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THE NEW HYPE ON COMMUNITY MALL

Community malls or lifestyle malls have become one of the most prominent projects for real estate d e v e l o p e r s s i n c e 2 0 0 8 . Community malls have gained popu lar i ty due to l i fes ty le changes of modern day Thais w h o d e m a n d g r e a t e r convenience. While Bangkok city is notorious for its high traffic, Community malls have gained popularity because modern day Thais prefer easy living, quicker and easier physical access to dining and shopping, and easy-to-find parking spaces. It is no surprise that these malls have become the first choice as a hangout place.

Today, community malls take up 11% of all retail markets which is almost the same size as that of

the hypermarket share. It is e x p e c t e d t o o v e r t a k e hypermarket share in number of outlets by 2014 retail market report half year 2013 (Source: Colliers Research) Due to city zoning restrictions, big retailers find it difficult to open large shopping malls and hypermarkets in the city area. While increase in housing projects, roads and shortcuts in these residential a r e a s h a v e b o o s t e d t h e convenience behind going to these community malls hence, making it not only a feasible cho ice fo r consumers but a t t r a c t i v e f o r r e a l e s t a t e developers who are confident of their success. An added benefit for rea l estate deve lopers investing in community malls is that these malls are more cost-effective to maintain than big retail outlets located in urban areas. Therefore, it is no brainer for more and more real estate

developers to penetrate and saturate this market.

KEY RETAIL DEVELOPERS

The biggest and first mover to penetrate this market is Siam Future Development (SF) being in the industry for more than 20 years. The first community mall by SF, Market Place Bangbon was up and running since 1995 to provide essential products and services such as restaurants, supermarkets and bank ing services. Community mall started to gain popularity since 2005 after the launch of J-Avenue; Japanese lifestyle mall. J- Avenue is favored due to its right concept - it was built at the right place and at the right time. It was built when Japanese res idents started occupying the area and Japanese culture and cuisine was extremely well-received among Thais.

J Avenue is the second modern community mall in the area to service affluent residents in Thonglor after the Thonglor Market Place built by SF in 2003. Nevertheless, because it’s the first Japanese concept mall in Bangkok, it attracted people from all over Bangkok and became quite the “It” place in Thonglor. Following the success of J-Avenue, all community malls built had a clear concept that was localized to target that particular residential area.

SF was a monopoly in the community mall industry for a decade before KE land developer built The Crystal Shopping mall . The Crystal Shopping Mall located in Ekamai-Ramintra is a crowd-pleaser for residents in the area. KE has stirred a dramatic shift in

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WHAT IS COMMUNITY MALL?

There is no single definition. Generally, it is a mall situated in residential areas, especially in the suburbs, contain all the shops and services that people need in their daily lives.

However, in Thailand, this concept does not apply. This is because community malls are located also in the City and serve loose groups of shoppers, but not genuine communities. We can distinguish hypermarket from community mall by looking at the size and design.

customer expectation for lifestyle m a l l f r o m b e i n g j u s t a convenience for residents to accommodating luxury, design, ambiance and atmosphere so c o n s u m e r s a r e g i v e n multidimensional experience in their residential area. The Crystal Ma l l f ea tu res a Ca l i f o rn i a landmark with well designed wa l k i ng s t r ee t s mak i ng i t appealing not only for residents in the area but it attracts people from all over Bangkok as well as tourists.

In close proximity to the location of The Crystal Shopping Mall, SF launched a competing lifestyle mall called La Villa adjacent to Ari BTS Station. The first modern greenery mall, it offers trendy products and services that are fit for a cosmopolitan area. Its key selling points are its convenient locat ion and i ts d ist inct ive greenery setting making it just as sough t -ou t fo r a s C rys ta l Shopping Mall.

Both small and big real estate developers have built around 21 community malls between 2007 to 2010. Between 2007 to 2010 alone, SF had already built a total of three community malls which are La Villa in 2007, Major Avenue Ratchayothin in 2009 and Nawamin City Avenue in 2010. All of these malls are popular due to it’s catchment area - a good location and a good residential population mix.

From 2010 to 2012, Community malls industry had attracted both big and small players making the market saturated. Many land developers including TCC land, Property Perferct, Sena Villa Group, and MBK Group have built these lifestyle centers targeting local residents.

