The retail row

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(Photo from: business.inquirer.net)

(Source: Inquirer.net | December 9, 2017)

Sprawling malls and commercial complexes have long become an integral part of the Philippine culture.

For many Filipino families and friends, a mall becomes a point of convergence, where friendships are nurtured, ties are strengthened among kin, milestones are aptly celebrated, and where many “firsts” often happen, be it a first date, a first movie, and the like.

This is perhaps the reason why malls in the Philippines continue to thrive and expand despite the fact that elsewhere in the world, retail shops are being shuttered due to increasing preference for online shopping.

Never had the Philippines’ mall developers been as aggressive as they are today, as they put up shopping centers not only within key cities, but across provinces as well.

Here are some of the country’s top mall developers, sharing their stories on how the local mall culture has evolved over the past 32 years.

THE DISTINGUISHED LEADER

MARIA ROWENA M. TOMELDAN
Head
Ayala Malls Group

She was a witness to the gradual, yet highly compelling transformation of the mall and retail scene in the Philippines.

Tomeldan, who has been in this business for close to three decades, recalled that in the late ’80s, malls were simply made for your basic shopping needs. There weren’t too many of these commercial centers then, and they were scattered mostly in key areas in the metro. Mall hours were also much shorter, usually ending around 8 p.m.

Sense of community

Today, the role of malls has become more substantial and was no longer constricted to housing shops and restaurants.

In the case of Ayala Malls for instance, the role of malls has largely evolved into becoming a one-stop-shop for customers, providing a sense of community, and contributing significantly to nation building in whichever district it is present.

“I’m blessed to have witnessed the evolution, how the shopping malls have evolved beyond shopping. Shopping malls have become a one-stop-shop for everything: food entertainment, wide variety of offerings, even government offices, medical clinics, services, and chapels,” Tomeldan said.

“And that’s our way of building communities. We are an important component of communities and estates because we provide shopping, food and entertainment to residents, office workers, hotel guests and even employees of industrial parks,” she further explained.

Changes

Throughout the decades, Ayala Malls had proven to be one step ahead, as it continued to raise the bar and elevate a customer’s shopping experience.

For instance, in the ’90s, the group built a huge activity center inside the mall, where various events such as free concerts, book signing sessions, meet-and-greet sessions with famous cartoon characters, job expos, and trade fairs, among others were held.

These were the so-called “extras” that are now considered “basics” by many mall goers, Tomeldan explained.

In the same decade, Ayala Malls also decided to put up restaurants along the perimeter of the mall. This means that restaurants like TGI Friday’s and Hard Rock Café can remain open much later than the mall hours. The Ayala Malls also started then the Midnight Madness Sale that kept the mall open well into the midnight.

And to help boost local communities, the group also ensures that it would invite homegrown concepts and entrepreneurs to have a space within its mall.

Meanwhile, the concept behind Greenbelt likewise made waves in the international arena, with people asking then how Ayala Malls can build an open air center in a tropical country.

Today, however, Greenbelt has since expanded, housing some of the most upscale brands available in the country such as Hermes, and a number of dining options to suit varying palates. This concept was, in fact, among those that had piqued the interest of Ayala Malls’ counterparts abroad.

All the innovations rolled out by the Ayala Malls were duly recognized abroad as Tomeldan bagged in 2015 the International Council of Shopping Centers’ (ICSC) Trustees Distinguished Service Award.

Tomeldan remains the lone Filipino mall executive to have been granted this highly prestigious accolade.

Customer centric

Indeed, the mall scene in the country remains robust and Ayala Malls is working on bringing its distinct sense of community closer to more areas across the country. The goal is to always provide a unique and rewarding experience for their customers.

“Clearly, for us, we will always strive to provide that sense of community because the Ayala Group is in the business of building integrated, mixed use developments. Second, customer centricity will always remain critical to us. And also, we will continue to strive to ensure the sustainability of our mall operations,” Tomeldan said.

“We will continue growing the business but we have to constantly innovate as the customers now have many options. Ayala Malls though has always raised the standards, from the time it had put up the activity center in Glorietta. We’re in a competitive environment and so there’s a need to raise the bar, differentiate ourselves, and set ourselves apart so our customers will continue to patronize our mall,” she concluded.

