With several sizable shopping malls set to be built all over Sarawak in the next few years, the state has the potential to become a shopping paradise in the future.
Industry players believe these malls are expected to transform the lifestyle and bring more excitement to the people.
Thus, it’s high time that Sarawakians look forward to more places to shop with friends and loved ones.
Plaza Merdeka Management Sdn Bhd general manager Cheah Kheng Mun observed that the retail industry in Kuching is still growing and has vast potential to become a shopping paradise in the future.
“Kuching is an untapped market for shopping malls as compared to other markets for instance, Peninsular Malaysia. This means that there is more room for the retail industry here to grow. It is actually good that more malls are coming up. It will serve the needs of consumers in different locations.”
According to him, people are always looking for places to hang out and shop.
He said that the challenge for the retail industry in Sarawak is not about competition arising from the increasing number of malls but more towards attracting shoppers to the shopping centre.
He explained that with more shopping malls to be built, they will bring in new brands which in turn will help to expand the lifestyle of the people in Sarawak.
Cheah foresees a bright future for the development of the retail industry in Kuching and other townships in Sarawak as there is less price war as compared with retailers in the peninsula.
Coramax Sdn Bhd director Sim Yaw Yen also believes that more shopping malls will benefit the people through enhancing their lifestyles and keeping the retail industry vibrant.
“Shopping malls can mould people’s lifestyle and bring changes to their living. Besides, it stimulates domestic spending and boosts the economy as well as creates employment opportunities for the locals. Thus, every mall should work together for the good of the industry as a whole,” he said.
New malls in Sarawak
Apart from Vivacity Megamall – said to be Sarawak’s largest mall soon with a gross floor area of 1.3 million square feet (sqft) – there are also other new malls coming up to provide more avenues for consumers to shop.
One such new mall is The Spring Bintulu, developed by PE Land Sdn Bhd, the management company of The Spring Shopping Mall. The Spring Management Services Sdn Bhd marketing and leasing director Andy Song said: “The Spring Bintulu is a ‘go’ for us as we have just received the approval from the state planning unit. It will be a regional city mall that will redefine the city skyline and we are targeting to open our doors by early 2017.
“The Spring Bintulu is a mixed use development that will offer two blocks of small office home office (SOHO) for sale,” he said.
For The Spring Bintulu, Song revealed that the construction of the shopping mall will begin next month.
He added that the shopping mall with a net lettable area (NLA) of 402,505 sq ft and gross floor area of 648,014 sq ft is located on Jalan Tun Razak, formerly known as Jalan Tanjong Batu next to the Everly Hotel.
He disclosed that The Spring Bintulu is built with a regional mall concept that combines a city centre sea view which is the first of its kind in Bintulu.
Song also said that the two blocks of SOHO will comprise 154 units for each block with several setup for customers to choose.
He pointed out that the setup ranges from 450 sq ft with one bedroom, 650 sq ft with two bedrooms and 1,378 sq ft with three bedroom duplex units.
Meanwhile, Affin Hwang Investment Bank Bhd (Affin Hwang) in a report dated Jan 30 said Aeon is targeting to open at least one mall in Sarawak by 2016 and 2017 each following a recent company’s visit.
The research firm believes that there are plenty of untapped potential in East Malaysia which will be positive for the group’s earnings in the future.
Affin Hwang observed that Aeon is continuing its expansion in the peninsular states with an eye on Sabah and Sarawak.
A local industry observer noted that a large land site which is located near the roundabout of McDonald’s drive-thru in Tabuan Jaya could be earmarked for Aeon’s new shopping mall in the future.
Without elaborating further, he believes that the site will be developed into a neighbourhood mall by Aeon in the medium term. Likewise, Affin Hwang noted that Aeon will continue its healthy expansion strategy of constructing two new malls per annum.
Apart from new malls, Plaza Merdeka Shopping Mall is looking to increase its retail space. Cheah disclosed that the company is planning to increase its NLA by more than 100,000 sq ft to accommodate higher number of tenants and to provide space for the arrival of new and commonly known international brands.
He said to sustain the business in the long run, a shopping mall needs to have the dynamics of a good tenant mix with a variety of brands to keep shoppers’ interest sustained.
New brands coming in
The arrival of new brands to a shopping mall is something that every shopper is always looking forward to. It gives shoppers a compelling reason to visit the shopping mall and discover new things as well as the opportunity to own something unique.
From the shopping mall management’s perspective, new brands which are opening at the mall can actually be a crowd puller to spur business growth.