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Year Leading Community Malls

Developer

1995 Market Place Bang Bon

Siam Future Development

2003 Thonglor Market Place

Siam Future Development

2005 J - Avenue Siam Future Development

2007 The Crystal Shopping Mall

KE Land Developer

2007 La Villa Siam Future Development

2010 Nawamin City Avenue

Siam Future Development

2011 Amorini AMR Development

2011 Chocolate Ville The chocolate group

2011 Rain Hill Boutique Group

2012 Park lane Gelson Development

2012 The Promenade Siam Retail Development

2012 The Nine MBK Group

2012 The Portico-Langsuan

Portico Property

2012 The Walk Index Group

2013 Pickadaily Areeya Property

2013 W district lifestyle mall

W Property

2013 Kurve 7 Kurve 7

2014 Chic District Ram 53 Major

2014 Vue Lifestyle by The River

Raimon Land

*Remark : These lists of malls are malls that mentioned in the article that influenced the development of community malls market

Sena Development became a key player in community mall opening five projects by the end of 2013. SENA fest, the first of the five is up and running in a prime location in Thonburi area. It’s success is due to a big enough resident population in the area which includes existing residents and newly erected condominiums located next to the Chaophraya river.

DESIGNS AND CONCEPTS

With Crystal Mall as the role model, community malls built in 2012 are ra is ing customer expectations in terms of design and ambiance. For instance - The Park Lane in Ekamai features a roman style architecture, The

Promenade on Fashion Island has a European Landmark and Amor in i on Ramintra Road features a recreation of Santorini landmark from Greece. Further, Festival Walk Mall located on Nawamin road has recreated the antique European landmark and Chocolate Ville located in the same area features a popular landmark and design resembles that of a western village. Their concept is to be a one stop dest inat ion of internat ional eateries; their concept is very successful that so many people dr i ve for a v i s i t i nc lud ing foreigners.

Now, most players compete on architecture design featuring either either a unique famous landmark or distinctive concept. The only outstanding mall that

adopts the retail function as a key competitive advantage is Crystal Design Center, the same owner with The Crystal Shopping Mall. Crystal Design Center features itself as a center of design and home decoration showroom. Keeping La Villa, Festival Walk and Chocolateville in mind, the trend t owa r d s c ommun i t y ma l l s adopting a greenery landscape is highly appreciated trend because modern day consumers are looking for a place to relax without having to drive to the country side. To emphasize, it is a hideaway from the hustle and bustle of the city yet located in close proximity to that of the urban area.

Another concept community mall, Rain Hill which was launched in 2012 imitates the freshness of forest hill while at the same time featuring a modern architecture making it apt for it’s location in a cosmopolitan area of Sukhumvit 47. The Nine neighborhood center is launched by MBK Group, located at Pharam 9 road w i t h t h e f r e s h g r e e n e r y l a n d s c a p e . “ T h e P o r t i c o - Langsuan”, also launched in 2012 has a green concept but is located in the heart of business district (Chidlom). Most greenery-s ty l e ma l l s a lways inc lude Japanese restaurants because Japanese cuisine is celebrated among Thais. In close proximity to J-Avenue, TCC land opened Japanese lifestyle mall, Gateway Ekamai in 2012 to go with the popular Japanese trend. The motivation for building lifestyle malls for real estate developers is the city zoning restrictions that make it difficult to open large shopping malls in town, hence making lifestyle malls a more feasible outcome even in urban areas.

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COMMUNITY MALL CONCEPTSKey concept Descriptions ExampleJapanese lifestyle

Is the concept that use Japanese restaurants and decoration as a key theme

Thonglor Market Place, J-Avenue, Gateway Ekkamai

Roman Style Architect

Is the concept that use the famous scenery and landmark; especially European landscape as a key theme

The Crystal Shopping Mall, The Park Lane, Chocolate Villa, The walk, Amorini, The promenade

Green concept

Is the concept that use the freshness of greenery concept as a key theme

The Portico Langsuan, Rain Hill, La Villa

Lifestyle & Entertainment

Is the concept that focusing on store varieties and convenient location

Nawamin City Avenue

Condo - Community Concept

Is the concept of community that come with condominium; the theme is vary

The Pickadaily Bangkok, W-district, Chic District Ram 53

24hours Concept

Is the concept focusing on time convenient like 7-11

W-district, The Kurve 7

COMMUNITY MALL GROWTH TO CONTINUE AT MODEST PACE

According to research by Colliers International (Thailand), all newly completed facilities of retail expansion in the second quarter of 2013 were community malls. The number of community malls has soared from 30 malls in 2010 to almost 100 malls in 2013.

This shows that community malls market has shifted from the growth stage to the maturity stage. However, most of them are in the suburbs area, due to the expansion of residential projects along the suburbs area such as Rachapruek, Kaset-Nawamin, Ramintra, Praram 2, P r a r a m 3 a n d B a n g n a . Particularly, Ratchapruek, the center of western Bangkok has a catchment of over 100 residential high-end projects or 50,000 households with high purchasing power.

