Japan firms expand retail facilities in Southeast Asia

By Hidetaka Yamamura / Yomiuri Shimbun Correspondent

18:14 JST, February 14, 2022

BANGKOK — Japanese companies are eager to open more commercial facilities in Southeast Asia, hoping to develop new markets in a region where the middle class has been enjoying economic growth. But for them to gain traction with local consumers, they’ll need to deliver differentiated customer experiences to stand out from the many local competitors.

On Jan. 28, the Central Village outlet mall, operated by Mitsubishi Estate Co. in a suburb about 30 kilometers east of central Bangkok, opened its new expansion. The sprawling commercial complex now covers more than 150,000 square meters, and was crowded with families carrying bags of purchased items.

Mitsubishi Estate has operated the outlet mall together with local company Central Pattana Public Co. since 2019. The mall has become popular for brand-name clothing, luxury sundry items and sporting goods.

Bangkok has many commercial facilities directly connected to urban railway stations, but few large outlet malls, which customers usually need a car to visit.

A Mitsubishi Estate official said: “Southeast Asian consumers are more conscious than Japanese consumers about whether it’s a nice-looking place for social media. Our facility would like to emphasize seasonal decorations, such as for Christmas and spring festivals.”

In Kuala Lumpur, Mitsui Fudosan Co.’s large-scale commercial facility, the Mitsui Shopping Park LaLaport Bukit Bintang City Centre, opened Jan. 20.

Aeon Mall Co. opened the Aeon Mall Tanjung Barat in Jakarta last November, as its fourth store in Indonesia.

These companies’ new projects have been prompted by the growing number of local people with higher purchasing power.

It is generally accepted that a country with a per capita gross domestic product of more than $3,000 has a vibrant consumer market. According to the International Monetary Fund, the figure for Malaysia was about $11,000 in 2021, while that for Thailand was $7,800. The Philippines and Vietnam reached $3,000 a few years ago.

However, the retail competition in these countries is fierce. Major Japanese department stores once made inroads into Singapore and Bangkok, but many withdrew because they could not distinguish themselves from competitors by just selling high-quality brand products. Online shopping, which has become common in the region, is also a factor in intensifying competition.

The new trend for Japan’s retailers operating in Southeast Asia is to promote aspects of affluent lifestyles, with the aim of showing middle-class consumers there that they are different from other stores.

Culture Convenience Club Co., an operator of bookstore chains, plans to open Bukit Jalil Tsutaya Books in Kuala Lumpur this spring.

“We want to cultivate culture [through a new bookstore], based on the know-how we have gained in Japan,” a CCC official said.