PETALING JAYA: Shopping malls face a challenging year ahead, as more new outlets open their doors amid weaker market sentiments that have affected some newer and smaller centres.
However, Malaysia Shopping Malls Association adviser Chan Hoi Choy said he still expects to see positive retail growth, albeit at a lower rate.
“Malls remain largely resilient although they will need to renew, refresh and regenerate to remain competitive,” he told FMT, adding that this was especially the case for older malls.
“Some newer and smaller malls are struggling to achieve footfall and sales,” he said, pointing to intense competition as the main issue.
According to Chan, there are now 671 malls nationwide, including several big malls which opened this year like Toppen, iCity Central, MidValley Southkey, KL East Mall and the Sunway Big Box Retail Park.
He said 12 new shopping and hypermarket complexes, mostly in Johor, had been completed as of the first half of 2019.
From the second half of 2019 until the end of 2020, about 40 new malls are expected to be opened.
He acknowledged that some malls, such as Mara Digital Mall in Johor, had been closed this year, but said this was because they were earmarked for other developments.
“The closures we heard about were the closure of shops or stores. Most of the closures this year come from international retailers, supermarkets, hypermarkets, and food and beverage (F&B) chains rather than malls.”
Chan said 2019 had been characterised by economic volatility from the rising prices of goods, the US-China trade war and weaker consumer sentiments.
But, he said, the biggest challenge facing malls and their tenants was the tendency of consumers to view products and services as a commodity.
This, he added, could lead to such services being easily replaced with online shopping.
He advised malls and retailers to incorporate intrinsic brand values in their products, and to differentiate themselves by, among others, the provision of more services and facilities in order to remain relevant to their target market.
He also predicted that the coming year would remain challenging for the retail business although he said some sectors, such as F&B, would continue to thrive.
He said F&B makes up 20%-30% of shops in some malls, and that the figure is still growing.
“We are also going to see more traction in Asian brands,” he said, adding that these have been making significant inroads across the globe.
Other increasingly popular trends in malls are co-working hubs and experiential businesses such as e-sports, extreme sports, and themed playgrounds, he said.