Tuesday, November 10, 2009

Going to China with CapitaMalls

VENTURING into China might seem a daunting prospect but the Scottish-themed Highlander bar and restaurant reckons it has a great way in – hitching a lift on the back of shopping centre giant CapitaMalls Asia.

The Clarke Quay outlet is one of several in Singapore being encouraged to use CapitaMalls’ expertise and huge presence in the Chinese market to leapfrog in.

The firm has 50 retail malls in 33 cities across China and has already proved a valuable vehicle for small and medium-sized enterprises (SMEs) to expand abroad while minimising the risks.

BreadTalk, watch retailer City Chain and M)phosis are just three of the 18 local companies that have taken up retail space in CapitaMalls centres and there are high hopes that more will be attracted.

CapitaMalls Asia has teamed up with Spring Singapore to organise its second trip to China, this time focusing on SMEs in the food and beverage business.

Spring’s deputy chief executive Ted Tan said the collaboration will allow SMEs to tap CapitaMalls’ network of contacts and its first-hand knowledge of trends in the China market.

‘We want to help eliminate as many variable risks as possible when entering a new market. It’s not always a rosy picture and there will be setbacks but at least you go in with your eyes open and with a shorter learning curve,’ said Mr Tan.

China’s food and beverage sector has enjoyed double-digit growth for the past 18 years and sales are tipped to hit 2 trillion yuan (S$406 billion) next year. It is an exciting industry in a huge market with untapped opportunities, added Mr Tan.

Many of the retailers The Straits Times spoke to have been tenants at CapitaMalls centres in Singapore.

Highlander managing director Clark Martin said he felt comfortable working with a mature and well-organised landlord.

‘We need someone to hold our hand and open the doors. The Chinese market is massive…it’s a little bit more challenging and there is no cookie-cutter approach so we need to get our concept right before going in,’ he said.

He is looking into expanding to Shanghai and Chengdu.

Highlander – a bar which offers over 250 different types of whisky – is a concept that has not yet been fully explored in the Chinese market. Tapas restaurants are also few and far between so that may mean opportunities for his other restaurant, The Tapas Tree.

Mr Tony Tan, managing director of China One, a bar at Clarke Quay, has similar expansion plans for Chengdu. He said Chengdu’s high disposable income and relaxed lifestyle meant an increased propensity to spend on entertainment and leisure.

M)phosis, a womenswear retailer, opened its flagship store in Beijing in April and now has five outlets.

Managing director Hensley Teh said that partnering a local retail player meant he did not have to compete with other international and more renowned brands for retail space.

‘Singapore brands are usually not at the top when a mall is looking for tenants but CapitaMalls gave us a platform to showcase our designs and raise the awareness of our brand,’ he said.

However, China’s sheer size and numbers mean there is no single winning market or strategy.

CapitaMalls Asia deputy chief executive Simon Ho said it was important to realise that China was not a homogenous market and that firms need to focus their resources on a single segment.

‘It’s a very competitive market and that’s where we urge our retailers to exercise caution… (Companies) need to conduct adequate market research and link up with the right partners.’

Source: Straits Times, 10 Nov 2009

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