China's offline retail sector is showing signs of recovery, with people now prioritizing the shopping experience, rather than good deals. Although online shopping giants have changed the way people behave and shop, it appears brick and mortar stores are shaking up the competition.

After renovations to add restaurants and entertainment venues in 2017, China World Mall in downtown Beijing saw customer flow up 20 percent and vendor revenue increased by 40 percent.

Zheng Tie, assistant director for China World Mall, said that the inclusion of more experience-driven venues including restaurants, a karaoke outlet and a gym helped the business boom.

After a few bitter years – cornered by e-commerce, store shutdowns, Chinese brick-and-mortar shops have begun to show signs of recovery. According to the Ministry of Commerce, some 27,000 offline retail firms surveyed saw a combined revenue increase of almost five percent in 2017 – three percentage points higher than the previous year. 

“There is an overall consumption upgrade. As online for so long dominated the scene, offline players are also trying to fight back, in terms of creating new ways of engaging with shoppers and driving shopping [to be] more like ‘shop-tainment’ – shop plus entertainment – or more about experience not just shopping. Because when Chinese consumers go out and shop offline they go as a family, they have to eat out. They probably will go to entertainment and other venues that are available there,” said Vishal Bali, managing director for Nielsen China. 

Bali added that the return of the popularity of offline retail shops is that Chinese consumers' tastes are becoming more sophisticated and the experience is becoming more important than finding good deals. 

With that said, Chinese online retailers are now expanding their services offline. Alibaba and JD.com are both getting in on the physical shopping experience, by building brick-and-mortar stores that sell fresh food.