THE INNOVATOR

STEVEN TAN
SVP
SM Supermalls

Malling in the Philippines has, without a doubt, grown by leaps and bounds over the last three decades—be it in terms of size, scale, breadth, and offerings.

And if there is one mall developer that has witnessed most of these significant turning points, it would be SM Supermalls, whose first foray in this business was through the SM City North Edsa, which opened in 1985 with a gross floor area of 120,000 sqm.

According to Tan, the first SM mall initially featured an SM Department Store and the first SM Supermarket.

“Eventually, we added more retail and food and beverage (F&B) tenants. It took us another five years until SM City Santa Mesa and SM Megamall were opened,” Tan explained.

“Significantly expanding our mall footprint over the years, I feel that the tipping point towards globalization came in 2006 with SM’s 25th shopping mall, the SM Mall of Asia. With a truly iconic location, SM Mall of Asia was the biggest mall of its time at 195,000 sqm, providing a wider range of retail, F&B, leisure, and entertainment offerings,” he further noted.

Gamechanger

Tan pointed out that the MOA was a gamechanger in its own right, having changed the way people perceived and experienced malls in the country.

Currently in the process of redevelopment, SM Mall of Asia is set to further expand to a whopping 670,000 sqm upon completion, he disclosed.

Today, the country’s mall industry has indeed flourished with more entrants with varying formats and sizes to suit the changing market.

“With constant innovation and partnering with the world’s best brands, SM Supermalls has grown its premier malls—SM City North Edsa, SM Megamall and SM Mall of Asia. We also have launched upgraded malls, like SM Aura Premier, and expansion wings, such as the Mega Fashion Hall,” Tan said.

“We have made our presence felt in provincial hubs such as Pampanga and Cavite, and continue to roll out smaller centers in provincial communities. In the Philippines, we are now clocking in 66 malls, with a mandate towards 75 malls in 2018. We take pride in bringing fun and extraordinary mall-going experiences abroad with seven malls in China,” he added.

Firsts

A trailblazer in the industry, SM continues to bring in “many firsts” in a bid to allow its audience to discover and experience the bigger world of fashion, food and entertainment.

“We have championed the entry of big brands such as Uniqlo, H&M, and Crate and Barrel to name a few to spice up retail, making shopping in the country more exciting and inclusive,” Tan explained.

“SM’s dining selection has evolved with new and first-in-the-Philippines flavors, with the advent of Din Tai Fung and Tim Ho Wan among others. With the voracious appetite of a predominantly young market, we continue this thrust to deliver premiumized experiences,” he said.

Tan also pointed out that the SM Mall of Asia was designed to anchor a fully integrated development built with environmentally sustainable facilities.

Home to the E-Comm office buildings, Sea and Shell Residences, Mall of Asia Arena, SMX Convention Center and Conrad Manila, the MOA Complex is a walkable community in itself.

As part of its sustainability thrust, SM also promotes renewable energy with the installation of solar panels on the roofs of its carpark buildings. Add the fact that the Complex was constructed to withstand flooding and storm surges with its disaster resilient design, among other sustainability features.

“In our continuous efforts to support communities, SM has gone beyond property development, and has reshaped its malls to become full-fledged lifestyle cities where people can live, work and play, making each day better for all,” Tan concluded.

SHANGRI-LA’S GUIDING HAND

LALA FOJAS
EVP and General Manager
Shangri-La Plaza Corp.

Call it the Shangri-La-way of doing things, if you will.

Since it opened its doors to the public in 1991, the Shangri-La Plaza has undergone a major expansion that allowed the company to further build and grow its offerings of merchandise mix, dining options and in-mall lifestyle events and activities. This move, according to Fojas, all play into the Shangri-La Plaza experience that mall guests come back for.

“The retail scene has evolved greatly in the last three decades, and together with that, the needs and preferences of our mall goers. We are happy to note that Shangri-La Plaza has kept pace with the trajectory,” Fojas claimed.

“Our efforts have helped us remain the city’s premier luxury lifestyle destination that caters to a growing and evolving market. We now get a lot of millennials, who also tell us that they grew up in the mall or came here as children, and want to continue to experience it as adults—or, if they have their own families, share it with their kids. We get a lot of generations, from parents and grandparents, to gen X, Y, Z,” she added.

