Retail in Asia


EXCLUSIVE INTERVIEW with Pavilion Kuala Lumpur CEO

Following the opening of its first location in September 2007, Pavilion Kuala Lumpur has broken retail boundaries with cultural immersion. The award-winning shopping destination now consists of a premier shopping centre, two blocks of serviced apartments, an office block and a five-star hotel. The group recently celebrated the 11th anniversary of their Japanese-themed precinct – Tokyo Street.

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With Gen Zs on track to becoming the largest generation of consumers this year, Pavilion KL has implemented unique retail concepts and experiences to engage this younger demographic. For example, the AniManGaki convention and Tokyo Street anniversary pop-ups.

Retail in Asia had the opportunity to speak with the CEO of Pavilion Kuala Lumpur, Dato’ Joyce Yap, to discuss the company further. The discussion also included the benefits of quarantine restriction easing to the retail industry, Malaysian retail outlook for the rest of the year, and what shoppers can look forward to at Pavilion KL.

RiA: How does Pavilion KL bring a piece of Japan to Malaysia with the first-of-its-kind cultural precinct in the form of Tokyo Street?

Yap: As Malaysia’s premier shopping destination and a defining authority in fashion, food and urban leisure, we strive to provide unique and immersive retail experiences. Our research team found that Malaysians love Japanese concepts and food, so Pavilion KL decided to bring a piece of Japan to Kuala Lumpur and invited a Japanese architect to bring the award-winning Tokyo Street precinct to life in 2011.

Source: Pavilion KL

This year, we celebrate Tokyo Street’s 11th anniversary as well as the 40th anniversary of Malaysia’s ‘Look East Policy’. Over the past 40 years, Malaysians have been inspired by the Japanese work ethic, business management techniques, and expertise. Through this educational and cultural exchange, the diplomatic relationship between Malaysia and Japan has grown steadily over the years.

Pavilion Kuala Lumpur is proud to play a part in strengthening the bilateral relations between our two countries through retail. Tokyo Street not only houses several Japanese retail and F&B brands, we also collaborate with Japanese architects, artisans and organisations to shine a spotlight on Japan’s rich culture and heritage – without having to leave the mall, or Malaysia!

RiA: Did the pandemic drive footfall to the precinct due to Malaysians’ urge to travel?

Yap: The Tokyo Street precinct has always been regarded as a “must-see” shopping destination by shoppers in Kuala Lumpur. During the pandemic when Malaysia was still under lockdown, shoppers were able to “travel” to the streets of Ginza by visiting Tokyo Street at Pavilion KL.

Tokyo Street is known for its blending of traditional and contemporary Tokyo experiences, establishing itself as Bukit Bintang’s “Tokyo” where shoppers can experience Japanese architecture, art, culture, food and shipping all in one place.

When the movement control order (MCO) lockdown was lifted in 2021, we saw a spike in foot traffic at Pavilion KL. After being confined to their homes during the lockdown, shoppers were seeking escapism and a feel-good boost that shopping gave them. They particularly enjoyed the immersive retail experience Tokyo Street provided that made them feel like they were visiting the streets of Tokyo!

RiA:  With the increased interest in experiential retail from consumers, how do you expect to evolve ‘Tokyo Street’ in the coming years?

Yap: We always strive to outdo ourselves every year with new and out-of-the-box ideas to celebrate Tokyo Street’s anniversary. In the past, various Japanese manga icons and celebrities, such as Doraemon, PIKOTARO and AKB48 (Akihabara 48) have made appearances at our Tokyo Street retail experience.

Source: Pavilion KL

This year, we focused on experiential activities to engage shoppers and drive foot traffic to Tokyo Street. Among the highlights was the ‘Art of Kimono’ exhibit featuring the largest collection of kimonos in Malaysia; the AniManGaki animation, comics and games convention that featured pop-up booths, games, competitions and performances; as well as several engaging Japanese cultural activities and workshops. Overall, we aim to share a piece of Japan with Malaysian shoppers by giving them a chance to learn about the rich culture and heritage of the ‘Land of the Rising Sun’.

