SM Investments Corp, the owner of the Philippines’ largest mall operator, is speeding up efforts to develop “omni-channel” options for shoppers as people shift to a mix of online and in-store purchases amid the coronavirus pandemic.
The group is tapping personal shoppers, ramping up delivery and pickup services, and boosting its online presence, said Steven Tan, president of SM Prime’s mall unit. Last month, the group started operating a virtual mall for Manila residents, which it plans to roll out nationwide soon, he said.
“You have to be present in all channels,” Tan, 51, said in a virtual interview. “Retail is all about listening to your customers and moving so fast.”
The group founded by the late Filipino billionaire Henry Sy is adopting the “omni-channel” retailing approach to replicate the success by industry peers in China, where consumers shop both online and at malls, he said.
Although shopping centres need to keep up with changing times, they will not go out of style, Tan said.
SM has 75 shopping centres in the Philippines and eight in China. It is opening another in its home country this quarter and about five are planned for next year, he added.
Filipinos are returning to shopping centres as virus quarantine curbs ease. Still, shopping habits may have changed, Tan said. People visiting malls are those purposely buying and not just window shopping, he added, forecasting that by the third quarter of next year, sales of tenants at SM malls will be back at end-2019 levels.
Sales of SM shopping Centre occupants are at 60 per cent to 70 per cent of pre-pandemic levels, up from about 20 per cent in the early months of Philippines’ reopening in May and June after a two-month lockdown, he said.
Foot traffic is about 40 per cent of what it was before the coronavirus. SM plans to gradually restore rents in 2021 after waiving most of the tenant fees this year, he said.
Swedish furniture retailer Ikea will open its store in SM’s Mall of Asia by the third quarter of next year, Tan said.
Henry Sy, who passed away in January 2019 at 94, founded his business empire from ShoeMart, a small Manila shoe store, in 1958. The family also controls Banco de Oro, the second-largest bank in the Philippines, as well as a large collection of real estate investments.
SM Investments has a market value of 1.24 trillion pesos (US$25.8 billion) as of November 13, according to Bloomberg data. His eldest son Henry Sy Jnr now runs the SM Prime Holdings unit, and has an estimated net worth of US$2.8 billion, according to Forbes.
Transactions through social-media channels account for about 11 per cent of sales at SM department stores, Timothy Daniels of SM Investments said at the virtual interview.
“There is no plan to slow down the general retail strategy,” said Daniels, who is the unit’s investor relations consultant.
SM Group introduced 250 small-format outlets including Alfamart stores this year and plans to open more, Daniels said. The company’s malls are expanding alfresco dining and lounges to cater for the virus-driven trend toward bigger, open spaces, said Tan.
Tan joined the company in 2004 when fashion made up 70 per cent to 80 per cent of tenants and restaurants were less than 5 per cent. Food now accounts for 30 per cent of SM mall occupants, services about 15 per cent and fashion is below 50 per cent.
Additional SCMP reporting