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Interview: Sunway Malls' meets challenges head on in the new world of eCommerce and retail

Interview: Sunway Malls' meets challenges head on in the new world of eCommerce and retail

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Malaysia is entering an endemic phase, and movement restrictions have started to ease up. With the new regulations in place, shopping malls and retail stores in Malaysia can slowly expect to see an increase in footfall to their premises, as citizens start to head out during the festive year-end period.

Moreover, Malaysia is also opening up its doors to neighbouring countries such as Singapore and Indonesia to lure in more tourists to the country, which will undoubtedly add to its tourism receipts and spend. While this means more footfall to retail malls, it doesn't take away the importance of eCommerce that retailers must now embrace.

In fact, according to a study by Google, Temasek, and Bain and Company, titled "e-Conomy SEA 2021, Roaring 20s: The SEA Digital Decade", Malaysia's Internet economy is predicted to reach a gross market value of US$35 billion in value by 2025 and have a compound annual growth rate of 14% from 2021. While markets start to open up, eCommerce will remain a key component for retailers and brands as consumers now become more comfortable with the purchase process online.

One such mall which understood and embraced the power of eCommerce was Sunway Malls, which launched its eCommerce platform in 27 October 2021 to allow consumers access to its stores amidst limited movement in Malaysia. The company's eCommerce initiative aligned with its ambition to reach out to demographics across the nation that might not be able to access its physical malls easily. 

In an interview with A+M, Sunway Malls and Theme Park's CEO, HC Chan (pictured) said the past two years have been a catalyst for many innovations for Sunway Malls and its extension into digital space was not a matter of should, but a must, given physical and digital spaces are now converging. This was part of Sunway Malls’ strategic digitalisation masterplan to compete in both the physical and digital space, explained Chan.

“The days of having one single domain are no longer attainable. The presence must be in both. Certainly, the pandemic has accelerated this.”

Amidst the lockdown, the mall also created a centralised customer engagement hub to engage with its consumers digitally. Chan shared that pre-pandemic, Sunway Malls was trading at a historical high in 2019, with the highest sales per square foot. Benchmarked against Malaysia’s lowest GDP growth (4.3%) in 10 years in 2019, he said the mall was proudly bucking the trend. However, when the pandemic struck, the momentum was derailed. As such, over the last 20 months, Sunway Malls faced challenges in cashflow management, confidence management, and sustaining occupancy. With the launch of eCommerce and with digitalisation at its heart, the mall aimed to mitigate some of these challenges.

According to Chan, the eCommerce offering worked as an insurance and contingency against unforeseen geographical or retail sub-sectors lockdowns. Broadly speaking, Chan shared that launching the eCommerce platform during the pandemic also eliminated geographical challenges for the brand and made it reachable to shoppers far and wide.

Nonetheless, cutting through the eCommerce clutter to stand out is not easy with almost every brand today, launching its stores online. When asked what makes the Sunway mall experience any different, Chan said the comparison should not be made against any brand but rather against mall operators. “In that comparison, then perhaps the difference is the amalgamation of our seven physical malls’ offerings into a single platform. It also includes consolidated delivery which makes good sense in receiving all the consumers' orders in a single delivery as opposed to multiple deliveries," Chan added. 

The eMall, Chan explained, was an idea the management team had been mulling and studying for over two years. However, it was important to ascertain how feasible it was, and how the company would go about bringing its vision for the eMall to life. "We were looking for the right business model. We are conscious we are not a pure-play eCommerce player but to leverage on what e-commerce can offer in our context as a physical mall operator,” he said. 

Chan added that a 500,000 square feet mall can cost approximately RM500 million to build, with a long planning and development timeline running into a few years, In comparison, the investment into Sunway eMall is only a small percentage compared to capital investment into a physical mall.

The marketing experience

Even before the pandemic hit, many younger consumers were already comfortable on digital. But it is undeniable that the pandemic shifted habits to fully digital-first across many demographics. Today, Sunway Malls’ communication budget is primarily concentrated in the digital and social space with approximately 70% to 80% being siphoned into the platforms. 

"Social media platforms continue to be the mainstay given the foothold they have, even more so when ground activation was not possible during the lockdown period," said Chan. Currently, Facebook is considered its most dominant platform of choice in marketing communications, and Sunway Malls ensures that it fully utilises features such as Facebook Live, Facebook shops, Instagram Reel, and Instagram Live.

Meanwhile, TikTok is also a platform that has caught the attention of Sunway Malls’ marketing teams. While the brand is still new to TikTok, Chan shares that it already has the second-highest following of all its owned social platforms. A key reason why the company decided to embark on TikTok was the tremendous growth. In fact, a study by  In Video has found that around 50% of the top brands have no TikTok presence, including billion-dollar brands such as Google, Facebook, YouTube, and IKEA. According to the company, despite its incredible popularity, many brands still don’t have a coherent TikTok marketing campaign. This means that establishing a TikTok presence early can be an advantage for smaller brands to leapfrog as many larger brands haven’t made their mark on the platform. 

“It overtook Facebook as the world’s most downloaded app in 2021. The platform also reportedly had three billion installations globally, becoming the first non-Facebook app to do so. If building for the future, this is one app to invest effort and time into," said Chan, who added that a lot of its younger shoppers connect with the brand on the platform. 

Chan also shared that the brand is also careful with its communications around the younger demographic, and generally drives conversations or posts around sustainability, diversity, inclusivity and authenticity when speaking to its younger fans. "The younger generation is a digitally native generation where their world views are shaped by information but also perspectives, making them even more informed than before. Because of their world views, they seek authenticity and they seek out brands which vocalise these values," Chan added. 

When asked what he expects 2022 to be like for the brand and the retail industry in general, Chan shares that he believes there will be more prominence in Asian brands and consumers will start lending their support to home-grown brands. "The country will probably be seeing more breakout Asian brands from their home countries into Southeast Asia. F&B will still be gaining traction although in the near term, capacity and control issues will put a dampener over a longer term it will remain strong as out-of-home dining remains a very pleasurable pursuit for Malaysians," Chan added. 

Related articles:
Sunway Malls bets on new eCommerce platform to grow beyond physical footprint
Post-pandemic tourism: Expect extreme competition amongst survivors
Sunway Malls unveils customer engagement hub for more innovative and engaging experiences
Digital services play crucial role as Malaysia's Internet economy predicted to hit US$35bn by 2025

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