Why Bangkok has dodged the retail apocalypse – luxury shopping CEO on keeping malls fresh and offering experiences
The woman heading family-run Central Group, Yuwadee Chirathivat, sees renovation and innovation as keys to the continuing success of bricks-and-mortar stores in the Thai capital … and 10 million Chinese visitors too
The most talked-about trend in retail last year? Store and mall closures, if you listened to the grim news from the US and the UK. The so-called “retail apocalypse” was a constant refrain, blamed on online shopping or millennials’ desire to enjoy experiences rather than things.
It’s a different story, however, in countries such as Thailand. You only have to spend a day in the bustling centre of Bangkok to see that bricks-and-mortar retail is not just alive and well, but thriving. From the never-ending stretch of interconnected malls along the city’s crowded skywalk to the construction sites everywhere, it’s a rosier picture than that of the “dead malls” of the US.
The latest and most high-profile development on Bangkok’s retail scene was the opening of Central Embassy last year. The luxury lifestyle mall is part of Central Group, one of the Thailand’s largest retail and real-estate developers, owner of shopping centres including Central World and Zen.
Founded more than 70 years ago by a Hainanese immigrant to Thailand, Tiang Chirathivat, the company has expanded across the country and overseas, and is still helmed by the patriarch’s descendants.
Overseeing the brand’s retail portfolio is chief executive officer Yuwadee Chirathivat, who is also in charge of prestigious department stores such as La Rinascente in Italy, Illum in Denmark and KaDeWe in Germany, which were all acquired by Central Group.
A firm believer in the power of bricks and mortar, Yuwadee has been working at the family firm since the early 1980s.
“If you compare the West to Thailand, I think in the West, especially in the US, they don’t make many changes to malls and department stores whereas we renovate and upgrade them at least every four years,” she says when we meet her in her office above Central Chidlom in Bangkok.
“We’re renovating Central World. It will be completed by the end of this year, Zen too and these are major renovations. I think that when you update a store, it becomes more exciting and fresh and new ideas come in and it creates excitement for customers. We try to create a lifestyle element in the malls and stores; we don’t want to just sell merchandise any more.”
Take a walk through one of Bangkok’s retail complexes on any day of the week and you’ll realise that shopping is a way of life in the city, a fun pastime that is far from a mere transaction. You may attribute it to the weather, as the relentless heat pushes people inside air-conditioned spaces to find respite, but it’s more than that.
From live performances and classes to showcases of Thai designers, malls such as Central World and Zen always have something going on, luring shoppers who end up wandering for hours around these sprawling temples of consumerism. “Every October, for instance, we have a flower show and it’s the talk of the town,” says Yuwadee. “We decorate Central Chidlom and Central Embassy with fresh flowers and it’s very beautiful.”
Experience is a buzzword when it comes to retailing these days and it’s definitely something that malls in Thailand, and Asia in general excel at, which perhaps explains why the threat to digital sales feels less menacing in the region.
“The online business for us is very small, about 1 per cent of our total sales in the group, but we believe in online,” says Yuwadee. “We don’t just focus on one or the other, online or bricks and mortar. We want people to come to our stores and to shop however they want, so our approach is omnichannel.
“A lot of our customers buy something online but pick up from a store, for instance, or we communicate with them via chat services and they tell us what they want and they can pick it up at the shop or we can send it to them.”
While she emphasises her commitment to catering to both the local and foreign shoppers, Yuwadee recognises the vital role of Chinese travellers.
“They’re the most important group and contribute 30 per cent of tourist sales for us and 20 per cent of total sales. They’re the number one tourists in Thailand,” she says.
“Last year we had nine million visitors from China and this year we expect more than 10 million, so they’re very important to us and to our properties around the world. The population is so big and they want to see the world. They’re more educated and don’t just go to Italy or France like they used to. They are starting to explore new places like Denmark.”
“They’ve also adapted fast and now the Tourism Authority of Thailand is targeting the top tier ones, not just group tours, and they’re the ones responsible for the majority of tourist sales for us,” she adds.
Although Yuwadee herself has never been to Hainan and was born in Thailand, her family has kept a strong connection to China. They’ve been there several times and have given a lot back to the community in their hometown.
That bond is coming full circle: Central Group has recently entered a joint partnership with Hongkong Land to build a new mall just beside Central Embassy in Bangkok, on a prime piece of land acquired from the British embassy.
“The joint venture with Hongkong Land is the most important project and will take about five years to complete,” she says. “It’s going to be a lifestyle concept and we want to do something unique.” While it’s too early to make predictions about what the new mall will be like, expect to see lots of innovative concepts such as Central Embassy’s Open House, a co-working space/gallery/bookstore, and Siwilai City Club, a space with an eatery and bar, which have quickly become popular spots among the hip crowd in Bangkok.
As for whether the political unrest and scattered episodes of violence that plague Thailand from time to time pose a risk to her plans, Yuwadee is quick to dismiss such concerns, betraying the equanimity and resilience long associated with the country’s denizens.
“People nowadays forget fast,” she says. “We’re only affected for a short period but then people go back to their lives. Life is so short so you can’t stop living and enjoying. If you’re afraid of everything, you can’t go anywhere.”
Saying that, working for a family business comes with its own set of challenges (“of course we argue and there are disagreements but at the end of the day we find a solution because my grandfather always stressed upon us the idea of being together,” she says).
Yuwadee has never felt she has been held back as a woman CEO in Asia. “Actually, Thailand is one of the top three countries in Asia with more women in leadership along with Indonesia and the Philippines,” she says.
“It’s a challenge because we have to wear many hats and be wives, mothers and daughters. So many people expect a lot from us and we have to manage our roles very well to do business but I never give up, I’m always trying to find solutions and solve problems.
“I find the younger generation very impatient and restless, they want everything to happen fast, but that’s not how it works. You have to be patient, and that’s what I try to teach them because they’re the new leaders.”