Value Retail sets sights on Chinese shoppers

"In China, there are only a handful of properly run outlet centers with a relevant mix of international brands. Most are poor imitations with little or no connection to the brand or master franchisee," said Wang Yuanyuan, a retail analyst at Essence Securities.

CITIC Securities also said that only a few of China's more than 200 outlet malls are doing well.

The concept of outlet malls was introduced to the Chinese mainland when Yansha Youyi Shopping City opened its first project in Beijing in 2002. The new retailing practice grew rapidly after that, bringing together hundreds of luxury brands under one roof, usually outside a main city and near large expressway interchanges, rather than at an expensive city center location.

Shanghai Bailian Group Limited and Beijing Yansha Youyi Shopping City, both of which are State-owned and have long experience in retailing, led the development of the market in last few years.

Management consultants McKinsey and Co expects China's middle class to increase from the current level of 29 percent of the nation's 190 million urban households to 75 percent of 372 million urban households by 2025.