SCT News

RECon Asia kicks off with full house

Developers, retailers and other executives from around the world converged on Shanghai for the sixth-annual RECon Asia this week. The conference and deal-making event comes amidst robust development in China, India and other parts of Asia, where economies are thriving, in contrast to those of the West.

Shanghai is an apt locale for this year’s conference. The prosperity of China’s mostly urban population of 1.27 billion is growing steadily; its spending has exceeded that of Japan and is approaching Europe’s levels. The number of privately owned cars in China, for instance, has rocketed from 37,000 in 1993 to 35 million today. And today there are 952.3 million cell phones in China, compared to 20,000 in 1990.

Most of the world’s major retailers are already present in Shanghai and China’s other major cities, while others are on the verge of arriving, and global developers are busy providing space for them. Speakers and panelists include executives from Mango China, Walmart Asia, GAP, Inter IKEA Center, Disney Store, Starbucks and Taubman Asia — the regional arm of US mall giant Taubman Centers. RECon Asia 2011's major exhibitors and sponsors included AEON Mall, Ayala Land, Inter IKEA Centre Group, Insite Asset Management Group, McDonald's, SCP, Starbucks, Taubman Asia, Taubman TCBL, The Link REIT and Yangguang Co. Ltd.

China was by no means the only focus this week, however. India offers huge potential, speakers noted. “The size of organized retail is so tiny compared to the overall size of the market, so the opportunities to grow are tremendous,” said Shavak Srivastava, managing director of SQ_FT Consulting, based in the United Arab Emirates.

“The country is very receptive to investment, and receptive to new retail formats,” said Peter Sharp, senior vice president for real estate, new business planning and mergers and acquisitions for Walmart Asia, which has cash-and-carry stores there that it operates through its Bharti Walmart joint venture.

India, however, is hampered by poor infrastructure such as in adequate roads and unreliable electrical supplies. “That is something that needs to be addressed, I think it’s a huge impediment,” Srivastava said. And while it has a “vibrant” mall industry, many are building ill-conceived shopping centers, said Phil McArthur, SCSM, CDP, senior vice president for Ivanhoe Cambridge Investment Advisory (India). “Only the top 10 percent of mall developers are getting it right,” he said. “There is a lack of discipline, a lack of planning and execution, so you do end up with an inferior center.”

Vietnam is also getting more attention, observers said, not least from foreign grocery chains such as South Korea’s Lotte, Germany’s Metro and Britain’s Marks & Spencer.

"Our speakers testify to RECon Asia's growth as a genuine platform for global industry players not only for exploring Asia's possibilities, but also speaking to Asia about its opportunities and challenges," said ICSC Asia Pacific Director Tan Guan Heng. "We've had a remarkable run-up to this year's event," Tan said. "Our exhibition space sold out faster than I've ever seen.” The same goes for the educational programs ICSC offers at such events. “Academy seats disappeared just as quickly."