Song said: “We are always looking to bring in new and exciting brands into Kuching. We recently welcomed the opening of Canadian brand, Aldo, the on-trend fashion footwear and accessories retailer to the shopping mall. Aldo is located on the ground floor of the shopping mall near the West Court entrance in between the retail outlet of Pandora and Esprit.
He says Aldo is currently occupying 1,424 sq ft at tHe Spring Shopping Mall. Song hopes that there will be more new tenants with different brands of products and services signing up with The Spring Shopping Mall.
Sim of Coramax, the developer of Vivacity Megamall, noted that the company is in discussion with a number of retailers, some of whom are carrying international brands to become a tenant at the shopping centre.
In October last year, he said that the company was targeting to have 280 to 300 brands ranging from various industries such as food and beverage (F&B), fashion, sportswear, retailers and entertainment outlets located inside the shopping mall.
He observed that for F&B, some of the brands that will be conducting businesses at Vivacity Megamall are Nando’s Chicken, Starbucks Coffee, Earthlings Coffee, Library Coffee, The Coffee Bean, Antipodean Cafe, Secret Recipe’s beyond veggie, Oinks, McDonald’s, Quiznos Sub and Burger King.
Additionally, he said Quiznos Sub which serves delicious and healthy submarine sandwiches will also be at the shopping mall. He noted that Quiznos Sub is the second largest chain restaurant serving submarine sandwiches while Secret Recipe’s organic F&B outlet is also available.
Besides that, Sim said Antipodean Cafe, one of the most popular Australian style cafes which is available at MidValley Megamall and Bangsar in Kuala Lumpur, serving nice western food and Kiwi recipes will also be at Vivacity Megamall when it’s open.
As for entertainment, Sim said TGV Cinemas (TGV) will be putting up its high resolution IMAX screen, the first of its kind in East Malaysia at Vivacity Megamall as well.
Besides cinema, Sim said there are also games outlets such as CYC Mega Leisure, Molly Fantasy and Kidzoona by Aeon for youths and kids.
Other than that, he observed the likes of KMax, one of the high-end entertainment outlets for karaoke singing and health and fitness centre such as Level Up Fitness will also be at Vivacity Megamall.
As for the sports section, Sim noted there will be Sports Direct – UK’s number one sports store which has taken up more than 10,000 square feet of space at the mall while Royal Sporting House and Sports Empire will also be there.
He said the sports cluster at Vivacity Megamall will occupy a total area of more than 30,000 square feet, and could be the largest in Sarawak having renowned brands such as Nike, Adidas, New Balance and Converse.
On top of that, Boulevard Shopping Mall tenants and leasing manager Jeremy Sim said the shopping mall is set to welcome a new brand to Kuching, MR. D.I.Y, a distributor of household products and hardware towards the end of the first quarter.
Moreover, other industry observer noted that there are also other brands such as Japanese fashion retailer Uniqlo which is going to make its presence in Kuching soon.
GST and retail industry
Meanwhile, a local retail player foresees a tough period for the retail sector during the initial stage of the Goods and Services Tax (GST) implementation.
The industry player noted that as there is no statistics or information to measure the impact prior to the GST implementation, it is very hard to gauge the level of consumer sentiment and their buying behaviour.
He believes that only after the six month of the GST implementation, then a clearer picture will emerge on how it affects the pattern of consumer spending and the retail market as a whole.
He believes that it will be the survival of the fittest for businesses as those with strong financial position will be able to weather the ‘tough’ period.
Similarly, when GST is being implemented, certain goods and services will cost more while the retail industry could experience a moderate growth due to softening of consumer spending.
Hence, with a big question mark lingering around for businesses particularly for the retail industry, industry players have turned more cautious with their strategies.
Nonetheless, other retailers seem to be unfazed by the scenario on the potential change in consumer sentiment. They agreed that while the GST is here to stay, they have anticipated some short term weakness in consumer buying behaviour.
Despite the sluggish consumer buying behaviour, they believe retailers will be organising attractive sales and promotional campaigns to boost sales.
Song of The Spring Shopping Mall said, “There will definitely be a period of softer retail sales as shoppers go through a period of comparison pre and post GST for various retail products and services.
“It is natural for everyone to be cautious and understand the net effect to our daily expenditure.
“Nonetheless, we believe retailers will be putting together attractive promotions to boost sales despite the consumer tax in place which will contribute to the economy’s overall health,” he said.
