Bangkok viewed as a regional retail hotspot
While the global economy may well be stuck in recovery mode, at least one slice of it appears to be enjoying strong growth and expansion, especially across the Asia-Pacific region, and that is the retail sector.
According to the property consultancy agency CB Richard Ellis (CBRE), Bangkok ranked in eighth position in the Asia-Pacific retail target marketplace in 2014, with 19 new entrants opening stores in the Thai capital.
That number is set to be exceeded this year with around one million square metres of retail space due to be leased by the end of December. Three major new shopping malls have opened in recent times, Central West-Gate, CentralFestival East Ville and The Emquartier, situated on the major tourist thoroughfare of Sukhumvit Road and which opened in early April.
Part of the reason there is so much confidence in the Bangkok retail sector is the continuing popularity of Bangkok as a tourist destination, particularly among the steadily increasing Chinese demographic.
CBRE expects the restaurant and coffee sectors to take up the majority of the new retail space, while the mid-range fashion sector is also expected to expand further.
Last year CBRE noted that all across the major cities of the Asia-Pacific region there were 464 new retail entrants into the marketplace. This was a substantial 23 percent increase on the 2013 numbers.
Tokyo led the way with the Japanese capital seeing 63 entrants, followed by Singapore with 58, Taipei with 49, Hong Kong 45 and Beijing 34.
Although doom and gloom merchants continue to doubt the economic recovery within the United States, it is noticeable that it was US retailers who led the way in new entrant numbers into the Asia-Pacific region, accounting for 24 percent of the business. This was substantially ahead of the second-placed entrants Britain and Italy, with each taking an 11 percent slice of the new ‘cake’ just ahead of the 10.5 percent emanating from France.
Also showing how much the Japanese economy is starting to rebound after many years of stagnation, their retailers came in fifth place with 6.9 percent of the new Asia-Pacific market entries. Given that Japanese businesses have had a long and fruitful association with the Thai marketplace, this resurgence augurs well for the longer term of retail, and indeed other sectors, within the Thai economy.
As CBRE analysts noted, international retailers generally look to establish their products and brands by setting up in the more mature marketplaces, such as Tokyo and Hong Kong, before venturing further afield.
In 2014 Tokyo, as noted earlier, confirmed its position as the number one destination for international retailers. The recovery of the Japanese economy, strong tourist arrival numbers and the 2020 Tokyo Olympics are all factors driving this renewed strength in Japan from the international market.
Luxury and business categories saw the greatest share of new entrants at 22.6 percent, but this only just eclipsed the coffee and restaurant section, at 22.4 percent. This latter category jumped from 14.8 percent in 2013.
While the Bangkok figures don’t necessarily parallel the overall international numbers, the reality is that the Thai capital continues to attract a strong share of the marketplace despite increasing competition from less mature destinations such as Ho Chi Minh City, Phnom Penh, Vientiane and Yangon, even though these cities are also experiencing solid investment and interest from international retailers.
Bangkok’s geographic position, major airport facilities and modern infrastructure continue to give it a general advantage over most of its nearby neighbours.