China – one of the world’s fastest growing economies - is facing an intense growth in the retail industry. Evidence of this can be seen through the number of malls that are popping up in China. It now has over 400 malls and large-scale retail spaces, with 200 more under construction in Beijing alone. This is partly due to the run-up of the 2008 Olympics in August, as Chinese consumers are eager to try a taste of Western-style superstores and big brand name products. But this is the right move for the retail industry or are they heading for trouble? Already, four shopping malls in China are larger than the Mall of America. Two are even bigger than the West Edmonton Mall in Canada, which just surrendered its title as the world's largest shopping mall to a mammoth complex in Beijing. And by 2010, China is expected to be home to at least seven of the world's 10 largest shopping malls. With this, it is not surprising that a lot of investors find this industry a gold mine. It seems like these shopping malls have it all – the world’s biggest retail spaces, replicas of seven western tourist destinations, floors of branded international fashion, and even multinational food courts.
But what all these malls are missing is shoppers with money to spend. Mall developers planned on attracting 100,000 visitors a day, but instead draw only about 10,000 on a good day, more than a year after opening their doors.
So what’s the problem? Location does not seem to be the reason, since most of the malls are located in the thriving cities of China. It may be partly due to the fact that they are all close by to each other, with some only 50 miles apart. However, the main reason is the type of consumers. The Chinese are savers more than spenders. Usually, they save about half of their income, and after deducting living expenses, there is not a lot left to spend on brand name products. Another reason is that many urban residents, especially older residents, still likes to shop locally and simply can’t afford the high prices. Even with the younger Chinese visiting these mega complexes, it still won’t be enough to support this retail construction boom.
How, then, can retailers solve this problem? Even though China is considered a fast-growing economies, retailers cannot assume that the type of consumers there will be the same as in Western countries. Retailers will need to do in-depth market research in order to understand the behavior of Chinese consumers. Consumers may not even need the ‘biggest mall in the world’ or one that offers the best experience, they may just need a simple affordable mall that meet their needs. Sometimes ‘gold mine’ opportunities blind retailers to what they were supposed to offer, which may eventually lead them to big failures rather than huge successes.
So what’s the problem? Location does not seem to be the reason, since most of the malls are located in the thriving cities of 
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