Sunway Pyramid evolves in the face of increased competition
By Hakim Hassan email@example.com
Although it has been more than 20 years since the mall opened its doors to the public, Sunway Malls and Theme Parks chief executive officer H.C. Chan said Sunway Pyramid is still in demand with consumers as seen in the number of visitors.
“Our visitorship has been growing, and we now have 3.3 million visitors per month – which translates to a sizeable 40 million visitors per annum. That is a very significant catchment number reflecting the popularity of the mall.”
He said a significant contributor to this visitorship growth is the trend of ride-hailing apps which over the past two years has gained significant traction.
“Ride-hailing apps contribute a quarter of our mall footfall traffic and form the last mile connectivity to the mall. We estimate the figures at 20% of car-count numbers.”
Chan added: “In 2017, Pyramid achieved its highest traffic arrival with a growth of 5% year-on-year in car count despite weak consumer sentiment, disruption in e-commerce and the opening of new malls in the Klang Valley.”
Moving forward, he said that government decisions like zerorising the goods and services tax (GST) would help the mall in terms of visitorship.
“We foresee the numbers growing on the back of fixed petrol price (for RON95), GST removal and popularity of ride-hailing,” he said.
Upgrading for the future
Chan said this is essential given the intense competition in the industry from traditional mall formats and new e-commerce entrants.
“The industry as a whole also has to deal with a new reality of consumers demanding more experiential retail as opposed to boring shopping,” he said.
“It’s a paradigm shift that calls for the retail experience to begin (at the carpark or entrance) even before the customer reaches the retail floor.”
With that strategic intent in mind, Chan said Pyramid upgraded its carparks with epoxy flooring so that they look more aesthetically pleasing.
“Aesthetics and durability aside, the gloss-like finishing and its reflective nature brightens the carpark and enhances security. This is an important psychological safety feature,” he said.
Sunway Pyramid’s porte-cochere (covered entrance), which serves as the main artery of the mall, was redesigned with sustainability in mind. It is now a bigger passageway with glass walls that allow more natural lighting into the mall.
“It is double glazed to prevent the loss of air-conditioning so that energy cost can be optimised. The old design with sliding doors is not sustainable; we have to be more responsible in our energy consumption,” Chan said.
Another concern was how to minimise the transition of the relatively harsh environment of the carpark into the mall.
“We adopted an audio-visual sensory strategy at our carpark escalator decks. We named it Oasis Garden,” Chan said.
The Oasis Garden concept revolves around flora and fauna. Chan explained that plain walls were turned into flora walls and sounds of fauna were added to create a sensory experience of walking through a garden canopy before entering the retail floors.
“These sounds are authentic. To create the project, we worked with Sunway University’s Prof Matthew J. Sansom who is an authority in this field.
“It represents a breakthrough in our quest to use sound as a mall ambience differentiator,” he added.
Pyramid and the pack
With increased competition, Sunway Pyramid has had to brace for the future. According to Malaysian Shopping Malls Association figures, half of the 550 malls in the nation are in the Klang Valley.
Chan said: “Statistics from the National Property Information Centre (Napic) bear this out.
“Both Selangor and the Federal Territory emerged top with a cumulative retail space of 68.1 million sq ft, constituting 43% of the total retail space supply nationwide (157.6 million sq ft). Both figures show how crowded the market is”.
Chan said that today’s malls are no longer just functional. They are increasingly experiential due to higher consumer expectation and lifestyle changes.
“Previously, the atmosphere may come from architectural or hard features of the mall. Today’s retail experience should permeate all touchpoints of the mall, both hard and soft aspects.
“We are constantly looking at where we can add value to the shopper’s entire experience.”
For Pyramid, this holistic approach can be seen by the results of its trade mix configuration, flagship stores, marketing events, improved facilities and even connectivity.
“As part of Sunway’s integrated development, the mall has been able to enjoy immense benefits arising from this synergy. It is a crucial differentiator that enables the mall to leverage and collaborate with other business components,” said Chan.
From a master-planning perspective, he said it is akin to creating an entire eco-system where the whole is greater than the sum of its parts.
“This strategic differentiator allows the mall to stay ahead of its competitors,” he added.
Business end of the mall
In terms of sales performance, Chan said mini-anchors and speciality stores contribute 74% of total sales for the mall.
He added that speciality retail stores, particularly sports and beauty, are taking up larger mall space despite weak consumer sentiments and online shopping – which means these brands still have considerable appeal in the brick and mortar setting.
As for growth performance, Chan said F&B (food and beverage) is leading the way.
“Over the years, F&B has gained in terms of overall net lettable area (NLA) in our malls. Today, close to 30% of our mall NLA are dominated by F&B outlets compared to the single-digit percentage of earlier years.”
He said the growth in F&B has been driven primarily by more Malaysians dining and entertaining out-of-home, especially the Top 20% (T20) and Middle 40% (M40) income groups – with increasing urbanisation and growing affluence being the catalysts.
To ensure sustainability of the business, the company has to constantly address the continued relevance of the mall, particularly the aspect of tenant mix.
Chan said: “We take cognisance of emerging trends and identify future winning brands that consumers seek regionally and internationally.”
Of interest to Pyramid will be the growth of China retail brands.
“The retail industry in China is gaining momentum and some of its retail brands will venture abroad for expansion,” said Chan.
“We saw this with Korean brands and anticipate China’s will be next. Of course, China mobile gadget brands like Huawei, Oppo and Vivo have become household names alongside Apple and Samsung,” he said.
Chan expects other trade categories such as fashion, cosmetics and leisure to follow suit. “There will be a Chinese wave – and it could be a very big one,” he concluded.