Shopping Malls: Canada vs. China

Quick – which shopping mall is the world’s largest? If you said Edmonton’s own West Edmonton Mall, you’d be wrong. Despite holding the title for two decades, WEM is now number six on the list. A building boom in Asia has landed that continent nine of the world’s ten largest malls (the article says eight, but Wikipedia says nine):

Just three years ago, the top 10 list would have included a pair of popular California destinations—South Coast Plaza in Cost Mesa and Del Amo Fashion Center in Los Angeles—along with the famed Mall of America in Bloomington, Minn.

Here in North America the shopping mall is kind of passé, replaced by big box shopping centres like South Edmonton Common. A logical question to ask, then, is if the shopping malls in Asia will one day be seen as passé?

I think probably not. It seems to me there are two main differences between North America and Asia (when it comes to the importance of shopping malls). The first is population density – in Canada it is a mere 3.2 people per square kilometer, and in China it is 137 people per square kilometer (and these numbers are probably even more different if you look at just urban areas). There is clearly more space in Canada to build big box stores. In China, perhaps the shopping mall makes more sense because it is a more efficient use of space.

The second difference is in transportation. More families in North America own a vehicle (or two) than families in Asia do. This is changing, to be sure, as the income levels of countries like China and Thailand continue to rise. If you have lots of cars, it’s easier to drive to big box stores. The large number of vehicles in North America has probably helped the switch from malls to big box stores.

The first difference (population density) is more important than the second (transportation), in my opinion. Even though more Asian families will have vehicles in the future, the problem of population density will probably only worsen. For that reason, I would guess that shopping malls will continue to be important in Asia for a very long time.

As for the future of malls like West Ed, I am not sure. They seem to be doing okay for now, even if growth isn’t what it used to be, but that may change in the future. I think shopping malls in North America will probably have to reinvent themselves one day to stay competitive.

Read: USA Today