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Monday, October 18, 2010

1M’sia Mall project draws mixed responses

PETALING JAYA: The 1Malaysia Mall project proposed under the Economic Transformation Programme (ETP) has drawn mixed responses from retailers and property consultants.

The plan is part of the Government’s initiative to push Malaysian mall operators and retailers to expand overseas and export Malaysian management expertise.

“It is still too early to determine if 1Malaysia Mall is a viable concept. The whole process will take four to five years from site selection, market research, planning, financing, construction, leasing to completion. I encourage the private sector to work with the Government to establish this mall,” Retail Group Malaysia managing director Tan Hai Hsin said in an e-mail reply to StarBiz queries.

Retail Group Malaysia is an independent retail research firm in Malaysia.

Tan suggested two other strategies to help Malaysian retailers expand overseas.

“First, the Government trade agencies in various Asian countries can assist Malaysian retailers who lack the experience in overseas ventures to find local partners (via joint ventures, licensing or franchises) and to introduce them to first-tier or Grade A shopping mall owners in various Asian countries,” he said.

He said there was such an agency in Singapore called International Enterprise Singapore. “Its office in Kuala Lumpur assists Singapore retailers in finding local Malaysian partners and organising meetings with shopping mall owners in Malaysia,” he said.

Second, he said the Government trade agencies in developed countries could assist Malaysian retailers in penetrating First World countries such as Japan, South Korea, the United States, Australia and Britain.

“These countries have mature retail markets and large populations. It is difficult for our retailers to succeed in these markets on their own without some assistance from our Government,” Tan said.

“Government agencies like Malaysia External Trade Development Corp have many offices around the world. A retail unit could be set up in each of these offices for the above two purposes,” he added. The Government’s plan is that by 2020, there will be 21 1Malaysia Malls in the regional emerging markets, starting with Vietnam and continuing to China.

1Malaysia Mall will house Malaysian retailers and food and beverage operators under one roof to cater for these emerging markets whose population has not been exposed to integrated shopping as retail is dominated by street shopping. CB Richard Ellis (M) Sdn Bhd managing director Allan Soo viewed the idea of 1Malaysia Mall as not being practical.

“Although the idea of opening malls to sell Malaysian merchandise in the region sounds good, I think the flaw is that our merchandise lacks breadth, depth and is not of top grade A positioning nor branding,” he told StarBiz in an e-mail.

“We do not have a lot of shoe brands nor fashion brands for instance, compared with Thailand. To fill a typical mall of 500,000 sq ft, we need at least 200 shops. If all these shops stock Malaysian brands, we will have an issue filling up with a full range of merchandise that is really Malaysian and interesting enough to draw the crowd,” he said.

He also said having so many Malaysian malls overseas might mean tourists need not come to Malaysia to shop. Soo is involved in retail development consultancy and leasing as well as property market research. Meanwhile, the Malaysian Retailer-Chains Association (MRCA) applauded the proposed 1Malaysia Mall as it would give more business opportunities to all involved in the industry.

President Datuk Tay Sim Kim said MRCA as the leading retail-chain association in Malaysia was receptive to having a regional presence for 1Malaysia Mall.

“The 1Malaysia Mall concept will provide the opportunity for retailers, operators and the Government to pool their resources together in leveraging the best business deals for their respective companies,” he told StarBiz in an e-mail. He added that local licensing, rental and other local issues might affect retailers if they were to expand to the regional market on their own.

“1Malaysia Mall would also enlarge retailers’ market penetration and enhance growth, thus bringing back more revenue. MRCA members will continue to strive for excellence in their products and services, making Malaysian brands known abroad,” he said.

By The Star

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