Benchmark

The goal, according to Fojas, was for Shangri-La Plaza to be able to present its customers with a “feast for the senses and food for the soul”—the so-called Shangri-La-way of doing things.

“That will always be our benchmark, and we think that has encouraged certain improvements in the retail industry in the country. We continue to upgrade our facilities, ensure safety and convenience, and provide them with a specially curated mix of tenants and merchants. A variety of consumer segments go to Shangri-La Plaza, so whether it’s the entire family or individuals of different interests and age groups, there will be something that they come to us for and enjoy,” Fojas explained.

“We are also staunch supporters of culture and the arts, and Shang Plaza has served as a venue for Filipinos to develop a deeper appreciation for these, both local and international. Our events reflect this, as we constantly strive to provide our loyal patrons with interesting exhibits—among them art installations, musical performances and entertainment, film festivals, and the like,” she further noted.

Fojas likewise pointed that Shangri-La Plaza is also part of a larger Shang community, with commercial and residential developments within it.

“Access to the mall within the community, and nearby areas have helped illustrate that city living can also be comfortable and convenient,” Fojas concluded.

THE PINOY’S LOYAL ‘SERVANT’

ARLENE G. MAGTIBAY
Commercial Centers Division GM and Senior Vice President
Robinsons Land Corp.

The Filipinos’ penchant for malls is simply undeniable.

And if the number of shopping complexes that continue to sprout across the country is any indication, then there is no question as to how much the industry has grown and evolved over the last three decades. And Magtibay can readily attest to this.

“The last three decades saw the unprecedented growth of retail real estate in the Philippines. From a handful of shopping malls concentrated in Metro Manila, the shopping center industry has grown to encompass all major cities in the country and even second-tier and third-tier cities,” Magtibay said.

“Our malls have evolved in function too. From just being places to purchase goods, malls in the Philippines are now regarded as the new ‘town plaza.’ People visit the mall not just to shop but to dine, be entertained, run their errands, go to religious services, hang out with family and friends, engage in health and wellness activities, and even transact with government offices,” she added.

Rising demand

Magtibay noted that the growing number of customers prompted many industry players to continue strengthening their brand while providing mall goers not just world-class shopping destinations but also unique mall experiences.

“The steady rise of consumer demand has been good for the industry, so much so that many new players have been encouraged to build their own malls. Along with the massive expansion program of established players and the entry of global brands, this has resulted in a dynamic shopping center industry in the country,” Magtibay explained.

With a growing presence in the country, Robinsons Malls, for one, had undeniably helped reshape the retail landscape in the country. By further expanding its footprint around the country, Robinsons malls have also helped propel growth for the real estate sector.

“Not many people may be aware that Robinsons has 46 malls all over the country, 35 of which are in the provinces. In the cities and towns where we decide to locate, we are warmly welcomed by both the local government and the populace as we help accelerate their economic progress and at the same time enhance the quality of life of the people. In 2011, we introduced our flagship public service program, the Lingkod Pinoy Center. We were the first to put together in the mall the various government agencies that the public transacts with regularly,” Magtibay claimed.

These agencies include the Department of Foreign Affairs, National Bureau of Investigation, Social Security System, Pag-Ibig, and Land Transportation Office, among others. Through such initiatives, Robinsons was able to make its malls even more relevant to its customers.

Sustainability

“Robinsons is also leading the way in sustainability programs. Aside from adopting environment-friendly designs, materials and practices, we continually work on reducing our carbon footprint by tapping solar energy. Today, Robinsons has the most number of solar-powered malls in the country including the largest rooftop solar power installation in the world,” Magtibay said.

Magtibay, however, believes that there is still a lot of room for improvement if the Philippines want to fully realize the benefits that can be derived from this sector. Given the number of challenges and issues that some developers and mall operators face, she believes that with the right action and policies in place, much can still be achieved.

“In Metro Manila and other key cities, the traffic conditions can serve as a disincentive for people to visit the mall. This can also result in more people buying online if only for the sheer convenience this affords. To counter this, we at Robinsons are striving to make our malls more entertaining and engaging,” Magtibay shared.

