Today was a field day for me as I was in two meetings, walked an entire mall and several streets of Penang.
The activities that I was in or witness to, they made me feel disheartened about the way of life in Penang and of things to come.
In the months to come I will be seeking out new people who are particularly interested in what I am fond of, which is to see to good changes in Penang.
What I mean as good changes is not purely on monetary value but also on providing societal transformation street by street.
The Penang’s economies are not recession proof. Part of the reasons for bad economies comes from poor co-operative planning where people continue to work on developments individually.
Belleview recently announced its plan to launch a new upmarket shopping mall in the heart of Georgetown, with some 600,000 sq. ft. of lettable area. This comes on top of the Paragon Mall (Hunza), the Gurney Plaza’s new wing (CapitaRetail), Penang Time Square (Ivory Prop.) and then there is D’Piazza Mall at Bayan Baru that claims 89 out of 90 units 3-storey shoplots have been snapped up but now open for leasing by Henry Butcher. Then, there is the unaccounted for Penang Global City Centre.
So, if we are talking about some 15,000,000 sq ft of retail space, which is 3 times the size of the new 1 Utama plus IKEA and all else, can Penang and other states business owners have sufficient capital to rent or buy up shop-lots and then run a successful retail business?
If yes, then working out on a 1,000 sq ft per unit per business, my advisory firm may get a chance to perhaps advise a percentage of the 15,000 business owners. Wow.
In the best interest of Penang and its people, I am thinking of getting good people to sit, discuss and draw up plans which can be presented to the State Government and interested parties on developing industries in Penang. Although big businesses had come out to say that sentiment in consumer sector can help to sustain the industry, those that are interviewed are giants, such as Carrefour, F&N, Nestle, Poh Kong, BAT and Pelikan whose businesses do not rely on local market to succeed.
Whether it’s a retail, a financial bank, a SME or a stock broking firm to try to survive tomorrow; advisory and research companies located far away from Penang, predicting good growth potential should go down to the streets on a Tuesday.
The Government’s initiative to relax the EPF Account 2 to stimulate consumer spending on consumable (retail) and non-consumable good (property), which led our Bank Negara to imply that there are RM31 billion extra to spend, has all the tale of property development by the affordable. The 2 million people in the whole of Penang will not categoretically spend that bit and definitely not going to buy 5 shop-lots and make into a single business.
What is presented here is a challenge. For us, the thinkers, to continue to make Penang attractive since we will be here for a while. (I was more impressed by the trishaws in the hutongs, China than dirty state of trishaws taking our tourists around Penang).
Do let me know if we have common interests.
Best regards,
Erasmus
Tuesday, January 29, 2008
Monday, January 14, 2008
Who's Who in Your Company
In Malaysia scene, most of the times, companys hide behind layers of corporate veils in terms of recognising Founding members of businesses and strong corporate profiles.
Why is that?
Malaysian retail business is still considerably small.
As such, either the business owners are often pestered by sales people. Or, they do not wish their competitors to get whiff of where the business is heading.
In international business scene, such as in US, their entrepreneurs are particularly proud of their business and often portray as the strong leader for the business front.
However, again the ones that we know of are big in the business industry.
Nevertheless, it doesnt really matter if your business is very big (how big is big?) or small, but how wonderful is your business to your customers and how satisfying is it to deal business with you as partners, suppliers and even consultants.
Be the person in business and put your profile where the world can see.
Why is that?
Malaysian retail business is still considerably small.
As such, either the business owners are often pestered by sales people. Or, they do not wish their competitors to get whiff of where the business is heading.
In international business scene, such as in US, their entrepreneurs are particularly proud of their business and often portray as the strong leader for the business front.
However, again the ones that we know of are big in the business industry.
Nevertheless, it doesnt really matter if your business is very big (how big is big?) or small, but how wonderful is your business to your customers and how satisfying is it to deal business with you as partners, suppliers and even consultants.
Be the person in business and put your profile where the world can see.
Wednesday, January 2, 2008
Retail Industry Needs Bigger Pie
Selection text from NST, Biz News, 2 Jan 2008, pg 38.
2008 Outlook by Toh Peng Koon, President of Malaysia Retailers Association
Q1. Challenges for local retail industry this year.
Too many shopping complexes that have just been completed or under construction or being planned.
