(Source: Business World | 17 October 2016)
Unlike Kuala Lumpur, where the Petronas Towers reign over the Malaysian capital’s bustling shopping districts, Kuching in the state of Sarawak is crammed with traditional Chinese shop houses, food hawker centers, and innumerable teh tarik stalls. In this folksy landmark, a homegrown mall is eyeing three Filipino retailers to brighten the currently dreary shopping scene, and contribute to its long-term plan of turning the historic district into an international shopping destination.
The Malaysia-based Plaza Merdeka Holdings is looking to include Filipino clothing brands BENCH/ and Penshoppe, owned by Suyen Corp. and Golden ABC, Inc., respectively, and fast-food chain Jollibee of Jollibee Foods Corp. to the tenant mix of its eponymous mall property, a company official said.
Plaza Merdeka General Manager Cheah Kheng Mun, who was in the country for a retail convention last week, was accompanied by a Filipino colleague as he tried to woo executives in separate meetings to include Kuching in their already-ongoing Southeast Asia expansion.
“As a shopping mall, we have to bring in new lifestyle fashion retailers. We realize now that our neighborhood and our business is already globalized,” Mr. Cheah said in an interview with BusinessWorld. “The important thing in a shopping mall are the tenants. What kind of branding you create (through your tenant mix) is very important. If people visit several times and see that the shops don’t change, they will look for new things. So we want to explore out of Malaysia.”
Malaysia is currently suffering an economic slowdown, though the International Monetary Fund predicted in its latest Regional Economic Outlook that the country will see a pickup in growth next year as weak external demand wanes and commodity prices improve.
Thus, Mr. Cheah targets a start of lease for these Filipino retailers in the second or third quarter of 2017, should its plans push through. The new stores should draw frugal locals back in, and attract tourists from other parts of Malaysia and beyond the country.
Chinese buyers comprise 65% of Plaza Merdeka’s total shoppers, Mr. Cheah said, while Malays and Indians trail behind, and only 0.3% is composed of “other races.” But unlike mainland Chinese buyers, who are seen in the retail industry as brand-conscious, Mr. Cheah said that Chinese Malaysians are “smart buyers.”
The products of BENCH/ and Penshoppe, he said, have a better quality than those of Western “fast fashion” brands, and are sold at a cheaper price. Styles created for the Filipino body type and taste, at the same time, should fit Plaza Merdeka’s Asian shoppers, he said. By that standard, Filipino consumer brands will sit well with the firm’s predominantly Chinese market and can thrive amidst the mall’s other tenants.
Aside from H&M, Plaza Merdeka houses the biggest Cotton On branch in Sarawak with two levels in the same mall. But instead of bringing in more international retail giants, Mr. Cheah chose to explore the more low-profile BENCH/ and Penshoppe. “People will be curious,” he said.
Meanwhile, Jollibee’s menu, which offers an eclectic mix of Western dishes accompanied by the Asian staple of rice, will suit the taste of Malaysian diners. The aroma of Chickenjoy may also lure the Filipinos living in Kuching at about 1,300 by the Philippine Embassy in Kuala Lumpur’s count.
Jollibee has already succeeded in nearby Borneo with 13 branches in Brunei, a key market, but has yet to expand in East Malaysia. Mr. Cheah has also dined at the Jollibee branch in Singapore’s Lucky Plaza and was impressed.
In particular, he noticed that all Filipino stores — whether abroad or in the Philippines — are consistently staffed by friendly people. Mr. Cheah has the impression that the Filipino brand of customer service will make their stores shine in a Malaysian mall.
Under Mr. Cheah’s watch, Plaza Merdeka won “The Innovative Shopping Centre Award” by the 19th Malaysian Tourism Award, which recognizes shopping and retail outlets that make Malaysia an international shopping destination.
“They will serve as an example to our locals — retailers and customers — and will set a benchmark,” he said. “They might say to themselves, ‘The people from that overseas brand are so good, we have to improve ourselves.’ And as a mall, we are all encouraged to improve together.”
– By Pola Esguerra del Monte