Meanwhile, Plaza Merdeka’s Cheah says: “Consumers will be more careful and selective with their spending. Sim of Boulevard Shopping Mall foresees a different challenge for the retail industry this year.
He explained that besides GST which could contribute to the higher cost of living, there are also other microeconomic and macroeconomic factors that will shape the pattern of consumer spending especially for the low and middle income groups.
“For instance, if certain consumers who tend to use a particular brand of household products discover that the product costs more after GST, they may look for substitute or switch to another brand.
“Some consumer may continue using the same particular brand of the said household products even if it cost more due to GST but they may need to substitute other things/brands along the way.
“It all depends on the psychology and buying decision of consumers. Although we roughly presume some of the changes in consumer buying behaviour, it is the extent of the changes which we are not sure about as we need data to support our findings. Therefore, the first six months of the GST period will be very crucial,” he observed.
In the meantime, he said Boulevard Shopping Mall will continue to focus on serving the mass market and its niche segment.
“We want to give consumers more choices to shop at our shopping mall. When we plan, we think from the consumer’s point of view in attracting new tenants to our shopping mall,” he said.
On questions with regards to the current trend of online shopping and will it affect the business of the physical shopping mall, he explained that physical shopping mall will still be able to attract crowd and shoppers as some customers will still feel the need to shop and hang out at the shopping centre with families and friends.
“Online shopping is more preferred among the younger generations and it is just for certain product categories for instance beauty products. It is also for those consumer who are cost-conscious and want convenience.
Besides, it also depends on the individual customer experience and their comfort level of using the Internet to perform business transactions,” he said.
Efforts to attract shoppers
As the operating environment for the retail industry is constantly changing, management of shopping malls have to think out of the box to come up with programmes and activities to entice shoppers to visit their outlets.
Cheah said Plaza Merdeka had in the past, organised events that contributed towards the community and is looking at similar events in the future. He explained that while such events do not generate profit for the shopping mall, it helps to engage and build up the relationship with shoppers.
Moreover, he said other activities organised by the shopping mall are loyalty programmes, shopppers’ incentive and so on. Cheah added that some of the activities will also encourage participation from the locals and there are also activities for the family as well as from different age groups of people.
According to him, the company has a strong marketing team to plan and schedule events on a monthly basis to entice shoppers to the shopping mall. At the same time, Song of tHe Spring Shopping Mall said: “This year like every year, we will have a fantastic line up of redemptions and lucky draws for Chinese New Year (CNY) including a special limited edition of The Spring Red Packet for shoppers with a minimum purchase.
“We will also be launching our fourth annual community Live Active Run on June 14 as well as many more events with our tenants to reward shoppers for shopping with us,” he said.
Moreover, Boulevard’s Sim said the hypermarket is organising promotional activities based on the festive calendar. For the upcoming CNY celebration, he said Boulevard Shopping Mall has set up a CNY Bazaar at the shopping mall to facilitate those celebrating the festival to grab some goodies at reasonable prices.
Market positioning of different malls
For Vivacity Megamall, Sim believes that the mall is suitable to be one that will be known and recognised for its exquisite F&B. He said Vivacity Megamall will house a variety of food ranging from local to Western that will cover close to 100 food outlets.
He believes that the mall could also be a favourite place among food lovers and could even become a food heaven in the future. He said “What is important for us is the F&B.
“I believe people will be attracted to come to Vivacity for the food as our whole mall will have many food outlets serving different types of food. We will also bring in some of Kuching’s authentic food such as the best laksa, kolo mee and put them in our F&B section.
“Besides, there will also be halal and non-halal food available at the shopping mall to cater for different categories of shoppers,” he said.
Apart from that, Cheah of Plaza Merdeka said the shopping mall has its own uniqueness to bring in the crowd to the shopping mall. He said those include security, operations and housekeeping.
Cheah added Plaza Merdeka has one of the most comprehensive closed-circuit television (CCTV) monitoring system installed for a shopping centre in Sarawak.
He noted that there are more than 150 CCTV cameras installed around the shopping mall to provide enhanced security and peace of mind for shoppers. Other than that, Cheah said Plaza Merdeka emphasises good housekeeping practices which has enabled the shopping mall to receive an award for cleanliness. He added Plaza Merdeka will be restructuring some of the tenants and bring in new brands to provide fresh image to shoppers. He hoped that with the strong marketing team that the company has in place, the team will come up with innovative ideas and programmes to attract a bigger crowd to the shopping centre.