Japanese companies expand retail facilities in Southeast Asia

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Customers visit the Central Village shopping center in Thailand after its expansion in January. The Yomiuri Shimbun via The Japan News/Asia News Network

BANGKOK — Japanese companies are eager to open more business facilities in Southeast Asia, hoping to develop new markets in a region where the middle class is experiencing economic growth. But for them to gain traction with local consumers, they will need to deliver differentiated customer experiences to stand out from the many local competitors.

On Jan. 28, the Central Village shopping mall, operated by Mitsubishi Estate Co. in a suburb about 30 kilometers east of central Bangkok, opened its newest expansion. The sprawling shopping complex now covers more than 150,000 square meters and was packed with families carrying bags of purchased items.

Mitsubishi Estate has operated the mall with local company Central Pattana Public Co. since 2019. The mall has become popular for branded clothing, luxury sundries, and sporting goods.

Bangkok has many commercial facilities directly connected to city train stations, but few large shopping malls, where customers generally need a car to get to.

A Mitsubishi Estate official said: “Consumers in Southeast Asia are more aware than Japanese consumers of whether it’s a nice place for social media. Our establishment wishes to emphasize seasonal decorations, such as Christmas and spring celebrations.

In Kuala Lumpur, Mitsui Fudosan Co.’s major retail facility, Mitsui Shopping Park LaLaport Bukit Bintang City Center, opened on January 20.

Aeonmall Corp. opened Aeonmall Tanjung Barat in Jakarta last November, its fourth store in Indonesia.

The new projects of these companies have been motivated by the growing number of local populations with higher purchasing power.

It is generally accepted that a country with a gross domestic product per capita above $3,000 has a vibrant consumer market. According to the International Monetary Fund, the figure for Malaysia was around $11,000 in 2021, while Thailand’s was $7,800. The Philippines and Vietnam reached $3,000 a few years ago.

However, retail competition in these countries is fierce. Japanese department stores once made inroads in Singapore and Bangkok, but many pulled out because they couldn’t distinguish themselves from their competitors by selling only high-quality branded goods. Online shopping, which has become common in the region, is also a factor in intensifying competition.

The new trend for Japanese retailers operating in Southeast Asia is to promote aspects of affluent lifestyles, in a bid to show middle-class consumers there that they are different from other stores.

Culture Convenience Club Co. (CCC), a chain bookstore operator, plans to open Bukit Jalil Tsutaya Books in Kuala Lumpur this spring.

“We want to cultivate the culture [through a new bookstore]based on the know-how we acquired in Japan,” a CCC official said.

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