Singapore shopping malls are opening different kinds of premises like yoga studios, climbing walls and boxing gyms in a bid to attract more shoppers, while online sales remains in its infancy here, reported Bloomberg.
For instance, Mapletree Commercial Trust set-up an arcade with a bumper car ring in VivoCity, the city-state’s biggest mall.
In CapitaLand’s Clarke Quay, shoppers can drink margaritas while enjoying a round of indoor mini golf. At the firm’s existing Westgate mall and its highly-anticipated Funan DigitaLife Mall, the landlord will open an ABC Cooking Studio, where people can learn baking lessons as well as how to cook traditional Japanese desserts called Wagashi.
“While the current market share of online sales is small, its pace of growth will only speed up as tomorrow’s consumers enter the market. Brick-and-mortar businesses must go beyond passively selling products and services to generating quality retail experiences and emotional connections,” said CapitaLand’s CEO Lee Chee Koon in September when launching the upcoming Funan mall.
Mall owners are setting up more experiential spaces while e-commerce in Singapore remains soft as compared to those in other developed countries.
In 2017, online sales here only accounted for 5.7 percent of total retail sales, with $1 billion worth of goods sold on the internet compared to $21 billion in physical stores, according to data from Euromonitor International.
In comparison, $366 billion online sales were done in the US compared to $2.555 trillion in brick-and-mortar outlets, while $79 billion worth of goods were sold online in Japan versus $856 billion in actual stores.
But while the addition of experiential spaces in Singapore malls are boosting human traffic, it’s not resulting in more consumer spending.
In fact, rents at shopping malls here declined 18 percent in 2017, and the vacancy level at these properties fell to 7.6 percent based on data from the Urban Redevelopment Authority (URA).
Making things worse, about 803,000 sq ft of retail space is expected to enter the market over the next 15 months, and this situation could drag down rents, said Tay Huey Ying, JLL’s research head for Singapore.
“Until brick-and-mortar retail stores manage to convert foot traffic into in-store purchases, rentals are expected to remain subdued,” she added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org