What: SM Supermalls expands its China footprint with two new malls in Fujian province by 2027, while simultaneously pursuing ambitious growth targets in the Philippines.

Why it is important: This expansion demonstrates retail groups' continued confidence in China's regional markets despite economic headwinds, while showcasing how Asian retail leaders are successfully managing multi-market growth strategies.

SM Supermalls is set to strengthen its presence in China's Fujian province with two new mall developments, scheduled to open in Xiamen and Fuzhou by 2027. The expansion comes despite China's economic slowdown, with the company expressing optimism about resilient consumer spending in the region. SM Supermalls president Steven Tan revealed that the Xiamen location will be strategically positioned in the city's outskirts, leveraging its proximity to their Chinese headquarters for operational efficiency. The Fuzhou development represents their entry into the provincial capital, responding to government-offered opportunities. Additionally, the company is enhancing its existing presence through the SM City Xiamen Phase 4 expansion, which includes plans for a boutique hotel in partnership with Intercontinental Hotels Group. This growth in China complements SM's broader expansion strategy, which includes plans to reach 100 stores in the Philippines by 2027.

IADS Notes: The announcement of two new malls in Fujian province by December 2024 marks a significant milestone in SM Supermalls' dual-market strategy. While the company has been aggressively expanding in its home market, with plans for three new Philippine malls announced in December 2024 and a target of 100 locations by 2027, it has maintained a strategic focus on China with eight existing malls. The choice of Xiamen and Fuzhou for expansion demonstrates SM's calculated approach to regional development, particularly evidenced by selecting Xiamen's outskirts for its proximity to their Chinese headquarters. This balanced growth strategy is supported by strong performance indicators across both markets, with the mall division reporting a 9% increase in rental income as of August 2024 and a 21% rise in foot traffic in their Philippine operations. The integration of a boutique hotel through the potential IHG partnership at SM City Xiamen Phase 4 further reflects the company's evolution toward creating comprehensive retail destinations in both markets.

SM to open two new malls in Fujian, China, by 2027