Increased by 20% with the opening of 6 malls and expansion of one mall in Kuala Lumpur.
The retail industry could not expand in tandem to support this sudden explosion of retail space.
Explosion of retail space, shortage of staff is worsening. This would add pessure to salary and costs of operations to the retailers.
Growth in the the retail industry would be capped by the higher cost of living which has been escalating.
With oil prices touching the US$100 (RM 331) per barrel mark, the worsening rising cost of living expenses would post a major challenge to the industry.
Q2. Ways to overcome these challenges?
To enlarge the retial pie via tourism.
To extend the Visit Malaysia Year 2007 to 2008 as 25% of total tourists receipts is from shopping. So far, VMY 2007 has been successful.
For Malaysia to be as a preferred shopping destination in the region, it is mandatory that retailers should keep up with the latest development in store layout, design, materials, concept, fixtures, current hot brands of merchandise (that would require realignment of layout) as well as appropriate maintenance to keep the store fresh and presentable.
Hope the Government through Inland Revenue Department would help to reduce costs of operations by allowing full cost of refurbishment to be tax-deductible.
Q3. Trends that could shape the retail industry this year.
Increase interest from the Malaysian and foreign institutional investors and property funds in commercial properties. Sell and lease-back activities were also common. This would help improve the overall complex management standard.
Hypermarkets are on aggressive trail and department stores rae making significant tenancy commitment as anchor tenants in the major shopping complexes. This could add pressure to productivities.
Q4. Prospects for the Retail Industry 2008
Average rate for past 3 years had been 8% and 2006 retail sales growing 8.4% year-on-year.
Positive factors that can sustain growth rate for 2007 include salary adjustment for civil servants, increased public spending and a bouyant stock market.
Hypermarkets topped the value sales growth in 2006 due to authorities' relaxation in the ruling governing the opening of hypermarkets.
Non-grocery sectors are also expected to perform better for 2007. So the year end prediction is expected to be 8%.
For 2008, it is not so optimistic. Retail are expected to perform more or less in tandem with the country's Gross Domestic Product growth.
2008 Outlook by Toh Peng Koon, President of Malaysia Retailers Association
Q1. Challenges for local retail industry this year.
Too many shopping complexes that have just been completed or under construction or being planned.
Increased by 20% with the opening of 6 malls and expansion of one mall in Kuala Lumpur.
The retail industry could not expand in tandem to support this sudden explosion of retail space.
Explosion of retail space, shortage of staff is worsening. This would add pessure to salary and costs of operations to the retailers.
Growth in the the retail industry would be capped by the higher cost of living which has been escalating.
With oil prices touching the US$100 (RM 331) per barrel mark, the worsening rising cost of living expenses would post a major challenge to the industry.
Q2. Ways to overcome these challenges?
To enlarge the retial pie via tourism.
To extend the Visit Malaysia Year 2007 to 2008 as 25% of total tourists receipts is from shopping. So far, VMY 2007 has been successful.
For Malaysia to be as a preferred shopping destination in the region, it is mandatory that retailers should keep up with the latest development in store layout, design, materials, concept, fixtures, current hot brands of merchandise (that would require realignment of layout) as well as appropriate maintenance to keep the store fresh and presentable.
Hope the Government through Inland Revenue Department would help to reduce costs of operations by allowing full cost of refurbishment to be tax-deductible.
Q3. Trends that could shape the retail industry this year.
Increase interest from the Malaysian and foreign institutional investors and property funds in commercial properties. Sell and lease-back activities were also common. This would help improve the overall complex management standard.
Hypermarkets are on aggressive trail and department stores rae making significant tenancy commitment as anchor tenants in the major shopping complexes. This could add pressure to productivities.
Q4. Prospects for the Retail Industry 2008
Average rate for past 3 years had been 8% and 2006 retail sales growing 8.4% year-on-year.
Positive factors that can sustain growth rate for 2007 include salary adjustment for civil servants, increased public spending and a bouyant stock market.
Hypermarkets topped the value sales growth in 2006 due to authorities' relaxation in the ruling governing the opening of hypermarkets.
Non-grocery sectors are also expected to perform better for 2007. So the year end prediction is expected to be 8%.
For 2008, it is not so optimistic. Retail are expected to perform more or less in tandem with the country's Gross Domestic Product growth.
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