as the urbanisation of Chongqing’s massive population proceeds. Along with the incredible growth of Chongqing’s retail stock, total retail sales grew by an average of 13%, per year, making the city’s retail market one of the top performers in the country.

Due to strong local demand for shopping malls, the number of shopping malls exploded in recent years. Particularly during the last two years, several large-scale malls were built in Chongqing’s emerging retail areas. One example is, Hongkong Land’s Landmark Riverside Park which was officially opened in Q3 2016 added 120.000 sq m to Chongqing’s overall retail stock. The Landmark Riverside Park hosts Southwestern China’s first Madame Tussauds, but also a Sea Life Aquarium.

Consumer interest in Chongqing was first driven by the introduction of affordable fast-fashion retailers, such as H&M, ZARA and UNIQLO. The success of these brands has driven Chongqing’s internationalisation and produced a large fashion-conscious consumer base across a wide socio-economic spectrum. As with the rest of China, Chongqingers are highly interested in international luxury brands. However, until recent years, there was very little opportunity to purchase them. Now, more and more luxury brands are taking advantage of the hole in Chongqing’s market such as Tiffany & Co., Burberry and Prada. These companies are able to take advantage of Chongqing’s rapid infrastructure development that has actually provided an excess of retail space – a commodity fiercely fought over in first-tier cities! These retail spaces are provided with cheap rental rates in both prime and developing retail areas.

In 2016, the communication equipment sales showed the highest growth rate and emphasized a strong consumer demand. Also important to take into account is the growth of big-box retailers, such as Tesco, Carrefour, Walmart and IKEA. Chongqing has one of the highest concentration of these stores among the 50 fastest growing cities in China. The success of large big-box stores, as with the success of fast-fashion retailers, suggest that Chongqingers are highly attracted to products and commodities, of good quality, sold at a fair market price.

As a retail and wholesale centre of Southwestern China, Chongqing offers various shopping districts. An analysis of Chongqing’s major shopping areas further demonstrates the planned growth of luxury retailers, as well as highlighting the continued success of fast-fashion brands:


Jiefangbei, of the Yuzhong District, is not only Chongqing’s commercial and financial centre, it also is its most modern area. The central shopping square, built in 1997, is very popular among tourists and locals and attracts more than 300,000 visitors a day. Surrounding the square, there are several shopping centres and malls, as well as more than 3000 stores of various kinds. Jiefangbei also receives a lot of visitors due to its rich cultural heritage sites including the People’s Liberation Monument and the War Victory Stele. To support this interest, Jiefangbei has developed a high concentration of international hotels and luxury apartments, in keeping with the affluent feel of the general area.

In recent years, Jiefangbei has become the main target zone for luxury brands attempting to enter the Chongqing market. The nine-storey World Financial Center (WFC), is possibly one of the most high-end shopping centres in Southwest China. With a retail space of 37,400 sq m, it hosts a large number of luxury brands including Prada, Miu Miu, Hermès, YSL and Givenchy. Times Square Mall is another example of a highly successful international shopping centre in Jiefangbei; Ralph Lauren and Emporio Armani have both opened flagship stores here and are doing extremely well.

Jiefangbei is one of the most successful shopping areas in Chongqing and continues to grow. However, as the area becomes more synonymous with luxury brands, other areas of the city have grown in popularity through appealing to a wider socio-economic range of consumers.


Chongqing’s Jiangbei district is located in the north bank of the Yangtze River and Jialing River and hosts Longfor’s North Paradise Walk, one of Chongqing’s latest emerging retail hotspots. North Paradise Walk offers on a GFA (Gross Floor Area) of 140,000 sq m mid- to high-end retail products. Fast fashion retails such as H&M, Mango and Vero Moda are tenants, but also Armani Jeans and DKNY have stores there.



Guanyinqiao, a sub district of Jiangbei, is Chongqing’s most popular shopping area, accounting for over 40% of the city’s total GFA. Much of Guanyinqiao’s success can be attributed to the fact that it targets the average Chongqing consumer, focusing on affordable international fashion brands, like H&M, UNIQLO and ZARA, instead of the luxury fashion offered by Jiefangbei. Big box retailers are also important with Lotte Mart, Wal Mart and Carrefour being a common sight throughout the area.

