New South China Mall ranks in at number one in size at 7.1 million square feet! That is almost twice the size of Mall of America. However New South China Mall has been 99% vacant since 2005 when it opened. There are only 47 stores in this entire shopping mecca. The potential of 2,350 stores would give this mall twice as many stores as the number two in size which is also in China.
An outdoor plaza and hundreds of palm trees, fountains, gondolas, and even an Egyptian Sphinx should make this mall quite the shopping experience. It has been described as a “dead mall”.
There is a roller coaster and amusement park in the center of the deserted mall. There are sheets and simple barriers marking off the abandon shops. There is an employee whose job is to sit in a chair and be sure that none of the visitors go into the abandoned areas. The canal which was supposed to be used to transport customers throughout the mall now is green in color and not appealing.
The developers of the mall expected more than 100,000 shoppers a day! There are many speculations as to why the mall is so deserted.
The first problem observed is the location. If you ask a resident of Dongguan they might not even know what mall you are talking about, and if they do most do not know how to get to the mall. There are little transportation links to the mall. The one bus stop near the mall is about a fifteen minute walk from the mall. Once you know where the mall is, you realize they did not choose a target area of consumers.
Dongguan has almost ten million residents but most are migrant workers struggling to pay the bills. If they cannot make ends meet they cannot afford a roller coaster ride. Many of the residents work at one of the numerous factories. If they do have a little extra cash, they do not have the extra time. The New South China Mall was supposed to be a high-end shopping center; migrant workers do not exactly meet the target consumer criteria considering they are working day in and day out to feed their family not buy the hottest fashion or latest technological gadget.
Many say this is the perfect example of China’s investing without thinking problem. China enjoys investing in real estate without completing the business and marketing research to know where it is a good investment or not. If proper research was completed this mall would never have been constructed here, between the level of poverty and industry in this area it is obvious why the mall is not a success.
It seems as though the amusement park and theater have a steady stream of customers on most days, which is why the fast food restaurants are able to survive.
There are multiple “ghost towns” in China due to the very same reason. Many structures beautifully built yet completely empty. Investments sitting, losing value, and wasting space is a bit of concern. The banking system in China has no problem taking care of the bad debt. Their economy still seems to increase an average of 7-8% so the ghost town projects do not seem to affect them as heavily as you would think.
Most of the 47 open stores are fast food restaurants near the entrance or next to the IMAX outside the mall.
The amusement park and IMAX keep people coming to the mall yet they have nothing else to come for. Maybe if a few shops could spike the interest of a couple movie goers the owners could reach their 80% occupancy goal. There is life and massive amounts of potential in this building someone somewhere needs to light a new fire.