Future Land Development Holdings, the Chinese developer which lost billions of dollars in market value after its former chairman was arrested for allegedly molesting a nine-year-old girl, has rolled out new strategies to boost its shopping centre business.
Seazen Holdings, the company's Shanghai-listed subsidiary, said on Wednesday it will upgrade its Wuyue Plaza precincts with new, digitalised wet-market, jewellery, sports and children's sections.
"Customer behaviours have changed and our shopping malls have to change along with that. For example, we noticed that supermarket demand has shrunk in some neighbourhoods and it would be difficult for us to get such tenants. Thus we are using our space to introduce our own smart wet market, which can deliver fresh food to our customers nearby," said Yu Xiaoen, general manager of Seazen's commercial business research and development centre.
A lot of Chinese supermarket operators have started to rejig their fresh-food delivery business in recent years to boost their bottom line.
Many have followed the "omnichannel" model championed by retailer Freshippo, previously known as Hema, which is owned by the South China Morning Post's parent Alibaba Group Holding. The concept involves making use of both offline and online channels.
Most of Future Land's commercial revenue comes from its chain of shopping centres, branded Wuyue Plaza. By the end of 2018, the company had a total of 42 Wuyue Plaza complexes across the country.
Yu said that by the end of this year, the total will have risen to 64 malls, while the aim is to increase that to 100 next year.
Future Land is wrestling with the fallout from the arrest of its former chairman, Wang Zhenhua, who was detained by police on suspicion of child sexual abuse on July 3. His son immediately replaced him as chairman.
They had climbed back to HK$8.29 as of the market close on Wednesday, but are still down by about a fifth from their price on July 2, before the scandal broke.
Credit rating agency Standard & Poor's said the seriousness of the allegation against Wang and a sudden change in leadership could have severe repercussions for Future Land's reputation and brand name.
"This could hurt the firm's relationship with business partners and financial institutions. Also, investor perception may affect Future Land's capital market or other financing activities in the near term," said S&P, which has placed the firm on a negative credit watch.
The troubled developer has since then started to dispose of assets, including a plan to offload 40 estate projects in China.
Wang, a 57-year-old billionaire, controls a 71 per cent stake in Future Land, which in turn owns a 48.9 per cent stake in Seazen Holdings.
On July 3, Wang Xiaosong, Wang Zhenhua's son, was elected Future Land's new chairman, and the company said his father had been removed from all of his positions.
Under Chinese law, rape carries a sentence of between three and 10 years in prison, while sexual molestation of children has a maximum penalty of five years in jail.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.
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