INTRODUCTION. Luca Bastagli Ferrari, the CEO of Arcoretail, is one of Italy’s foremost experts on fashion and retail. Before joining Arcoretail he held various senior positions in the fashion industry, serving as CEO of Fashion District and of Camera Nazionale della Moda Italiana, the not-for-profit association which monitors, coordinates and promotes the development of the Italian fashion industry.
Arcoretail is a subsidiary of Arcotecnica Group, an Italian company specialised in consultancy and turnkey services for the real estate sector. Its mission is to devise and develop innovative projects with a blend of fashion, design, hospitality, sport and cultural attractions, all with an Italian flavour.
Arcoretail has been selected as consultant for Jihua Park, an ambitious scheme to create 35 new retail, sport and leisure resorts across China. The scheme is designed to drive domestic tourism (and retail consumption) within China and each resort will offer a number of commercial opportunities for brands and retailers. At TFWA’s recent China’s Century conference in Shanghai, Luca Bastagli Ferrari (pictured below with TFWA’s John Rimmer) outlined the ambition and scale that underpins the project.
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CHINA. “The project is intended to revolutionise the whole travel retail sector.” Arcoretail CEO Luca Bastagli Ferrari doesn’t hold back his words when he talks about the development of Jihua Park, one of China’s most ambitious and exciting leisure developments.
The project is a response to rampant growth of Chinese domestic tourism – and (as noted on these pages many times) strong government encouragement of that trend. As the country’s middle to upper class grows (it’s expected to reach over 400 million in 2020), a major change in lifestyle attitudes is emerging, Bastagli Ferrari says, one directed towards shopping, sport and travelling. Mass tourism too is on the rise within China.
Combine those factors and you have the recipe for a profoundly important new dynamic within the Chinese economy over the next decade, Bastagli Ferrari contends. Jihua Park is a specific reaction to the changes, and an effort to create a “real touristic destination”, he notes.
The various Jihua Parks (some 35 are anticipated) will be sited in a cross-section of metropolitan locations, the move underpinned by recent central government policy to increase domestic market consumption by Chinese travellers. Locations will be chosen based on analysis of socio-economic growth trends. Areas showing a strong growth in fashion buying and domestic tourism, for example, would be prime candidates for a Jihua Park.
Shopping (40% of the parks’ offer), sport and entertainment (30%), food & beverage (15%), and relaxation (15%) will be the anchors of the facilities.
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High-end retail lies at the heart of the Jihua Park concept |
The first Jihua Parks, launched as a concept last May, will open in the cities of Chongqing in Southwest China and Changchun, the capital city of Jilin province in the northeast with a targeted 3 to 4 million annual visitors. Chongqing Jihua Park will be the first, with a likely debut in the third quarter this year. Parks in Yangzhong and Dongguan will follow.
“The centers will be unique attractions where it will be possible to have really unique experiences,” Bastagli Ferrari says. The Jihua Parks are integrated tourist attractions in which the shopping experience is combined with innovative sports activities, hotels, international-quality catering and leisure facilities such as spas.
The parks’ “˜Shopping Hubs’ will offer a range of fashion, designer and luxury brands of the kind usually associated with high-end international travel retail stores.
The “˜Sports Hub’ will have areas dedicated to indoor & outdoor sports and other entertainment, including water parks, skydiving, wave houses, climbing, indoor amusement parks, Formula 1 simulators, 7D cinemas and others. Walltopia, Wavehouse, Skyventure I-Fly are among the international providers bringing their attractions to Jihua Parks.
But it’s not just about retail. The spectacular Climbing Gym, covering more than 1,000sq m of space, will be one of China’s largest indoor climbing gyms. “˜Rollglider’ will offer visitors an experience similar to flying: every customer will be fixed to a “˜cart’, which will run attached to a suspended rail. Once secured, the cart can leave the starting platform and fly, gaining speed with the gravitational force, giving the user a stunning view of the whole Destination Center.
The operators will work closely with major Chinese tour operators to promote the parks and are confident that each of the 35 planned facilities will attract 3 to 4 million visitors annually.
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Travel retail in a new guise: Arcoreta hopes to convince international brands of the merits of a new shopping channel |
ATTTRACTING ITALIAN AND FRENCH BRANDS
On the retail front, Jihua Group is developing an innovative platform for partnerships with small to medium enterprises (SMEs), particularly those from Europe, especially ones bearing “˜Made in Italy’ and ‘Made in France’ tags. The concept offers what the developers describe as a unique low-cost opportunity to enter the Chinese market alongside a major state enterprise.
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The platform, based on business models already implemented in Europe and North America, offers a wide range of services to companies wishing to develop retail networks in China. It guarantees the brands autonomous management of the stores, without the need to create their own local infrastructure.
Fully customisable, the service allows each company to decide how many stores to open, which locations to choose, and which services to utilise.
Arcoretail says that the average brand investment will be around one-fifth of that usually necessary to launch independently in China. All the while, Italian an European SMEs (embracing fashion, food, design and other sectors) will be underpinned by the support from Jihua.
The ‘Jihua Service Platform’ will provide a dedicated team for all partner companies, offering assistance across all phases of the business – from the selection of goods and definition of prices to research and personnel management.
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From shopping to leisure, sports activities to food & beverage, the planned 35 Jihua Parks will try to appeal to all Chinese lifestyle prefences |
Jihua will take care of the legal and administrative aspects of the store operation, in addition to planning and management of import and logistics. It will provide an expert service in terms of sales and import licenses and provide support for trademark registration in China. It will also offer market research specific to customer and product.
It’s a profoundly ambitious concept, dubbed “˜The Lifestyle Destination’ in China. With Chinese domestic tourism booming and social attitudes to leisure changing fast and the government ever more keen to encourage consumers to spend at home rather than abroad, the Jihua Park concept may indeed redefine Chinese travel retail as we know it.
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ABOUT THE JIHUA GROUP
Jihua Group is a state-controlled company listed on the Shanghai Stock Exchange. It is part of state-owned Xinxing Cathay International Co Ltd, the 365th-ranked company in the international ranking of the Fortune Top 500 (with a turnover of US$32.5 billion).
Founded in 1912 as a manufacturing company, it has traditionally focused on the manufacture of technical equipment, such as uniforms and professional clothing, for public safety services.
It also produces and sells garments, shoes and hats; is involved in fabric dyeing and printing; and is active in leather accessories and rubber products. Jihua has a prominent sportswear brand, JH 1912.
Its annual output exceeds 170 million shoes and 60 million uniforms, while it has 40,000 employees, 25 million customers and a revenue of over US$4 billion dollars.
Xinxing Cathay President Liu Mingzhong was recently named by Fortune China as one of the 50 most influential “˜business icons’ of China in 2015.
CONTACTS
www.jihuapark.com
International Press Office
c.tagliabue@jihuapark.com
Piazza Missori, 2 – 20122 Milano – Italia – (+39) 02 00621122
Floor 36, United Plaza, room 3605 n.1468 West Nanjing Rd. Shanghai 200040 – (+86) 21 62486130
