Leveraging CapitaMalls Asia’s Expertise to Enter New Markets
Singapore retailers venture overseas with giant mall developer
Issue: Nov 2010
Singapore retailers on a feasibility study trip to CapitaMalls Asia’s Jinniu Mall in Chengdu
Bigger markets, better opportunities and greater growth – the overseas markets brim with prospects for local retailers. That was what struck Singapore jewellery retailer, Soo Kee Group, when it embarked on a feasibility study trip to Beijing and Shenzhen in 2008 with CapitaLand Retail, now known as CapitaMalls Asia Limited (CMA).
“We witnessed the abundance of opportunities in China and the potential of the market,” says Angelina Lau, Deputy General Manager of Soo Kee Jewellery. “The study trip also provided us with a platform for retailers to learn from one another’s experience in conducting business in China, which we found very beneficial to our China venture.”
Soo Kee Group seized glittering opportunities in overseas markets
Today, Soo Kee Group has a presence in three CMA malls in China. “CapitaMalls Asia provided Soo Kee with a platform to propel our brand into the China market. The professionalism of the team at CMA enabled plans to be executed in a very organised and swift manner,” says Lau.
Soo Kee Group also operates in three CMA malls in Malaysia. In Singapore alone, Soo Kee has 16 outlets in CMA malls under its key brands: Soo Kee Jewellery, SK Jewellery and Love & Co. Having a long term tenancy relationship with CMA in Singapore has given them the added assurance to take the leap abroad.
This is especially so when foreign regulations can prove daunting at first. CMA has stepped in to ease the teething issues. “CapitaMalls Asia representatives assisted us in many ways to reduce the impact of the new challenges. With some trusted local contacts provided, we were able to kick start our operations in China,” Lau commends. “CapitaMalls Asia is one of our important strategic partners in our overseas ventures.”
Insightful overseas study trips organised by CapitaMalls Asia and SPRING Singapore enable retailers to gain a first-hand understanding of the overseas retail market
Bridging Gaps, Opening Doors
As CapitaLand celebrates its 10 successful years in business this year, the Group also celebrates its tenants’ success stories overseas.
Over the last three years, CMA has stepped in to bridge the gap and open the doors for Singapore retailers who dream of expanding overseas. The feasibility study trips it co-organises with SPRING Singapore have been instrumental in the process, according to Chng Chet Siew, Senior Vice President of Regional Investment and Asset Management, Leasing of CMA.
“These feasibility study trips give tenants confidence in us as a landlord. During these trips, they witness for themselves that we have been able to bring our best practices in mall management overseas. Through these trips, they are also able to understand the overseas markets better.
“For those tenants who are fully convinced after the trips, we will then follow up with them to identify suitable malls based on their brand’s positioning, price point and mall tenant mix that will give them the synergy as our malls are wide ranging in terms of market positioning,” Chng adds.
For the Managing Director of M)phosis, Hensley Teh, the study trip was a turning point in the brand’s expansion plans. He was impressed with how well-run CMA’s overseas malls were. Some of the malls were even drawing M)phosis’s target clientele of young working women. The trip inspired Teh to set up M)phosis’s first shop in China in Raffles City Beijing.
“The trip really helped us to gain confidence. I was truly impressed by the organisation and management of those malls. We probably would still not have established a presence in China if it wasn’t for the help we received,” Teh shares. “The whole process of starting up in China, in Raffles City, was expedited because of the qualities we’ve come to expect from the Raffles City brand.”
Indeed, Teh’s testimony is a reflection of the effort CMA takes to ensure the success of tenants’ expansion overseas; from introducing relevant overseas consultants to tenants, conducting further market research prior to expansion, to even going the extra mile for the tenant once a decision is reached.
Challenger Megastore at The Mines is the largest IT megastore in the whole of Malaysia
For instance, when IT megastore Challenger set up its first Malaysia branch, a 30,000-square-foot store in The Mines in Selangor, Chng’s team even helped with recruitment and promotions.
