In 2023, nearly 50 outlets in the country surpassed the 1 billion yuan sales mark, while 12 achieved sales exceeding 3 billion yuan — up from just two in 2017.

Leading the pack, Shanghai Qingpu Bailian Outlets recorded 6.17 billion yuan in sales, outperforming Japan's Gotemba Outlets to become Asia's top-performing outlet center.

The Qingpu outlet is undergoing further expansion, with its second phase — an addition of 100 new stores — expected to open by 2026. This will make it the largest outlet shopping village in Asia, hosting more than 400 stores and 600 brands.

Other developments include the Wangfujing Welltown in Beijing, set to open in 2025 near Universal Resort Beijing. It aims to feature over 500 domestic and international brands, with 60 percent being first-time entrants to Beijing's suburban retail market.

Outlets are increasingly combining retail with leisure, offering "shopping + micro-vacation" experiences.

Shanshan Outlet, which operates 20 outlets in China, has achieved annual sales of 30 billion yuan. Its recent openings in Chengdu, Sichuan province; Zhengzhou, Henan province; and Dalian, Liaoning province, mix local cultural elements and outdoor amenities.

RDM Asia, which first entered the Chinese mainland in 2011 with the first Florentia Village luxury outlet in Tianjin, has expanded to seven projects in the market. During the National Day holiday in October, its outlets recorded sales of 600 million yuan, marking a 6.7 percent year-on-year increase, with foot traffic rising to 1.24 million visitors.

By 2023, Florentia Village's annual revenue had reached $1.9 billion, reflecting a 244 percent increase in corporate revenue from 2017 to 2023. In the same year, it attracted over 25 million customers and generated a turnover exceeding 13 billion yuan. The total number of members grew to 5.3 million by 2023, and surged to 5.8 million by October 2024.

The increasing focus of top luxury brands on upgrading has driven entry-level consumers to outlet stores, where they seek high-quality yet budget-friendly products, according to the company.

Florentia Village, therefore, positions itself not only as an alternative platform for purchasing luxury goods, but also as a reflection of rational consumption and the pursuit of a high-quality lifestyle, said the company.

The outlets operator continues to optimize and expand its brand portfolio, introducing popular midrange brands that resonate with younger consumers.

For instance, in 2023, Shanghai Florentia Village launched well-known brands such as Kailas, La Martina and Skechers. In 2024, the Florentia Village in Guangzhou and Foshan, Guangdong province, introduced a 1,500-square-meter superstore for domestic sportswear brand Anta.

In September, Florentia Village unveiled a partnership with online travel service provider Ctrip. This collaboration focuses on areas such as data empowerment, joint marketing, and enhancing tourism-related consumption.

Outlets leverage their "big brand, small price" appeal and low return rates, setting them apart from e-commerce platforms.

During the 2023 "618 Shopping Festival", some online retailers experienced return rates as high as 90 percent, while outlets of the Beijing Capital Group Company in Wuhan, Hubei province, and Jinan, Shandong province, reported return rates of just 2 to 4 percent.

The rise of outlets comes amid challenges for traditional high-end malls. Suburban shopping is gaining traction as central business district malls face declining foot traffic and revenue.

For example, Hang Lung Properties' malls in Shanghai and Shenyang, Liaoning province, saw double-digit drops in retail sales during the first half of 2024, reflecting subdued luxury demand. Similarly, Swire Properties reported year-on-year declines of 17 percent and 11.7 percent at its Chengdu Taikoo Li and Guangzhou Taikoo Hui projects, respectively.

Despite these setbacks, Swire Properties is expanding in the mainland market. Its INDIGO Beijing development, renamed Taikoo Place Beijing, is undergoing a second-phase extension set to open in stages from late 2026.

Tim Blackburn, CEO of Swire Properties, highlighted Taikoo Place Beijing as the company's largest project on the mainland, reflecting long-term confidence in the market of the city.

Globally, Bain & Company has forecast a 2 percent decline in the personal luxury goods market to 363 billion euros ($375.7 billion) for 2024. While Japan and southern Europe show resilience, China faces a rapid slowdown alongside challenges in South Korea, said the report.

The report said that beauty and eyewear lead in growth, while jewelry remains the most resilient luxury category. In contrast, shoes and watches are struggling.

Bain anticipates a recovery in China during the second half, with early signs of improvement in the understated, timeless styles, and in the brands effectively engaging with local consumers. However, the first half is expected to remain challenging for luxury consumption, said the report.