photo: Indoor floating market @Icon Siam
At a time when many shopping malls worldwide are reporting rising vacancy or falling rentals, Thailand saw the lavish opening of IconSiam just last month (November 2018). IconSiam is a B54 billion (US$1.65 billion) mixed-use-development that spans over 400 meters along the Chao Phraya river in Bangkok (1).
Central Pattana Plc (CPN) is investing more than B1 billion (US$30.5 million) to develop a high-end mall Porto de Phuket (2), and the Siam Piwat Group entered a joint venture with American Simon Premium Outlet to open three luxury retail outlets in Bangkok, northern, and southern Thailand in the next 5 years (3). Colliers International Thailand estimated that 447,475 square meters of new retail space will be developed and made available between 2019-2021.
Repositioning Malls as Experiential and Community Hubs
Clearly the retail sector is optimistic over the future of brick and mortar malls in Thailand. Thais are very social and love to hang out with friends. Local leading malls operators have successfully exploited this trait to reposition their malls as community hubs where friends and families can come together to “experience” services that cannot be offered online.
The World Trade Center converted an entire floor into an education hub and even created a communal play area for children and parents to enjoy while they wait for the next class. Families and tourists flock to Kidszania or visit the underground aquarium before heading to one of the many trendy dining options available. At the Emquartier, young couples strolled up a continuous slope perusing a range of trendy restaurants at the Dining Helix after a stint at either the cinema or Bounce Trampoline park.
Multi-Channel Marketing
Thai malls are quick to acknowledge that they must embrace technology if they are to win the battle of bricks against clicks. Leading malls are already utilizing their own mobile and online applications or are in the process of developing one to actively engage customers and provide personalized services.
Forging effective strategic alliances
Leading Thai retailers are also busy forging strategic alliances that will further promote their brand or complement their core business strengths. Thailand’s Central Group, for example entered into a joint venture with JD.com, a Chinese e-commerce company (5). The Mall Group partners with Siam Commercial Bank to offer their shoppers a “cashless retail experience” by enabling shoppers to pay for their shopping using QR codes.
Targeting tourists’ traffic
Tourist traffic is very important to Thai shopping centers, even more so for high-end malls. Central Pattana Plc (CPN) reported that profit grew 47% in 2017 on strength of tourist spending and that Chinese tourists spending alone accounted for 20% of their 2017 retail sales (6). Thailand played host to 35 million tourists in 2017 and the figure is expected to grow for 2018.
Thai Shopping Centers Association’s Shopping Centre 4.0 Initiative
The TSCA consists of the top 13 operators in Thailand’s shopping center sector and operate 97 shopping malls with eight million square meters in combined retail space. The TSCA’s 4.0 Initiative visualized Thailand as the top retail destination in ASEAN (7). TSCA will encourage local malls to adopt appropriate digital technologies that can help improve logistics as well as enable malls to adapt quickly to changing consumer taste and lifestyles. The association will also assist in building partnerships between competitor malls to better serve customers who come to Thailand to shop.
photo: The Helix Dining@The Emquartier
(1) Five years in making, megamall makes grand debut (10 November 2018), The Bangkok Post. Available online: https://www.bangkokpost.com/business/news/1573294/five-years-in-making-megamall-makes-grand-debut
(2) Central plans unique department store in Phuket Smart City (29 October 2018), The Nation. Available online: http://www.nationmultimedia.com/detail/Corporate/30357411
(3) US-based Simon forges Siam Piwat deal (6 June 2018) The Bangkok Post. Available online: https://property.bangkokpost.com/news/1479577/us-based-simon-forges-siam-piwat-deal
(4) Market Report Bangkok Retail Market 1Q 2018, Colliers International Thailand Research
(5) Thailand’s Central Group expects online surge through JD pact (8 January 2018), The Business Times. Available on: https://www.businesstimes.com.sg/consumer/thailands-central-group-expects-online-surge-through-jd-pact
(6) Thai mall operator profits up 47% on tourism boom (22 February 2018), The Business Times. Available online: https://www.businesstimes.com.sg/real-estate/thai-mall-operator-profits-up-47-on-tourism-boom
(7) Mall owners in Bt57 bn growth push (18 October 2017), The Nation. Available online: http://www.nationmultimedia.com/detail/Economy/30329538