Is the Philippines emerging as a world leader and trendsetter in shopping malls? The unprecedented boom in consumer spending here and robust growth in new malls offer SME entrepreneurs many new opportunities to enter into or grow their existing retail, fashion, entertainment, food and other businesses. Tourism growth will also benefit from and boost this rise of competing malls nationwide.
NEW RIVALS TO SM, ROBINSONS & AYALA RISING
The SM malls of the Henry Sy family, the Robinsons malls of John Gokongwei Jr.’s family and the Ayala malls of the Zobel clan are world-class, not only in sheer physical size but also in their continuously improving quality. SM Prime now has 50 malls and will be opening four to five malls next year, including new shopping centers in Cebu and Cabanatuan, as well as the expansion of its Baliwag mall.
Former Senate President Manny B. Villar of Vista Land told me that he is now accelerating expansion of his retail businesses. Three years ago he said that his target was to have 100 commercial centers upon his 10th year in retailing, which is 2021. He’s planning to spend P15 billion in the next five years to grow Vista malls and also Starmalls, a listed firm that took over the then-ailing Manuela malls of his wife’s family in 2011, and paid off Manuela’s debts. He added: “Among all tycoons in the Philippines, I truly admire and like Henry Sy.”
In an exclusive interview, Villar revealed that his All Value Holdings Corp. (which he hopes to list) will expand his All Day convenience stores to 90 outlets by the end of 2014; he also hired French executives from Carrefour to expand his All Day supermarkets. He also wants to grow his All Shoppe department stores.
I heard rumors that he is also planning to enter the hospital business, similar to the groups of Manny V. Pangilinan and Ayala, and that he also plans to venture into tourism. Villar smiled and replied: “Yes, I’m interested in those industries, but for now my real focus is to grow our malls and other retail businesses, because I foresee exponential growth in consumer spending with the rise of the middle class in the Philippines in the next five to 10 years. Look at the phenomenon of affluent and expanding middle-class spending in China, Thailand, Indonesia and India — that is happening here with our continued growth on OFW remittances, BPOs and steady economic growth.”
OTHER MALL CONTENDERS
Manny Villar wants to compete with construction tycoon William Belo’s Wilcon Builders with his AllHome chain. When I mentioned that Belo (whose Chinese surname is Yao) has a crocodile farm business, Villar laughed and replied in jest: “Sanay ako sa mga crocodiles, galing kasi ako sa Congress (“I’m used to crocodiles, because I used to be in Congress).”
Publicly listed 8990 Holdings, Inc. CEO JJ Atencio III also told me that their mass-housing group plans to enter the mall business mid-2015, but they prefer not to operate their malls like Edgar Injap Sia’s Double Dragon. They plan to have a joint venture with a mall operator. When I asked which mall operator he admires the most, Atencio said, “We admire SM, especially how they’ve grown to become a public firm but still be family-operated so efficiently.” Luis Yu Jr. is chairman of 8990 Holdings, which expects to have gross revenues of P7.6 to P8 billion this 2014.
Other tycoons are also not relaxing, steadily increasing their number of shopping malls, such as Andrew Tan of Megaworld, which is expanding nationwide; Andrew and Mercedes Gotianun of Filinvest Group, whose Festival mall is expanding in Alabang and I heard they will launch a world-class mixed-use shopping mall and residential complex next year in Manila’s historic Chinatown; Joey Antonio of Century Properties; and the different branches of the Sy-Gaisano clan from Cebu.
Puregold, S&R, Ayala & Tantoco partnership, Central, 168 mall
What about supermarket tycoon Lucio Co of Puregold and S&R, will he go into shopping malls soon to integrate his flourishing businesses? Manny Villar said, “Puregold is the best supermarket operator in the Philippines and its boss, Lucio Co, is savvy in his business moves, while SM is the best department store operator in the Philippines. The Ayala Group has a stranglehold on the luxury market in real estate and I admire their department store partner, the Tantoco family of Rustan’s, for their hold on the luxury retailing market. The Metro Gaisano Group is also very good in retailing. My contemporary, Andrew Tan of Megaworld, he’s into malls too but he’s more excellent in the BPO business.”
In 2015 and beyond, I also foresee the emergence of community malls like the Central Malls of restaurateur Enrico “Rikki” Dee throughout our archipelago.
Another shopping mall that has the potential to leverage its success into more malls is downtown Manila’s phenomenal 168 Mall of low-key, self-made entrepreneur Basilio Tan. He told me he is open to the possibility of expanding to another region of the Philippines.
I recall asking John Gokongwei Jr. what he would do if he were young again with limited capital. He replied that he’d rent a retail space at 168 Mall in Manila’s historic Divisoria wholesale center and start over.
Let hundreds of shopping malls open and contend with each other in the spirit of dynamic, free enterprise competition, so that we consumers, the SME entrepreneurs and suppliers, and the whole Philippine economy will ultimately benefit!
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