With the announcement of the road expansion with over 80,000 cars transported daily and this area is going to be a new econom i c deve l opmen t o f Thonburi area. Now, five popular projects are located in this area; Homepro, Homeworks, The Walk, Pureplace and The Circle. The Circle; claimed to be the biggest community malls features a fusion of Thai heritage and modern European design with over 200 retailers.

Similar to any product in the maturity stage, variety and features are added to make it more interesting and increase sales. The Walk is the first indoor community mall with a recreation

of Santa Monica landscape and is a mix format between being a furniture outlet, Index Living Mall and it houses a variety of dining outlets, local shopping outlets and supermarket. Similarly, The Paseo is a mix format of being a car showroom while also featuring a number of restaurants and is located on Onnut road since 2009.

Another much more appreciated feature added to the community malls are pub and bars notably, The Portico Langsuan features ChocoBar while The City Viva features WooBar.

RESIDENTIAL CONDOMINIUM + COMMUNITY MALL CONCEPT IS ON THE RISE

The innovative concept is real estate developers are including Commun i t y Ma l l s t o t he i r Condominium building projects. Ove r 10 new condos tha t included community malls were up and running in 2013. One of

the distinctive concept is The Pickadaily Bangkok community mall which has an English old town architecture design located next to A Space Me condo in Sukhumvit 77. Another novel concept is community malls being built on Bangkok University Campus by SF.

The intensity of the competition is fierce as Community malls are imitating the 24 hours availability 7 -11 bus i ness mode l . Fo r instance, “W district lifestyle mall” within the high rise condo project on Sukhumvit road has a direct sky walk from the condo to the mall will be open 24 hours again. The Kurve 7 located at Bangkapi a l s o p r o m i s e s 2 4 h o u r s availability, hence showing that this could be another valuable feature for community mall.

In 2013, SF announced the plan to develop over 10 community malls in suburban area in the next 5 y e a r s . T h e y a r e a l s o cooperating with LPN condo developers to co-project on building condos with community malls.

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Future Supply Cumulative future supply in bangkok by year and category, 1Q 2014

Source: Colliers International Thailand Research

CUSTOMIZATION STRATEGY IS THE KEY SUCCESS FACTOR

The key success factor adopted by SF in ensuring the popularity of i t ’ s communi ty ma l ls i s customization strategy. There is n o c o mm o n p l a n f o r a l l community malls, one strategy may work in one place, while others may require a different strategy. It is certainly all about localization and studying the residential population in the target area.

The concept, design and tenant mix of the community mall should match the class and lifestyles of the community it is serving. Despite reaching the mature stage, a leading player in the industry confirms there is still r o o m f o r g r o w t h i n t h e community malls market.

The key in such an industry is innovation and mix community mal ls format that cater to consumers convenience and exceed their expectations by offer ing a mult id imensional experience while at the same time matching the needs of the residents in that catchment area.

The ABAC polls concluded that that consumers have positive

attitude towards community malls because of its superior design and it has better location than big retailers. A concept that is certain to steal the market share from big retailers, it has already changed the lifestyle of Thais. Indeed a dramatic shift as it changes shopping experience from being indoor to outdoor. The developers are now targeting more tourists to increase their customer traffic. In the future community malls will not only s e r ve t he r e s i den t i n t he community area, but will be a tourist destination welcoming AEC era.

IN A NUTSHELL

Altogether, community malls are everywhere! Along the lines of the BTS, the city areas, near old residential areas, new residential areas, building around housing projects that are yet to be completed, as a condominium f a c i l i t y , w i t h i n u n i v e r s i t y campuses and even outskirts of Bangkok! Yet there is still room for more, Why?

The key success factor to e n t e r i n g t h i s m a r k e t i s convenience, design, atmosphere and multidimensional experience that match or even better exceed consumer expectations! One food for thought?

A new community mall that is about to open will include a Cinema. Imagine having a cinema and pub or a bar within walking distance to your home.

ABOUT AUTHORS

Godchapan Suthisopapan is a full-t im e Bu s i n e s s An a l y s t a t Canvassco with a strong passion on retail business landscape. She works with clients in the retail i n d u s t r y , h e l p s t h e m t o understand innovative retai l business models and retail customers behaviors. Godchapan is specialized in in-depth discussion and qualitative analysis. She also works with client from agriculture industry for B2B market research. Feel free to contact her at gsuthisopapan@canvassco.com

Navneet Madan is a full-time Sen ior Pro ject Manager at Canvassco. She is a young ma rke t i ng en thus i a s t who performs the role of Business Consultant, Project Manager and Part-time Writer. She has over five years experience in content marketing specifically for mobile and digital data management. Navneet is also a copy editor who takes boring topic and turn it into story-telling content. Feel free to contact her at nmadan@canvassco.com

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