Table of ContentsIntroductionFirst Tier Outlet IssuesSecond and Third Tier Outlet IssuesSolutionConclusionIntroductionWith 1.3 billion people, China was a market massive for its local retailers. And in recent decades of openness and internationalization, the country is facing a new constellation of consumption patterns, living standards and shopping tastes, posing more challenges than ever for retail. . Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Before 2002, the media was not popular at all in China until it first moved to Beijing in 2002. Since then, the number of factory outlets has sharply increased in China. The opening of factory outlets began in major cities such as Beijing, Shanghai and Guangzhou, and then spread to second or third tier cities such as Chengdu, Wuhan, Suzhou and Qingdao over the years. The number of outlets in second-tier cities now accounts for the majority of the total number of outlets in China. POS markets are facing fierce challenges in the shadow of e-commerce, many online retailers such as JD.com and Alibaba Group are offering discounted luxury products, some even offer free shipping in around the world, prompting many Chinese consumers to purchase luxury goods online. It is believed that sales markets can no longer rely on low prices as the sole commercial strategy. In fact, it becomes crucial for outlet developers to recreate new strategies and be proactive in engaging shoppers, right from store design to management and promotions. Given the low cost of land, the majority of sales outlets are located in the suburban area. They are strategically positioned near airports, theme parks or scenic spots. Most are designed in a semi-open and spacious space, serving primarily middle-income and price-sensitive buyers. Some successful outlets engage their consumers by bringing them a cultural taste through their architectural design, such as Florentia Village, some include various facilities such as a children's play area, fountains and a wide range of dining choices . Outlets in Japan, the United States and Europe have already entered a mature market, with the United States having more than 200 outlets nationwide and more than 160 shopping malls in Europe. In Japan, local fashion brands and limited-release luxury products attract many tourists and young people to shop at outlets every year. In China, many of the successful outlets are developed by multinational developers and local conglomerates such as RDM, Bailian. and Capital Grand, where they have an experienced management team and developers. However, China's outlet market is not yet fully developed, and many second- and third-tier cities are waiting for outlets to come on the market. China can learn from examples of successful foreign outlets to see how it can be applied to its local market. Problems of first-tier outlets There are many successful outlets operating in cities such as Beijing, Shanghai and Tianjin, given the government's favorable urban development policies in the cities. The Shanghai Outlet Plaza located in Qingpu, Shanghai is one ofCBD projects of the government, which has now become a well-known outlet among locals and tourists. Outlets located in first-tier cities enjoy the advantage of attracting middle- and high-income consumers and tourists. But on the other hand, these factory outlets face fierce competition from major cities around the world, including Japan, Hong Kong and the United States, given their prices and that the country's currency can become more competitive than that of China. expensive these days, consumers who can afford to travel will instead purchase luxury goods from foreign countries, given the best deals and the widest range of brands and product choices. Another popular option among consumers is "Daigou", which has become very common in China in recent years, where a foreign personal shopper purchases on behalf of consumers at outlets in foreign countries. There is no doubt that top-tier luxury brands are the main attraction for consumers to visit retail outlets. Many luxury brands tend to value a long-term relationship with a specific outlet developer, such as Prada, Bottega Veneta, Fendi and Bvlgari's relationship with RDM. These international brands also place restrictions on the distance between their main retail stores and factory outlets, meaning that factory outlets cannot be built close to the city level where their outlet store was located. detail. Similarly, in China, the established ratio of retail stores and outlets is four to one in a city. This has made competition in tenant outlet markets even more competitive. Some developers will entice these brands to set up outlet stores in their mall by offering free rent or even free renovation fees to attract consumers and the entry of other brands. Problems of 2nd and 3rd tier outlets The government's opening and support plan in 2nd and 3rd tier cities is crucial to outlet developers, as economic infrastructure forms the basis of support for the tier sector. retail, especially for shopping centers located in suburban areas. The government initiative - Greater Bay Area aims to bring the southern part closer to cities for commerce and trade and increase the number of consumers and visitors to the region. With the Hong Kong-Zhuhai-Macao Bridge and express rail link, transportation routes and commuting between cities will become easier. Consumers in second- and third-tier cities are mainly composed of low- and middle-income groups. This consumer group is more attracted to leisure products such as sports brands and mid-priced clothing. Thus, brands such as Nike, Adidas, Gap and Converse have become more prevalent than top-tier luxury brands in the market. Noting the success and popularity of malls, some developers are trying to get a piece of the action by expanding into outlet stores; while others see the POS concept as a solution to reposition their position in the retail market, especially those struggling with the performance of existing shopping centers have attempted to adopt the same model as that of points of sale in mature markets. Yet many of these developers attempted to fail due to lack of experience in running a POS business. With unregulated store management, some tenants sell products