Huge Losses Are the Culprit "The store was exceptionally quiet." During a recent holiday, Wang Yun strolled with her family to an old-city department store. Facing the unchanged and sluggish business, she sighed. "It's indeed an old department store, with little change: jewelry, cosmetics, and shoes on the first floor; women's, men's, and children's clothing on the second, third, and fourth floors. Even during the holiday, there was hardly any foot traffic," Wang Yun said. "Traditional department stores are all the same. The layout is similar, making it hard to offer customers anything fresh. So, for outings with kids, meals, or movies, we go to places like Wanda Plaza, not these department stores," she added. "Moreover, I rarely buy things in physical stores now. E-commerce is convenient and often has promotions, so why shop offline?" Wang Yun noted that during her stroll, she mostly saw older consumers. "Interestingly, half of the first-floor entrance area is now a discount zone, with brand-name clothing marked at 1 to 5 percent off. It's mostly elderly customers asking prices," she said. The sluggish business of traditional department stores is not an isolated case. According to the National Bureau of Statistics, from January to May, total retail sales of consumer goods reached 19.5237 trillion yuan, up 4.1% year-on-year. By retail format, sales of specialty stores above designated size grew 5.1%, convenience stores 4.9%, and supermarkets 1.8%, while department stores and brand specialty stores fell 3.2% and 1%, respectively. In recent years, traditional department stores have faced operational difficulties, with many shopping centers reporting closures or directly "stopping losses" by shutting down, reflecting a widespread survival crisis. For example, Tianjin Quanyechang Department Store recently announced it would suspend production and operations from June 30. The notice stated that the store has been suffering huge losses, has had no main business for a long time, and is already in a state of closure. Tianjin Quanyechang Department Store (Group) Co., Ltd. said that due to continuous huge losses, and given that the enterprise has had no main business and is already closed, with approval from higher-level units like Quanhua Group, the company decided to suspend production and operations. Additionally, on March 25 this year, Meilongzhen Isetan Department Store in Shanghai's Nanjing West Road business circle issued a notice of business termination, saying that due to the expiration of the lease, it would close on June 30, 2024. According to statistics from Lianshang.com Retail Research Center, in 2023, 21 department stores nationwide closed, including Pacific Department Store, Aeon, Parkson, Jiebai, Dayang Department Store, and New World Department Store. Notably, the latest statistics from Lianshang.com show that as of now in 2024, 10 old department stores have announced closures, with 5 completely shut down and the other 5 to be upgraded or demolished for reconstruction. Among the 10, the "youngest" is Isetan in Tianjin Binhai New Area, which operated for 11 years; Shanghai 600 and Shanghai Women's Products Store, which announced demolition and reconstruction, were established in 1952 and 1956, respectively, and have operated for nearly 70 years; Tianjin Isetan Nanjing Road store, Guangzhou Panyu Friendship Store, and Shanghai Huilian Commercial Building have also operated for over 30 years. Summarizing the reasons for department store closures, losses are the most direct cause, and behind lease expirations, the essential reason is enormous operational pressure. For example, data from the operator of Meilongzhen Isetan shows that from March to November 2023, its operating loss was 376 million yen (about 18 million yuan), widening from a loss of 266 million yen in the same period last year. 70% of Department Store-Related Enterprises Have Closed Industry insiders believe that the recent wave of department store closures reflects common problems in this retail format. For instance, Shanghai 600 officially closed after business on February 18 this year. Nearby, the 30-year-old Shanghai Pacific Department Store Xujiahui branch closed on August 31, 2023. Earlier, Pacific Department Store Huaihai Road and Xinkezhan branches, as well as the Plaza 66 on Nanjing East Road, had also closed. At its peak, Printemps had 11 stores in Shanghai; now only 7 remain. Looking at the development trajectory of the entire format, the decline of department stores has almost kept pace with the rise of e-commerce. The advantage of department stores lies in their rich product categories, but in the face of online shopping, even all the goods in a large mall are just a drop in the bucket. After Tmall launched "Double 11," more and more brands began to embrace online platforms, and the brand advantage of offline department stores began to fade. As early as 2012, department store foot traffic saw negative growth. That same year, the e-commerce market transaction scale reached 7.85 trillion yuan, up 30.83% year-on-year. Meanwhile, new consumption forms like fresh food e-commerce and group buying began to emerge. A year later, e-commerce development accelerated again. Alipay's per-minute transaction volume exceeded 100 million yuan. During the 2013 "Double 11," sales surpassed 10 billion yuan in less than six hours, and Tmall achieved annual sales of 35 billion yuan—a figure that was already out of reach for department stores at the time. Convenience, speed, and low prices are e-commerce's killer features, quickly squeezing the living space of department stores. In 2015, Wanda