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Bangkok moving up the table of Asia's shopping capitals

The Ratchaprasong 'Golden Mile' has been at the forefront of retail growth, but how does it compare to the region's top destinations? Bangkok Post - Spectrum

A decade ago, any Thais looking for internationally branded goods such as clothes, handbags, watches or perfumes would have to fly to more established shopping destinations such as Hong Kong, Singapore and Tokyo. Today Thailand's capital city has almost every global brand on offer, from well-known luxury names such as Gucci, Louis Vuitton, Ralph Lauren, Valentino and Giorgio Armani, to other up-market brands such as Miu Miu, Sephora, Victoria's Secret, H&M, Zara Home, Pull&Bear and Harrods Tea Room.

The Ratchaprasong "Golden Mile", the heart of Bangkok's retail market, comprises 11 shopping centres with 462,000mฒ of lettable space along Rama I Road. Attracting hundreds of thousands of local and foreign shoppers on an average day, the area features most of the top international retailers operating in Thailand.

As a result, it is no surprise that Bangkok now ranks 10th on the list of top international retailer destinations in the region in a recent study by Jones Lang LaSalle. Covering 30 cities in 12 countries across Asia-Pacific, the study examines the presence of 100 international retailers, half of them luxury brands and the others mid-tier names. The top five destinations for retailers are:

1. Hong Kong: Hong Kong's dynamic retail market, compactness and highly efficient infrastructure network draw high-spending local residents and visitors, particularly from mainland China. Strong market fundamentals continue to attract leading brands that inevitably look to open flagship stores and use the territory as an entry point into China. Key shopping areas include Pacific Place, Harbour City, Times Square, the Landmark and ifc malls, plus the coveted streetfront stores along Queen's Road Central, in Central and Canton Road in Tsim Sha Tsui. Causeway Bay, meanwhile, boasts the most expensive high street location in Asia.

2. Shanghai: Shanghai is now considered the economic centre of China. A diverse economy and deep consumer base make it a favourite among international brands as a place to test the China market and gain brand exposure. West Nanjing Road is the location with the highest profile in the city, while Lujiazui is catching up. Huaihai Road is popular with flagship stores and has recently undergone significant upgrades to become Shanghai's third major luxury brand destination.

3 Singapore: The city-state has established itself as a strategic location for international retailers looking to increase brand awareness in Asia-Pacific, in particular Southeast Asia. Strong domestic purchasing power plus a magnetic appeal as a tourist destination combine to create a comparatively mature retail market. Top of the shopping list for local residents and tourists is Orchard Road, an iconic strip of designer boutiques and malls, but decentralised areas are increasingly gaining lustre with the completion of new shopping centres.

4 Beijing: In the political and cultural centre of China, demand from luxury brands was modest over the past year, but mid-market retailers continued to expand. As the fashion centre of northern China and with a growing middle class, Beijing is a highly attractive target for international brands to open flagship stores. Wangfujing and Xidan are the two most famous traditional shopping areas, featuring landmark projects including Oriental Plaza, Beijing APM, Joy City and Galleries Lafayette. The central business district and Third Embassy sub-markets have become high-end fashion spots thanks to the large concentration of multinational companies and white-collar workers. Destinations in these areas include Shin Kong Place, one of the most successful up-market shopping destinations in China, as well as China World Mall and Taikoo Li.

5 Tokyo: Japan's capital is a world-renowned shopping hub, attracting consumers with numerous boutiques, department stores and malls. The main shopping destinations including Ginza, Omotesando, Shibuya and Shinjuku collectively form one of the largest retail concentrations in Asia-Pacific. With a large high-income population and a mature retail market, many international brands, in particular top luxury brands, have long-established presences in the city. Recently some international brands have shifted away from distributing products via domestic retailers to directly operated standalone stores. An improving economic environment and rising tourism demand have revived retailer interest, with a number of retailers opening flagship stores in Tokyo.

Three key factors influencing international retailers' presence in Asia-Pacific are domestic spending power, international tourism and retail rents. However, the influence that each of those three factors has on a retail market varies from city to city. In the most expensive locations in Asia-Pacific, there is a clear link between retailer presence and the size of the consumer spending market. Retailers appear more willing to pay higher rents in cities with a bigger market size that provide more opportunities.

In Bangkok, while global retailers are attracted by a combination of rising income levels and typically healthy international tourism, relatively low rents are another attractive pull factor. The same study from JLL shows that Bangkok is the second cheapest retail market in Asia-Pacific. Net quoted rents in Hong Kong, the region's most expensive retail market, were more than 20 times the price of Bangkok. Though retailers do not rely solely on rent levels in choosing a location, lower rents do help make it less costly for them to expand or set up operations.

Bangkok will continue to see expansions and arrivals of existing and new international retail brands this year. Aside from Central Embassy, which opened recently and houses numerous large outlets of luxury brands, four more prime retail centres are scheduled to be completed by the end of this year: Market@Paradise Park, Central Plaza Salaya, Siam Square One and EmQuartier. These and others will provide further lucrative opportunities for retailers.​