Attention Shanghai Shoppers
ShanghaiMart’s management team tackles marketing and re-merchandising
SHANGHAI, China—Walk into the ShanghaiMart in China, and you could be in any major mart in the United States.
The architectural design is clean and modern. A skylighted foyer lets the outdoor light seep in. More than 2,000 glassed-in showrooms line the carpeted hallways.
The only hint of China is at the entranceway, where long rows of blue-and-white ceramic pots decorated with Chinese motifs hold bushy pink azaleas.
But as modern as the mart may be, local manufacturers are not scurrying to embrace the concept behind China’s first international trade mart.
“Manufacturers are used to having their own showrooms in their factories,” said Elizabeth Harrington, a former PricewaterhouseCoopers partner who worked in Shanghai for years. “They want to keep their margins low, so they don’t want to spend the money for a showroom.”
Adalberto Grunwald, who lives in Shanghai and designs, produces and exports apparel to Canada and Europe for Unity Dragon Ltd., also cited money as a reason not to rent a showroom at the mart.
“I was looking for a showroom there,” he said. “I thought it would be the best place to have it. But the price was too high. They wanted $1,000 a month for 30 square meters. I found another showroom that had 220 square meters for the same price.”
Despite being open for nearly four years, the 2-millionsquare- foot structure is only 50 percent occupied.
The Market Center Management Company (MCMC), the Dallas-based company that owns the Dallas Market Center and manages part of the California Market Center, has been trying to address that situation ever since it signed a 7-year management agreement last summer with the mart’s owners.
“The people who built the mart did not fully understand the leasing of space and the buyer-delivery side of the business,” said Bill Winsor, president and chief executive of the MCMC. “That’s why they brought us in.”
The mart is an unusual building in that it mixes showrooms for plumbing fixtures, timber, electronics and office furniture with apparel and textile showrooms.
In addition to the mart, the center contains the 30-stor y ShanghaiMart Tower, a highrise office tower that is 95 percent occupied, and the ShanghaiExpo, 300,000 square feet of exhibition space.
Originally, Trammell Crow, the parent company of the MCMC, had planned to be one of the par tners in building the ShanghaiMart. But after prodemocracy protests in Beijing’s Tiananmen Square in 1989 left scores dead and thousands arrested, the Texas company backed out of the deal, Winsor said.
Instead, five Asian businessmen from Taiwan, Singapore and Indonesia went ahead with the project. Now, instead of being a joint owner in the mart, the MCMC is running the place.
The company brought in Dick Rutledge, who took over as the mart’s general manager last November.
A tall, lanky man with a slight Southern drawl, Rutledge does not speak Chinese. He acknowledges that he’s been “drinking from a fire hose” ever since he arrived and stomping out small problems as they arise.
“This is a really beautiful building, but it was missing the proper management to deliver the vision of the mart concept,” said Rutledge, who has a staff of more than 400 people. Only eight of them speak English.
Rutledge, who came from the ABT Corp. as corporate vice president of sales and marketing, has a few hurdles to overcome.
While the fifth through seventh floors are dedicated to textile and apparel showrooms, they are all blended together. There is no physical division of womenswear, childrenswear and textiles.
“We’re trying to restructure the showrooms,” noted Richard Chen, the ShanghaiMart’s vice president of marketing.
Meanwhile, the mart’s management is working on building an area called KidsProvince, a consolidated area that would be dedicated to a range of children’s goods, from apparel to bicycles. It’s a concept that has worked well at the Dallas Market Center, Rutledge said.
Another emphasis is being put on leather goods on the fourth floor.
“The largest export in the last three years has been leather goods, from car seats to shoes,” Rutledge said.
To make life easier for bigstore buyers, the mart’s managers are putting the finishing touches on a new buyers’ lounge where small rooms are available for buyers to view goods quietly and privately. There is a separate working area with computers and small conference rooms where buyers can talk with vendors.
“We can set up private buying events or develop a review of new sources,” Rutledge said. “If buyers tell us what category they are interested in, we can find 15 vendors and present them to the buyers.”
The goal is to have a one-stop buying center where there is a bonded warehouse, a freight-forwarding firm, a garment-testing center, a commercial bank and fast tracking of export licenses.
“Everything you need for fast tracking is going to be here.” Rutledge said.