RiA:  With Gen Zs on track to becoming the largest generation of consumers this year, how does Pavilion KL engage this younger demographic?

Yap: Tokyo Street has proved popular among the younger demographic of Gen Zs and Millennials. Research indicates that Gen Zs are becoming significant retail spenders who are spending more time in brick-and-mortar stores. It is important for us to attract this younger demographic through an exciting retail mix and creating new experiences.

On top of fulfilling shoppers’ wants at Tokyo Street, the precinct is also the destination for social experiences. This year’s 11th anniversary celebration featured AniManGaki cosplay and dance competitions, pop-up marketplace, workshops, exhibits and live musical performances. Shoppers were also treated to an exclusive meet and greet with popular Malaysian cosplayers Hakken, YingTze and Preston, that brought thousands of cosplayers, anime lovers and Japan-enthusiasts to the mall.

Tokyo Street has also strong partnerships with organisations such as Japan Expo Malaysia to not only bring in unique Japanese products, but also musical acts from the likes of pop sensation PIKOTARO in 2018, female idol group AKB48 (Akihabara 48) in 2019, and iconic manga characters such as Doraemon in 2019. Such performances and pop-ups not only attract traffic to the precinct, but ultimately acts as a domino-effect that benefits tenants and the mall overall.

RiA: What retail trends have you noticed in the Malaysian market in the past year?

Yap: After being cooped up at home during the pandemic, shoppers are looking to treat themselves. With the lifted restrictions and Malaysia firmly in the endemic phase of recovery, our luxury tenants have doubled down in offering unique in-store experiences to bring shoppers back to the store. From offering value-added services, as well as limited-editions and limited-supplies products, shoppers are eager to come back to the store to experience service and the level of exclusivity luxury shopping brings.

With both local and international shoppers coming back to the mall, we are seeing a strong demand for luxury goods at Pavilion KL with long lines in front of luxury stores. This has been further stimulated by the rewards and gifts offered by Pavilion KL.

Shoppers are also increasingly seeking ‘retailtainment’, both inside and outside shopping spaces, as well as omnichannel and immersive shopping experiences. They’re also craving social experiences to bond and reconnect with family and friends. As a result, we have seen a growth in demand for F&B experiences as is evident in the recent increase of new lifestyle restaurants and cafés opening in our malls.

Source: Pavilion KL

At Pavilion KL, we have recently welcomed new F&B brands and concepts such as Baan Phadthai, OCEANTWE12VE, The Coffee Academics and %Arabica; with Arthur’s Storehouse (The Guinness Experience) and RasaNya Steamboat both coming soon. New brands such as OJA, Fullbud and NUTTEA & Caffike will soon be opening in both Pavilion KL and Pavilion Bukit Jalil.

Ultimately, shopping malls have evolved beyond being a retail hub, and have transformed into a vibrant retail mix that combines shopping, F&B, entertainment, learning, arts, and health and wellness.

RiA: Should retailers expect a rebound back to pre-pandemic level over the next year?

Yap: We have noticed more shoppers coming back to malls this year and I am positive that this upward trajectory will continue with more tourists visiting Malaysia and the rest of the region now that borders are opened.

Retail Group Malaysia already saw record growth in the second quarter of this year, surging 62.5 per cent year-on-year, which was attributed to the Hari Raya festival and the easing of Covid-19 operating restrictions. With the upcoming year-end sales and Christmas celebrations, I expect the growth rate to continue on an upward trend in the last quarter of the year.

Despite the positive outlook, there is no doubt that the retail industry will also face challenges in the future. However, these challenges are global problems rather than regional ones – such as, inflation, supply chain disruption, labour shortages, and cash flow issues.

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I expect shopping malls and tenants to be more selective and cautious when opening new stores. The team at Pavilion REIT aims to create lasting partnerships to build sustainable businesses, where both parties thrive together through the uncertainties of our current economical and political climate.