- Lots of ASEAN shopping mall developers and also a strong financial center
The globe business moves ahead, no matter what the Japanese quake is doing to Japan and Asia in general.
The latest news out of Latin America is that shopping malls are booming and the latest out of London is that the poll says London is loosing its luster as key global financial center.
ASEAN is a major hub that produces consumers good, can benefit a great deal from the development of Latin America shopping malls.
There are also many shopping mall development group in ASEAN. In Thailand for example there is the Central Group.
ASEAN also house Singapore, which is competing with Hong Kong as a key global financial hub. Singapore, itself, is also serving the entire ASEAN region in banking and financial services-already the ASEAN hub for many global firms.
Is ASEAN ready to tap Latin America? Is ASEAN ready to benefit from London’s demise?
Brazilians enjoy some of the finest weather in the world, but it comes to shopping, they are increasingly choosing to go indoors. Other Latin Americans are joining them.
Shopping malls have become a common feature of the landscape in São Paulo, Rio de Janeiro and other large cities, and now they are spreading to inner parts of Brazil. The same trend can be observed in other Latin American countries, too. Economic growth and easier credit has put more money in the wallets of Argentineans, Peruvians and Chileans alike, and shopping malls have been among the main beneficiaries of their eagerness to consume.
Sales in Argentina’s shopping malls were 43.7% up in the twelve months to the end of December, according to CASC, a trade association. In Brazil, sales finished 2010 up by 17%, topping R$87bn (US$53bn), said ABRASCE, the Brazilian counterpart to CASC. These numbers are higher than the overall growth in retail sales, which was estimated by the Economist Intelligence Unit to have reached in 11.3% in Argentina and 8.5% in Brazil in 2010.
In Argentina, this reflects a belated boom after what has been a decade of comparatively slow growth. In the decade from 2000 to 2010, the number of malls in the country rose from 51 to 94. But those figures disguise a recent surge in interest, which has seen the Argentinian media flooded with reports about new projects. These include curiosities like the self-proclaimed southernmost shopping mall in the world, which will be built in Usuahia, in Terra del Fuego region.
In Brazil, the development of the segment has been more rapid. Sixteen new malls were built in the country last year, says ABRASCE, taking the total to 408. Five years ago, there were only 338. The association believes that an extra 25 will be added to stock this year, two-thirds of them outside state capitals, which are traditionally the economic centres of the country. This is an important development, suggesting that the wealth created by Brazil’s solid economic growth in recent years is trickling down to poorer parts of the nation.
The reasons behind the popularity of shopping malls are manifold. Security is a major concern for the well-off in Latin America, and shopping malls are often seen as safer places for the smartly dressed. The desire of newly empowered consumers to show off their social status plays a role too, as shopping malls are traditionally seen as havens for the upper classes. Indeed, a recent development in Brazil, where the market is most developed, is the creation of luxury malls proclaiming their exclusivity. Shopping Cidade Jardim, in São Paulo, hired Sarah Jessica Parker, the American actress of Sex and the City fame, to publicise its luxury credentials when it opened its doors in 2008.
Not just Lima
The lure of the malls is also being felt in parts of the subcontinent that were hardly seen as consumption paradises a few years ago. The most impressive example is probably Peru, where retail sales boomed by 9.2% in 2010, according to the Economist Intelligence Unit. On the back of the country’s economic growth, one industry entrepreneur has forecast that its 25 existing shopping malls could increase to 40 by 2012 and to 100 in five years’ time.
The Peruvian story is not new: empowered consumers and an expanding middle class are voting with their wallets, even outside traditional economic centres like Lima. The head of Accep, the country’s trade association, has stated that sales in shopping malls increased by 15-20% in 2010, topping U$3.5bn, and could get to U$4bn by the end of this year. This growth reflects not only the rising number of people frequenting malls, but also their rising spend per head.
The increase of consumer spending throughout the region (with exceptions like hapless Venezuela) is also urging Latin American shopping mall firms to spread their tentacles outside their domestic markets. Chilean groups, which trade in arguably the most developed retail market, are leading the pack.
Parque Arauco, which owns 8 shopping malls in Chile, has announced that half its 2011 budget will be spent in Colombia, where the firm has a single unit in the city of Pereira but will now expand in Bogotá and Barranquilla. Rivals Mall Plaza have put their sights in Cartagena de India, Colombia’s most popular tourist attraction, where it plans to open a new mall by the end of the year.
Though both companies are focusing on Colombia, other retail groups like Ceconsud and Grupo Falabella are making investments in Peru, Argentina, Brazil and elsewhere. It seems that more South Americans will soon be able to go out shopping while staying away from all that sunlight.
The Following is from the Economist:
Is London losing its appeal as a financial centre?
There have been rumours this week that HSBC is considering transferring its headquarters from London to Hong Kong. Although it has dismissed such talk as speculation, whispers persist that some of Britain’s biggest banks are preparing to bale out of the City. Faced with more taxes, thickets of red tape, interference with pay and a new and hostile regulator, the Bank of England, it is said Barclays could shift its headquarters to New York, for example, while Standard Chartered could be tempted by either Hong Kong or Singapore.
Nonetheless, London remains Europe’s dominant financial hub. Despite its terrible weather and creaking transport infrastructure, London has built up critical mass in legal, accounting and fund-management expertise and most big investment banks have a presence there. Before the credit crunch, there was even talk that London would replace New York as the world’s financial centre.
- Analysis: Rising China threatens U.S. clout in Latin America (reuters.com)
- Obama to refocus on Latin America amid Chinese push (reuters.com)
- Sydney Victorian mall promotes coming shopping season (mumbrella.com.au)
- New South American exchange may give Mexico a jolt (reuters.com)
- World Economic Forum on Latin America 2011 (stevenleesdouglas.wordpress.com)
- Obama Evokes JFK Alliance in Latin America Tour to Thwart China (businessweek.com)
- “The End of the ‘Washington Consensus'” (economistsview.typepad.com)
- Large Kinect Kiosk Sets Up Shop In Mall [Xbox 360] (kotaku.com)
- Brazil at heart of Google’s Latin America strategy (theglobeandmail.com)
- Brazil at heart of Google’s Latin America strategy (reuters.com)