Malaysia Shopping Malls Association (PPK) Advisor HC Chan, who shared on Transformation and Surviving Challenges, asserted the number of customers throughput is a given as long as there is human civilisation.
There is a need for marketplace where people converge. So certainly, there is a place for malls. He cited the example of Sunway Shopping Mall, where the word ‘shopping’ has been dropped to be known as Sunway Mall instead as 50% of the shoppers were not here for shopping.
With limited time going to the malls, one can only choose to go to the top three malls out of 20 malls along Orchard Road in Singapore. In a nutshell, it is better to take the top three positions and maintain market leader position, he said.
Showing the bigger picture, Chan pointed out that headwinds are favourable and will impact retail and mall landscape.
Facing loss of headwinds, the enablers or tailwinds that will be tomorrow’s catalysts are urbanisation, social space demand, growing affluence, and tourism growth.
On global headwinds, he opined Malaysia will be doing okay if its gross domestic product (GDP) is at 5% and great if it is at 6%.
To him, retail space oversupply could be caused by recurring income from property developers venturing into malls, greater Kuala Lumpur with the high number of malls, over-development and under-served or pockets of imbalance.
Technology disruption can result from the increasing use of Grab, translating into drop in income from parking space, a 20-25% increase in traffic and underutilised parking space
Tailwinds or enablers like urbanisation, growing influence and social space demand bring more people to stay in the city.
With limited land, buildings cannot go flat but go high instead and with small living space. Undeniably, invites to homes are uncommon these days, with most people ending up with going to the malls instead.
Chan quoted CEO Jesper Brodin that IKEA caters for people who live in “small spaces, have thin wallets and little time”.
On tourism growth, a top gross domestic product contributor in Malaysia, he said 35 sen go to the mall for every Ringgit spent and Malaysian malls are consumption driven.
Staying ahead, transformation includes firstly trade mix resetting to counteract negative cash flow on space per sq ft. Anchors like big departmental stores are reshaping in the consolidating of store space.
With mini anchors, trends show they are both increasing and shifting. Growth is in F&Bs, leisure, entertainment and specialty stores.
The trade mix for socialisation continues to be resilient. Western brands are on a plateau while Asian brands are on a rise.
Services like health, wellness and recreation are growing. Niche trade is virtual reality parks, Pop up stores and warehousing. A growing trend is co-sharing workspace.
Transformation through integrated development sees a case study in Sunway. Of the 12 core businesses, six can be blended in easily into integrated development. Some can be used smartly like the use of car parks in retail and office interchange. It is good for branding and reap benefits in the synergy.
On curating experience, functional shopping has evolved to experiential shopping. The advantage over online is whilst online utilises two senses, experiential shopping tries to utilise all five senses.
Chan summarised that listening to retailers and building relationships are the way forward.
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