Luxury SKP Shopping Mall Announces New Hohhot Location, its First Foray into a 3rd-Tier City

SKP, a well-known Chinese high-end luxury shopping mall, for the first time ever, it is entering a tier 3 city in China, choosing to open its next mall in Hohhot (呼和浩特) the capital of Inner Mongolia.

The GDP of Hohhot in 2019 was 27M and in the first six months of 2020, the average city resident’s disposable income was 18k RMB and permanent resident’s (meaning people who do not have a Hohhot hukou) disposable income was 23k RMB.

Skeptical Voices 

Currently, SKP has locations in Beijing, Xi’an, Kunming, Chengdu and Hangzhou, covering most of China except the Northeast. Hohhot fills that gap. What’s different is that all of these are 1st and 2nd tier cities. 

Some people worry that as a 3rd-tier city Hohhot will not be able to meet SKP’s sales ambitions. However, there were also sceptical voices when SKP announced it would open a store in Xi’an in 2018. Because before that, SKP was only located in Beijing which is a 1st tier city well-known for its high-end consumption.

Xi’an didn’t let people down. In its first half year, its sales volume reached 2.4 billion RMB, and in 2019, its sales was close to 4.2 billion RMB. In April in 2020, which was the birthday month of Xian’s SKP, its daily sales was close to 100M RMB. 

Within 3 years, SKP has quickly gone from one location to six, from which we can see Chinese consumers’ passion for domestic luxury consumption, especially after COVID. In 2020, the sales volume of SKP Beijing grew 15% to 17.7 billion RMB, which was the TOP1 among Chinese shopping malls for 10 years. It was also the first time for SKP Beijing to surpass Harrods in London, becoming the TOP1 internationally in terms of sales per unit area. 

SKP’s Growth Strategies 

Xiachen or opening stores in lower tier cities is one of SKP’s key strategies.

The shopping mall also wants to target young consumers. In the end of 2020, it opened a new shopping mall called SKP-S in Beijing, which features art exhibitions and requires brands to have constantly changing themed stores. Many of the stores offer co-branded products and limited edition drops here – consumers can’t find these products anywhere else. 

According to LADYMAX, it is expected that China will account for the largest percentage of sales in the global luxury market, and domestic luxury consumption is expected to grow 30% in 2021. 

Read more: 深度｜再次出人意料，国内第六座SKP选址呼和浩特