Department Store alone closed 40 stores, and Wang Jianlin soon proposed that Wanda must "de-departmentalize." In recent years, the number of department stores has been rapidly decreasing in first- and second-tier cities. According to incomplete statistics, in 2022, 42 department store outlets stopped operations nationwide, 27 of which were old stores with over a decade of history. In 2023, another 21 department stores closed. Data shows that the number of department store-related enterprises nationwide once exceeded 150,000, but currently, 110,000 have ceased operations or been deregistered, meaning over 70% of such enterprises have closed. Globally, the decline of department stores is not an isolated case. At the start of 2024, Macy's in the U.S. announced layoffs of 2,350 employees and the closure of 5 stores. In Japan and Germany, several long-established department stores also closed their doors in the new year. Of course, in response to the impact of e-commerce, department stores have taken action, initiating renovations, transformations, or directly embracing e-commerce. For example, among Beijing's core business districts, Xidan is the most representative. It is adjacent to Chang'an Avenue to the south and the CBD financial district to the west, with significant location and crowd advantages. Here, Xidan Shopping Mall, which had been the top retailer in Beijing for many years, was forced to start renovation in March 2022. Beijing Beichen Shopping Center's Yayuncun branch closed in 2018. It once had annual revenue of up to 1.2 billion yuan, but from 2012, performance declined, and by 2017, the huge shopping center's half-year revenue was only about 80 million yuan. Under the tide of the times, the continuous decline and demise of department stores is lamentable. Industry at a Crossroads It is worth noting that not only are department stores in China facing challenges, but Japan's department store industry is also at a crossroads. According to a June 11 report by Nikkei, due to the impact of local economic depression, department stores in small towns are struggling and even facing business crises. Reference News also reported that in the Japanese market, department stores have been significantly adjusting their product mix to adapt to the times and consumer needs. Among them, the reduction in clothing, a main product, is particularly notable. After the collapse of the bubble economy in the 1990s, Japan entered a period of deflation, and consumers clearly preferred low-priced products, so the clothing market had to shrink. With no increase in income, purchasing power declined, and the desire for high-end clothing disappeared. On the other hand, the market share of "general merchandise" is rising significantly, including jewelry, art, and cosmetics, which are major procurement targets for the wealthy and inbound tourists. Department stores were once hailed as the "king of retail." This is because they sold high-end goods and held a higher share of the consumer market than supermarkets for many years. But later, they were dethroned by new retail formats that emerged after World War II, such as supermarkets and convenience stores. Since the 21st century, the rise of e-commerce, represented by Amazon, has also led to a decline in the status of department stores in the retail industry. Apart from Japan, South Korea's department store foot traffic has also dropped significantly. According to Sichuan Observation, in South Korea, due to declining urban populations, store sales have been falling, and department stores and large supermarkets centered on local cities are closing one after another. Comprehensive reports from Yonhap and SBS on the 15th say that as department stores disappear, foot traffic in nearby markets has also dropped significantly, increasing concerns about "local extinction." The report says that Lotte Department Store Masan branch, which started as Daewoo Department Store in 1997 and was acquired and operated by Lotte Group nine years ago, will close at the end of this month. The store has the lowest sales among department stores nationwide, and with cumulative losses of over 80 billion won (100 million won is about 525,000 yuan), it can no longer sustain operations. Within five years, 35 large department stores and supermarkets, including Hyundai Department Store and NC Department Store Busan branch, have closed. Local cities with declining consumption due to population decline and aging are the most concentrated areas for closures. At the same time, commercial districts centered on large supermarkets in local cities are also facing crises. For example, a market official near Lotte Department Store Masan branch said that many customers visit other markets after shopping at the department store before going home. If the department store closes, the entire commercial district will be impacted. The report also mentioned that although many local merchants do not want the department store to close, due to the activity of e-commerce, physical store sales have further decreased, and department stores and large supermarkets are gradually falling into an awkward position. As the polarization of distribution networks between Seoul, the capital area, and local cities deepens, concerns are growing about job losses and stagnation of regional commercial districts due to the closure of department stores and large supermarkets. Carrying the mark of the times and once achieving impressive performance, department stores are now fading as new kings replace old ones. But some department stores are still growing. 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