Key Takeaways from the 2017 MIPIM Asia Summit: …€¦ ·  · 2017-12-06... , Parkson has...

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December6,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Source:MIPIMAsia

TheFGRTteamattendedthe2017MIPIMAsiaSummitinHongKong.Selectedtakeawaysfromthemeetinginclude:

1) Localizationiscriticaltocapturethefast-movingnatureofopportunitiesinAsiaPacific

2) Retailersanddevelopersneedtodevelopkeydifferentiatorsinthisnewera

3) Retailtechnologyisthewaytomakeofflinestoresalwaysonline

4) Thephysicalstorewillneverdisappear

5) RetailersneedtolocalizetheirproductofferingtosucceedinChina

6) Characteristicsofdepartmentstoresthataremostlikelytosurvive

7) Entertainmentistheingredienttosustaintrafficatshoppingcenters

8) Digitalizationisthesolutiontothedigitalrevolution

IntroductionTheFGRTteamattendedthe2017MIPIMAsiaPropertyLeaders’SummitinHongKong.Dedicatedtopropertyinvestmentandretailrealestate,theSummitgatherstop-levelrealestateprofessionalsfromaroundtheglobe.Thisyear,over900participants—halfofwhichwereCEOsandChairmen—joinedfrom570companies.

Below,areselectedtakeawaysfromtheconference:

1) LocalizationIsCriticaltoCapturetheFast-MovingNatureofOpportunitiesinAsiaPacific

Duringthepaneldiscussiontitled“TheRisingOpportunityinAsianHospitality,”thepanelists—representingtheprivateinvestmentandpublicanddevelopersegments—discussedhowbesttopositionthemselvestocapitalizeonopportunitiesasregions

Key Takeaways from the 2017 MIPIM Asia Summit: Localization, Differentiation and Digitalization

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December6,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

developnewtourismopportunities.Thediscussionbeganwiththegapsemerginginthehospitalityindustry.OnecompanythathassuccessfullymanagedtotakeadvantageofthisgapisAirbnb.AlmaRitaJimenez,UndersecretaryforTourismRegulation,Coordination&ResourceGenerationofthePhilippineDepartmentofTourism,mentionedthatthePhilippineTourismAuthorityiscurrentlylookingforAirbnbandecolodge-typedevelopersinordertomaintain“thefaceofthelocalcommunity.”

2) RetailersandDevelopersNeedtoDevelopKeyDifferentiatorsinthisNewEraFGRTSeniorAnalystKirilPopovmoderatedapaneldiscussiontitled“ExperientialRetail:TheFutureofRetail?”Thepanelists,comprisedofretailrealestatedevelopers,retailersandretailtechserviceproviders,sharedtheirviewsonhowtoenhancethecustomerexperienceinphysicalretailspacesinChinaandHongKong.HenryCheng,CEOandExecutiveDirectorofShanghai-basedChongbangGroup,introducedthecompany’s“LifeHub”project,whichencapsulatestheconceptthateachprojectshouldhavearetailcomponent.Chengbelievesshoppingmallsshouldbeextensionsofpeople’shomesandgaveLifeHub@DaninginShanghaiasanexampleofthis.AccordingtoCheng,thepastfiveyearshavebeenaneraofdifferentiation:qualityandspeed,whichhadpreviouslybeenthekeydifferentiators,nolongerwork,andsoretailrealestatedevelopersneedtocreatesomethingdifferent.

Source:UrbanLandInstitute

3) RetailTechnologyIstheWaytoMakeOfflineStoresAlwaysOnlineBrandsandretailersareconstantlywantingtoknowmoreabouttheiruserstomaximizetheirbusinessopportunitiesandtogodirecttoconsumer(D2C),accordingtoTimothyTsui,CEOandCofounderofFanswave,whichhasdevelopedabusinessintelligencetooltohelpretailersandbrandscollectdataviaWi-Fi.Byengagingconsumersthroughsocialmedia,brandscaneasilyreachandtracktheirconsumerbasetoperformtargetedmarketing.Thesecustomerdatacanalsohelpretailersunderstandthetimeofdayorweekconsumersvisitstores,wheretheygobeforeandafter,andwhatotherstorestheyvisit.Thesedatacanbeusedtocreatetailored,personalizedadvertising.

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December6,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

4) ThePhysicalStoreWillNeverDisappearThepanelistsunanimouslyagreedthatthephysicalstoreisheretostay,notwithstandingtheriseofe-commerce.TsuiofFanswavebelievesthatonlineandofflineareinseparable,andthatstoresremainimportantforbranding,loyalty,returnsandcustomerservice.ChengofChongbangGroupalsosharedtheopinionthatonlineandofflinegotogether.AdaWong,CEOandCIOofChampionREIT,pointedoutthatreturnswilllikelystillneedtobedoneatthephysicalstore.AndreaMeoni,HeadofExpansionGreaterChinaatCalzedoniaGroup,describedthelengthsthebrandgoestodifferentiatetheshoppingexperienceatphysicalstores,suchasbyorderingfurniturefromItaly,andreferredtothechallengeinChinaasfindingthebalancebetweenonlineandoffline.