She disclosed that Robinsons is expanding common spaces to create more points for convergence, improving designs to have that “wow” factor, and utilizing technology to connect with the millennials and Gen Z markets.

Recently, Robinsons launched in its mall in Naga the Tree of Life, the first permanent digital art installation in the Philippines, and in Cebu, the PlayLab, reportedly the country’s first digital playground.

“The challenges will always be there but we will continue to strive to build a sense of community and make Robinsons Malls an important part of our mallers’ everyday lives,” Magtibay concluded.

THE BULLISH ‘KID’ ON THE BLOCK

EDGAR “INJAP” SIA II
Chair and Chief Executive Officer
DoubleDragon Properties Corp.

His entry definitely made the local retail scene even more exciting and upbeat.

Edgar “Injap” Sia II first made waves when he introduced to the public the now famous chicken house that is Mang Inasal. Realizing the success of his early venture, Injap, as he is widely known in the business community, is setting his sights to create developments that would revolutionize the way people see retail shopping.

Tertiary cities

“If you compare it to 30 years ago, the focus really of the developers was on Tier 1 and Tier 2 cities. In the last 15 years, we saw the expansion in Tier 2 cities including areas such as Bacolod, Iloilo, Davao and Cagayan de Oro, among others. For CitiMalls however, the focus is on tertiary cities where growth is just starting and the expansion of modern retail is about to take place,” Sia explained.

“We believe that for the past 30 years, the expansion of modern retail has really been in Tier 1 and Tier 2. As of today these two areas are almost already fully covered. So that’s why for CityMall, the goal really is to serve the needs of the tertiary cities because while they maybe considered as smaller cities they are actually more in numbers,” he added.

Sia currently holds a sizeable 37-percent stake in DoubleDragon, of which the Tan Caktiong family is a partner. DoubleDragon’s CityMall Commercial Centers Inc. (CMCCI) also has as its investor the country’s largest conglomerate, SM Investments Corp., which held a 34 percent stake in the said subsidiary.

DoubleDragon Properties opened its first CityMall in Roxas City, Capiz in 2015 and has since opened in more than 20 tertiary cities. Its vast expansion was seen by many as a strong indicator that the company is well on its way of fulfilling its promise to create and deliver 100 CityMalls by 2020.

Growing relevance

“I think CityMall’s relevance in the provincial areas is becoming more and more evident as we move forward, driven by two ongoing transitions namely the organic shift from traditional retail to modern retail in the Tier 3 provincial areas and the noticeable penetration of e-commerce in the Tier 1 urban areas of the country. In parallel, these two transitions are expected to make expansion into CityMalls more critical to modern retail tenants seeking to hedge its exposure against the disruptive digitalization of the retail environment in Metro Manila,” Sia explained.

“We expect the inflection point of these transitions to be felt within the next three years, just in time for the completion of our goal of having a strong network of 100 CityMalls in the provinces. We are glad that CityMall has started to gain significant traction in the countryside, which we aim to dominate as we grow organically. The natural but inevitable change in the provincial retail market does not happen often. DoubleDragon is glad to have had the rare opportunity to be at the forefront of the modernization of the provincial retail environment.” he added.

Spurring growth

More than anything, the entry of DoubleDragon in the countryside is seen to play a crucial role not only in catering to the market’s demands but also in catapulting growth in these areas.

“I think our group, which is currently a new kid on the block, cannot be compared to other long existing retail providers as we focus on the tertiary cities where they are not yet present,” Sia explained.

“But for the past three years, DoubleDragon has planted the seeds and necessary groundwork to enable the company to play a major role in this retail environment, as we continue to provide our valued tenants a growth platform for them to continue to expand in what will essentially be their most important market one day, and as e- commerce continues to disrupt the urban market,” Sia related.

He added: “The business model of CityMall is positioned to remain relevant beyond the age of digitalization because we focus on delivering only basic necessities, and generally, the supermarket, cinema, services and food tenants occupy more than 70 percent of a typical CityMall. CityMalls are also conveniently located in provincial city centers within close reach of its market.”

With such heavy resolve to get to where the market is and deliver what customers want, it won’t be long before CityMall is able to set the latest trends in local retail shopping.

And indeed, by presenting the right retail platform in tertiary cities, the company is able to bring in progress and elevate the quality of life of many Filipinos.

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