“CapitaMalls Asia has been supportive in assisting and working with us to overcome many issues. We are appreciative of the support given to us and efforts put in,” says Business Director of Challenger Technologies, Tan Wee Ko. “CapitaMalls Asia has a very good track record in operating retail malls in Singapore. That’s why Challenger believes that CapitaMalls Asia would also be able to make its overseas malls equally successful.”
Expanding the Comfort Zone
In the span of a decade, the number of CMA malls has increased by more than ten-fold from seven to 89, making it Asia’s leading shopping mall developer, owner and manager. Many Singapore companies have grown alongside and successfully spread their wings overseas; riding on the confidence they have in CMA due to their positive experiences in Singapore with CMA.
Take Aussino, a leading designer, manufacturer, wholesaler and retailer of home fashion textiles, which has seven retail points of sales in overseas CMA malls, for instance. “Given the successful partnership we have built over the years in Singapore, expanding overseas with CapitaMalls Asia was a very natural choice for AUSSINO,” says Jonathan Lim, CEO of Aussino Group.
Aussino’s stores in Wangjing and Cuiwei Malls in China
Lim further elaborates on Aussino’s confidence in CMA’s local expertise and presence to bring his business forward. “With CapitaMalls Asia, we are assured of their commitment in creating a winning retail environment for their malls. Factors such as accessibility, foot traffic and quality tenant mix are of their utmost priority and integral in creating their winning formula,” he notes.
He adds that working together has been a synergistic experience, because “CapitaMalls Asia is very committed to keeping things relevant for the consumer and willing to invest in enhancing the consumer experience at all their malls.”
PastaMania in Malaysia carries the Singapore brand with pride and looks forward to greater expansion
CMA’s continual efforts in mall enhancement also did not go unnoticed by Rashid Hassan, CEO of PastaMatrix International which operates 40 PastaMania outlets worldwide. He notes, “Based on our experience in Singapore, we are confident that CapitaMalls Asia will add value and improve the malls that they manage. We have since seen such asset enhancements being made in both Gurney Plaza and Sungei Wang Plaza.”
Rashid’s confidence in CMA is also largely founded on familiarity. “It is very comforting to collaborate with a partner whom we are familiar with because expanding overseas is a highly risky business,” he comments. “Due to CapitaMalls Asia’s familiarity with us in Singapore, they know our business concept and USP well. It makes it much easier for us to present our proposal and convince them that we can add value to their mall.”
Pet Lovers Centre expands overseas on recommendations from CapitaMalls Asia
It is evident that CMA’s success is largely attributed to the relationship it has established with its tenants. As Ng Whye Hoe, Managing Director of Pet Lovers Centre puts it, “We tend to be more comfortable with CapitaMalls Asia as we have an existing relationship with them in Singapore. We understand each other’s expectations and the mutual trust is important. Since they are familiar with us and our trade, they will recommend the more suitable malls for us to be in. So far, they have been quite spot on!”
Ng adds, “Our learning curve is shorter with CapitaMalls Asia as our landlord, and we will always have that ‘peace of mind’ in doing our business within their premises. In some locations in a foreign country, we cannot just take that for granted.”
A Leap of Confidence
While foreign markets may be a daunting venture for F&B operators due to differing tastes and cultures, Kopitiam Group has taken a leap of confidence by opening its first and only overseas outlet with CMA, in Qibao Mall in Shanghai.
Managing Director Alden Tan Siang Hin, Managing Director of Kopitiam Group, shares, “Our challenges are mainly related to understanding the local food culture and environment.”
Kopitiam in Qibao Mall in Shanghai
But he adds that the brand exposure in Shanghai is intangible. More importantly, the faith in CMA overrode any doubts along the way. “When we decided to expand overseas, we wanted to partner with a developer that is reputable for its business stability and ability to ensure profitable opportunities. Our experience with CapitaMalls Asia in Singapore has been fruitful. This gives us the confidence of working with CapitaMalls Asia overseas. We have just renewed our lease in Shanghai, so it expresses the confidence we have in CapitaMalls Asia!” he shares.
Foreign expansion can be overwhelming but, as evidenced by the positive experiences of the retailers, CMA helps its tenants soar to greater heights in their overseas ventures with confidence.