FGRTSeniorAnalystKirilPopovmoderatedapaneldiscussion.Source:FGRT

5) RetailersNeedtoLocalizeTheirProductOfferingtoSucceedinChinaRetailersoperatinginChinaneedtogiveChineseconsumerswhattheywant.Thiswasthekeypointthatemergedfromthepaneldiscussiontitled“FastRetailingversusLuxury.”WilliamSong,VPofMetersbonweFashion&Accessories,describedhowthishomegrownChinesecasualwearbrandstrivestomaintainitsdominationinChina.Torecoverfromitspreviousoveremphasisone-commerceandnothavingproperlyshiftedchannels,Metersbonwenowfollowsastrategyoflaunchingnewproductsandstoreexperiencestomatchthebrand.Localizationiskeyinacountrywhereweathertrendsandculturaldifferencesexistacrossalltheprovinces.Tothisend,thebrandhasdividedChinainto30markets,runby30differentsubsidiariestoseparatelyanalyzethoseproductsthataresellingwellineacharea.

Similarly,clothingretailerEtamisanotherbrandthatdeftlyusesdifferentchannels,brandsandproductmixtoappealtolocalconsumers.Etam,whichinitiallybeganasalingeriebrand,utilizesdepartmentstores,physicalstoresande-commercesuchasTmall,JD.comandWanda’sFeiFantoreachChineseconsumers.Toremainfreshinthemindsofconsumers,Etamhas24seasonsandusestheeasy-to-carematerialsinitslingeriethatChineseconsumersprefer.

6) CharacteristicsofDepartmentStoresthatAreMostLikelytoSurviveSongofMetersbonwestatedthatthedepartmentstoremodel—i.e.,thestoreasafranchiseeofmanybrands—doeswellinareaswithahighlyconcentratedpopulation.In

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December6,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

areasinChinathatareexperiencingpopulationdiffusion,wherepeoplearemovingoutofthesuburbs,thedepartmentstoremodelisnolongeraseffectiveasitoncewas.

MichelleLee,NationalDirectorofOperationsandDevelopmentatEtam,liststhecharacteristicsofdepartmentstoresthatwillmostlylikelysurviveasthosethat:

1. Haveasufficientlylargearea.

2. HavealoyalconsumerbaseofVIPcustomers.

3. Areabletodifferentiatethemselves.Forexample,Parksonhasdevelopedanoutletshoppingmodel.

Source:FGRT

7) EntertainmentIstheIngredienttoSustainTrafficatShoppingCentersInthepaneldiscussiontitled“LeisureandEntertainment:HowtoDevelopandSustainTrafficatShoppingCenters,”thepaneliststalkedaboutthemeanstheyhaveusedtocreateanenchantingcustomerjourneyforboththeindividualandthefamily.

ReinhartViane,BusinessDevelopmentDirectorofKCCEntertainmentDesign,laidthegroundworkbydescribinghowconsumerswantexperiencesnotjustshoppingatmalls.Mallswithanentertainmentelementaverage10%–20%higherfootfall.

Emergingtrendsinshoppingmallentertainmenttouchedonbythepanelistsincluded:

1. Mallsareaddingintellectualproperty(IP),suchasPeppaPigandSnoopy,toshoppingmallentertainment,whichaddstotheirattraction.

2. Consumersprefermoreactiveandexperientialattractionssuchasflightsimulators.

3. Morevirtualreality(VR)companiesarelaunchingcontentandhardwaretofitinwithshoppingcenters.

4. Landlordsarestartingtoworkwithattractionsatamuchearlierstage,whichispositive.

5. Landlordsneedtolocalizeexperiences,astheycannotjust“copyandpaste.”

6. Consumersexpectconstantly-changingcontentandmallentertainmentneedstoadoptquickly,makingscreens,virtualcontentanddisplaysmorepreferable.

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December6,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Source:MerlinEntertainment

8) DigitalizationIstheSolutiontotheDigitalRevolutionRonnieChan,ChairmanofHangLungProperties,presentedonthetopic“ExcellinginStrengtheningPartnershipswithRetailTenants,”outliningdigitalizationasthebestwaytoaddressthedigitalrevolutiontakingplaceintheretailrealestateindustry.Hebelievesthoseretailersthatwillbeleastimpactedbythedigitalrevolutionarethoseinthebestlocationsandinthehigher-endcategory.AlthoughChanexpectsshoppingcenterstobecomeadifferentexperienceinthefuture,hedoesnotbelievethatdigitalwillreplacetheshoppingcenterexperienceandinfactthinksthatthebiggerplayerswillonlygetbigger.HangLungPropertiesimplementeditsESTinitiative(Experience,Service,Technology)toacceleratedigitalization.

Source:HangLungProperties

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December6,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

DeborahWeinswig,CPAManagingDirectorFGRTNewYork:917.655.6790 HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comEsmePau,CFAAnalyst

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