While expanding its already successful business model of low-mid range goods, Guanyinqiao is also expanding the presence of luxury brands within the area. For example, in the Starlight Place Mall are over 250 local and international brands resident on a retail space of 135,000 sq m. Massimo Dutti, Max & Co., Anna Tosani are only a few examples for brands that offer customers a high-end shopping experience.


Yangjiaping, a sub district of Jiulongpo, is located at the west part of Chongqing and is also a very popular shopping destination among locals and tourists. Longfor’s Paradise Walk is located here and attracts young and trendy shoppers with a retail space of 170,000 sq m. Brands such as Tommy Hilfiger, Only, Vero Moda have stores in the Paradise Walk. But also MixC Mall is located in Yangjiaping and has the approach to leading a new life style by advocating new international shopping ideas on a GFA of 100,000 sq m.

Challenges faced by the Chongqing Retail Market

Retail Rental Price

Chongqing’s retail rental price constantly continues to increase but remains low, making their market highly attractive to foreign investors. Prime shopping mall rents rose only by 0.3% in 2016, averaging just RMB 23.8 per sq m per day. In comparison. Shanghai average retail rental price per sq m per day was RMB 50.2 in the same year, more than 47% higher. In order to keep the rental rates low, and further attracting foreign investment in the city, Chongqing must continue to develop non-prime and emerging retail areas. However, this brings about a delicate balancing act between keeping down vacancy rates and maintaining competitive rental prices. Although, it must be acknowledged that both these issues will be helped by Chongqing’s continuing urbanisation of its outlying areas.

Vacancy Rates

Despite a continued rise in retail sales, there is a concern that Chongqing’s retail supply is outpacing its demand. Due to the fact that online shopping gets more and more popular in China, traditional retail outlets lose customers to e-commerce and are faced with increasing competition. As a consequence, many department stores have repositioned themselves or closed. A reason why the city-wide prime shopping mall vacancy increased in Q3 2016 by 2.3 % to 6.5%. But also prime retail areas showed an increase in vacancies by 0.7% to 5.7%. Vacancy in non-prime retail areas even increased by 4.2 % to 7.4%.

Staying Competitive

While Chongqing is highly welcoming to new and existing retailers, as the market becomes more developed, companies must employ strategies to stand out in competitive areas. Across malls brands are largely homogenised, thus, in order to stay competitive, many shopping centres see the introduction of new and different brands as an effective way to attract consumers. Furthermore, to compete with increasing e-commerce, malls reposition themselves as entertainment shopping mall. One example for this phenomenon is Longfor’s newest Time Paradise Walk that opened in 2016. Through the introduction of creative entertainment retailers, Longfor tries to attract young customers and not lose its customer base to online shops.

Mass Urbanisation

Since 2008 Chongqing functions as area for piloting urban and rural reforms. Chongqing’s ambitious plan to urbanise an additional 14 million people by 2020 will undoubtedly make its retail market more attractive to investors. The sheer scale of Chongqing’s potential consumer base would be unimaginable! While it is likely that the younger generation will have little difficulty adapting to a spending-based economy, the government must ensure that adequate education and encouragement is employed to also get older generations spending. It would be disastrous for Chongqing’s economy if consumer demand fails to keep up with retail supply.

Looking Ahead

Chongqing’s retail market offers a unique opportunity to those looking to invest in China. The city has one of the world’s largest consumer markets – already fashion-conscious and excited by the prospect of more luxury brands. While affordable fashion retailers have led the way in opening the market to international companies, the massive growth in the jewellery sector and the continued success of luxury brands suggest that more upscale retailers would easily be absorbed by the market. The city’s continuing development of its infrastructure and retail space in non-prime and emerging areas is serving to keep rental prices down for retailers in these areas.

Since shopping malls are facing more and more competition from e-commerce, they have to adapt to changes in customer behaviour. This is why shopping malls are expected to redefine themselves as entertainment experience and focus more on the needs of families and young adults.

Furthermore, Singaporean Capital Land Group’s latest and biggest investment in China (RMB 21.0 bn), Chongqing’s new Raffles City will put Chongqing’s retail landscape to a new stage. Raffles City is scheduled to open in 2018 and is situated between Chaotianmen Square and Jiefangbei, offering a GFA of 817,000 sq m.

In short, ‘the gateway to western China’ continues to open, greeting visitors with a highly hospitable retail environment!

Leave a Reply

Address :

Subscribe to our Newsletters

* indicates required