By SIOW NAN YEE / Pic By HUSSEI SHAHARUDDIN
The mushrooming of new retail structures are expediting the demise of the older, archaic and less trendy older malls as competition for customers turns the sector into a red ocean.
Main regions in the country, like the Klang Valley, are already facing a major glut in retail malls with Retail Group Malaysia (RGM) projecting Kuala Lumpur (KL) alone to have more than 27 new shopping malls in the next 10 years.
28Mall.com CEO Fione Tan said some older malls are “dying” quicker due to an oversupply of new malls and limited choices of retail shops.
“The pond is only that big. Thus, the growing number of people trying to fish at the same pond means the more interesting bait might catch more fish.
“To stand out, malls should look at market positioning and branding, and differentiate themselves rather than just being another mall,” she told The Malaysian Reserve (TMR).
RGM said the oversupply of malls has been one of the major challenges to shopping centre owners in the Klang Valley for the past eight years.
There is an oversupply of retail space in the KL city centre, Petaling Jaya, Damansara and Cheras.
“The problem is not apparent in Klang, Bangi, Kajang, Kepong and Rawang,” RGM said in an emailed reply to TMR.
Top-performing malls such as Suria KLCC, Pavilion KL, Mid Valley Megamall, Sunway Pyramid and One Utama are unlikely to be affected because they are established with strong management teams.
Tan said older malls need to find a “niche” in the modern retail industry.
“Being old can be an attraction as new-generation consumers are willing to pay for unique experiences as well as ‘vintage’ products,” she said, adding that retail themes such as the Venice Grand Canal Mall in the Philippines, and the Siam Paragon Mall in Thailand have amased shoppers.
Sunway Shopping Malls COO Kevin Tan Gar Peng said any addition to the existing malls will increase competition for retailers in the already “Red Ocean” KL.
“A shake-out is imminent in poorly designed, managed, researched and developed malls which will suffer a drop in occupancy rate, average rent, and viability to sustain.
“The population base and growth of KL, as well as the arrival of tourists, are not up near to the numbers compare to cities like Bangkok and Jakarta,” he told TMR.
Kevin said malls today are developing into a lifestyle destination, providing experiences of shopping, leisure and dining under one roof.
“Shopping malls these days are not perceived as only a marketplace to buy and sell. They are also a social place for rendezvous dines, entertainment and to fulfil leisure wants,” he said.
RGM MD Tan Hai Hsin said the main challenge for malls like Plaza Sungei Wang is the strata-titled property and not just the “age”.
“The multiple ownerships require hundreds of consensus before any action of refurbishment and reconfiguration can be carried out.
“When external retail market and consumers’ shopping behaviour changed, the strata-titled shopping centre is not able to react quickly to changes due to its ownerships,” he said.
But he said old specialty shopping centres that cater for one or limited categories of goods and services continue to prosper.
“Old shopping malls, such as Plaza Low Yat which specialises in information and communications technology, are sustaining well.
“For decades, Pertama Complex is enjoying its competitive advantage as a specialty shopping centre for a wide selection of leather goods and uniforms,” he said.
According to the Malaysia Retail Industry Report 2018, specialty stores had garnered an encouraging growth rate of 5.6% in 2017, and ended as the best performer last year.