ICONSIAM, Bangkok’s newest mega-mall — an ultra-luxurious shopping complex. Photography: ICONSIAM
The evolving retail mix and the impact of e-commerce on retail malls are not solely unique to Singapore but are also happening regionally and globally.
In this insight, we delve deeper into the key differences as well as the critical success factors between mega-malls and community malls in Bangkok.
Costing some S$2.0bn and six years later, ICONSIAM opened on 9 November 2018. A 750,000 sq m (or 8m sq ft) mixed-use development comprising two luxury residential towers and Bangkok’s largest shopping centre offering 525,000 sq m (or 5.6m sq ft) of gross retail space. This destination retail precinct was uniquely developed using the “creating shared value” and “co-creation” concepts which involved the collaboration of many stakeholders including tenants, communities, artists, designers and other partners across Thailand. In addition, ICONSIAM was awarded the World Retail Awards 2019 for Outstanding Store Design (>1,200 sq m).
Key retail mix, experiential and activity-based concepts / stores, key features / attractions include:
- More than 500 retail shops and 100 restaurants;
Some of the largest flagship stores in ICONSIAM include Takashimaya and Apple. Photography: Takashimaya, Apple
- Key new-to-market brands and flagships included Takashimaya (36,000sqm or 387,500 sq ft), Apple, @Cosme, Urban Revivo, JD Sports, Nike Kicks Lounge, Jumbo Seafood;
ICONLUXE is the heart of luxury in ICONSIAM, dedicated to premium commodities from all over the world. Photography: ICONSIAM
- ICONLUXE – a 25,000 sqm (or 269,100 sq ft) super luxury pavilion comprising many of the world’s ultra-luxury brands that offers at least one unique product that is not available elsewhere in Thailand as well as one-of-a-kind in-store experience via their brand stories;
SookSiam: a massive shopping destination being built on the banks of the Chao Phraya River
- SookSiam – spanning 16,000 sqm (or 172,200 sq ft), this indoor floating market is Thailand’s first co-creation space for the local communities from 77 provinces of Thailand and is also a global platform for the marketing and development of local products. Additionally, about 10 per cent (or 300-400) of the 3,000 local entrepreneurs will be rotated annually to provide diversity and opportunity for the region’s local communities;
Taking up the 4th and 5th floor of ICONSIAM, ICONCRAFT features modern Thai crafts made by locals. Photography: Siam Piwat
- ICONCRAFT – 2,500 sq m (or 26,900 sq ft) of space showcasing local art pieces and contemporary craftworks as well as a craft corner offering activities and workshops;
- Thailand’s first world-class heritage museum of some 8,000 sq m (or 86,100 sq ft) showcasing many priceless artworks and masterpieces;
- TRUEICON HALL a first-in-Thailand ultra-hybrid meetings, incentives, conferences and exhibitions (MICE) venue with 12,000 sq m (or 129,100 sq ft) of space and a capacity of 3,000 seats; and
River Park – 10,000 sq m (or 107,600 sq ft) of open community space along the Chao Phraya River.
In contrast to mega-malls, community malls in Bangkok tend to be much smaller, open-air and offer more localised and intimate experiences. The emergence of community malls began sometime in 2004 with the opening of J Avenue in Thong lor, which is considered as one of the pioneers. Since then, community malls have grown rapidly in the Greater Bangkok area due to their lower barriers of entry and more affordable land costs, although their proliferation has led to several malls failing as well.
While there is no standard definition for community malls, they are typically located outside and on the outskirts of Central Bangkok, surrounded by a sizeable residential community, about 50,000 to 70,000 sq ft in gross leasable area, with a retail mix largely F&B centric; 20 to 30 per cent services; and the remaining offering other retail services such as supermarket, fitness centre, early education. In 2018, community malls accounted for some 14 to 15 per cent of total retail stock in Bangkok.
Community malls: The Commons
Featuring the overall façade of The Commons at Thong Lo. Photography: Ketsiree Wongwan
Chasing sunsets at Thong Lo’s loft-like community mall. Photography: Ketsiree Wongwan
One of the most notable developments that has won many accolades is The Commons in Thonglor, one of Bangkok’s trendiest neighbourhood. Opened in February 2016, The Commons has been shortlisted for the World Architecture Festival awards in 2016/17 for its unique design and ability to attract footfall to upper levels.
In terms of tenant mix and key features, this four-storey mall has 5,000 sq m (or 53,800 sq ft) of gross floor area with about 40 per cent of space (or 21,500 sq ft) leasable and the rest allocated to open communal uses including family-friendly play areas and space for weekly and regular events and activities such as cooking workshops, live music and community gatherings. In addition, the mall owners through various activities and events in collaboration with different non-profit organisations to give back to the community.
Roast at The COMMONS remains as one of Bangkok’s most popular cafes today. Photography: Ketsiree Wongwan
More than 70 per cent of tenants are quality and boutique F&B retailers. In particular, the top floor is occupied by one of Bangkok’s most popular cafe, Roast. The remaining tenants comprise a supermarket, services and education, as well as fitness outlets and studios.
The ever-changing retail landscape
Despite the exponential growth of e-commerce, brick-and-mortar retailers continue to account for at least 95 per cent or more of retail sales, underpinning their importance and relevance to the retail sector locally and globally. Locally, the REIT-managed malls have been so far successful in repositioning their retail mix with the introduction of more experiential and activity-based retail, and now non-retail attractions, to boost footfall, maintain high occupancy with the view of increasing tenants’ sales and operating profits.
Key emerging and established trends based on the Singapore REIT malls and case studies above include:
- Increased diversity, quality and niche F&B offerings, as F&B is increasingly becoming a critical success factor of the overall retail mix, especially enhancing and preserving the community and social experiences;
- Offering unique products and experiences with more new-to-market brands, flagships and concept stores;
- Integration of omni-channel strategy (offline-and-online) to provide more seamless, holistic and personalised customer experiences. This is also augmented with the greater use of technology via loyalty apps, data and video analytics, and logistics;
- Provide a platform that allows small and local entrepreneurs the opportunity to showcase new / unique products with flexible terms and tenure;
- Greater shopper and community engagement through various activities, events, workshops and gatherings through activity-based retailers and non-retail attractions / public open communal spaces, especially with health and fitness, and athleisure gaining popularity;
- Access to a sizeable resident catchment both on-site and off-site to activate the precinct through the day; and
- Lastly, non-rental revenue such as advertising on the mall’s website and / or within the mall are growing as part of the mall’s alternate revenue stream.
Despite the trend of retail malls offering more experiential and activity-based retail to win back and gain new customers, it is still too early to ascertain if the incorporation of non-retail attractions and allocation to more communal and open spaces will deliver higher spending and profitability amid the higher footfall, especially for the new retail malls once the novelty wears off.
Although today’s shoppers more discerning, they are willing to pay for enhanced, unique, personalised experiences, engagements and outcomes that differs from online transactions. Hence, the retail landscape has to continuously evolve, innovate and engage with their customers and community.