(Yicai) Sept. 22 -- The second phase of Bailian Outlets Plaza, the largest outlet shopping center in China by annual sales revenue, opened yesterday. Parent firm Bailian Group is aiming to transition from traditional retail to what it sees as more promising commercial formats.

Located in Qingpu district in Shanghai, the second phase has a total investment of nearly CNY1 billion (USD149.3 million), and it is expected to boost the annual sales revenue of the shopping center to over CNY7 billion, Bailian told Yicai.

An outlet is a shopping center that mainly sells branded goods at discounted prices. Opened in 2006, Bailian Outlets Plaza was China's first shopping center of this type. Last year, its sales reached CNY6.3 billion (USD940.8 million), maintaining its position as the top outlet in China for 14 consecutive years.

Parent firm Bailian is a state-owned large retail group in Shanghai, operating in department stores, chain supermarkets, shopping centers, and outlets. As the domestic retail sector evolves, Bailian is gradually reducing the emphasis on chain supermarket operations.

Earlier this year, its listed arm Shanghai Bailian Group announced that it would terminate its trust management of the equity held in Lianhua Supermarket Holdings by its parent company. Upon completion, Shanghai Bailian's voting rights in Lianhua Supermarket will decrease from 56.66 percent to 15.15 percent, and it will no longer consolidate Lianhua Supermarket into its financial statements.

After this process is completed, Shanghai Bailian will concentrate its resources on department stores, shopping centers, and outlets that are considered to have better profitability and sustainable development prospects. This strategy will also expand the supply chain, and enhance digital and intelligent infrastructure, an internal company source told Yicai.

Moving forward, Shanghai Bailian will seek management projects in the outlet sector with light asset operation models, the source also revealed, while further exploring the value of existing properties in the department store and shopping center sectors to enhance overall capabilities.

In the first half of this year, Shanghai Bailian's net profit increased by 192 percent year-on-year to CNY913 million (USD136.3 million), despite a 9 percent decline in revenue to CNY12.1 billion (USD1.8 billion). Notably, revenue from the outlet segment grew by 10 percent to CNY875 million, according to the latest financial report. The significant profit growth during this period was primarily attributed to gains from land reserves.

Editors: Dou Shicong, Tom Litting