Aeon Mall’s vision explained

Costing more than $200 million, the four-storey Aeon Mall in Phnom Penh, set to open  in July 2014, is being hailed as Cambodia’s biggest shopping complex. Makoto Yajima, managing director of Aeon Mall Cambodia, talked to Mak Lawrence Li about the project.

What makes this project stand out among similar ventures in  in Phnom Penh?

The shape of our mall is in a “Two Anchors with one Mall” format, which consist of two or more large-scale anchor stores connected with a mall area occupied by specialty stores. While other facilities in Cambodia are mainly in tall buildings, ours is long on the site which is quite different. Our mall includes a huge cinema complex and a brand new bowling centre, which is comfortable and exciting for customers to visit.

Why come to Cambodia now?

The economic growth is rapid here in Phnom Penh, and it is also a dynamic market with such a huge younger generation. There is no special reason for the timing. Time is now for us, and from now on we will do our best for Cambodia.

What does Aeon Mall bring to Cambodia?

A new style of shopping is coming here. Citizens, especially for the younger generations, always seek new fashion, services and amusement facilities. What we want them to realise is that shopping can indeed combine with entertainment, all together as a whole in one place. We would also like to offer three things: high quality products, excellent services and adequate parking space. Many malls in the city do not consist of enough parking spaces, but we do and there will be 1,400 for cars and 1,800 for motorbikes.

What are your marketing strategies? Any targeted customers or income groups?

We call it the ‘one-stop solution’. Four aspects: shopping, community, entertainment and ecology. Customers can fulfill all their needs here. And the location we choose is located very near to the city centre so people can get here easily, which is already another strategy. We are very confident we will be competitive because of our services provided. Every citizen in Phnom Penh will be our target; we offer high quality products and services with affordable prices.

What do you want to accomplish in the long term?

Our primary aim is to introduce our brand to citizens, letting them know about the unique styles of Aeon. The second thing is training up local staff with Aeon Mall standards, which is ‘serving with hospitality’. We have looked at some of the shopping situations here and staff used to eat or sleep inside the stores, they don’t pay much care to the customers. We want all our customers to enjoy proper services and staff will also be confident in serving clients.

How about volume and spending? Any estimates or predictions?

Regarding sales or revenue, it is hard for us to disclose at the moment but we hope for up to 10 million visitors at the mall in the first year.

What are your future plans in Cambodia?

We will consider opening two or three malls in Phnom Penh, if the first one is successful enough. We want to stick as the closest retailing company in every place for serving our customers, and the Aeon Mall Cambodia Company would want to
become a local enterprise eventually.

How would you foresee malls developing in Cambodia?

There will be more and more competitors and I think it is good news for us. Keen competition means fast growth and the customers will have more choices too.

By Mak Lawrence Li│14 June 2013│The Phnom Penh Post

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Global titan WPP aims to ‘shake up’ the market

The holding company that manages more than US$70 billion of advertising globally a year for its clients, including Coca Cola and Unilever, has accelerated its drive to establish itself here over past two months, through four of its global agencies.

Its recent licensing, joint venture and affiliate deals will allow WPP to offer clients interested in Myanmar the same template of integrated research, advertising, marketing and public relations services that it provides in more than 100 countries, executives from different units of the holding company said.

WPP CEO Sir Martin Sorrell said the deals give it a “first mover” advantage that could see it duplicating its success in other high-growth markets. “We’ve been in China since way before it became fashionable,” he said during an interview in Yangon on June 5, prior to attending the World Economic Forum on East Asia in the capital. WPP’s revenues in China, about $1.5 billion last year, are five times those of its nearest rivals, Mr Sorrell said while handling a fist-sized jade stone given to him by the owner of a PR firm here.

He had been told the jade stone would make him “healthier and calmer”. It could also come in handy as a weapon if he was asked an offensive question, quipped the frequently quoted CEO.

Mr Sorrell pioneered the global consolidation of public relations, advertising and market research in the 1980s and 1990s through a series of often hostile takeovers and rapid expansion into high-growth markets from East Asia to South America and the former Soviet Union.

WPP now encompasses a roster of global ad and PR agencies, most with local affiliates worldwide, and has stakes in a diverse range of online and digital pioneers, from Vice Media to 24/7.

“I like the idea that we’ve been very aggressive in terms of building our business here,” Mr Sorrell said, pointing to the lifting of sanctions by the EU as the trigger. The shift in attitude towards Myanmar in the West has created a massive opportunity for his clients and his company, he added.

WPP established a toehold in Myanmar last year by buying a stake in Today Advertising through its unit Ogilvy & Mather, a global PR agency. Last month it formed a joint venture, Y&R Yangon, with K-Noke Advertising through its unit Y&R, a global advertising agency.

In April its unit JWT, another global ad agency, signed an affiliate agreement with Yangon upstart Mango Marketing. In March its unit TNS became the first foreign firm to receive a licence to conduct market research in Myanmar. Another unit, Millward Brown – which says its works with 90 percent of the globe’s top brands – has also applied for a licence to do market research here, Mr Sorrell said, expressing optimism that it will receive one.

WPP has moved quickly into Myanmar because its clients expressed “a phenomenal degree of interest” in the market, particularly those in the “fast-moving consumer goods” sector, Mr Sorrell said, adding that he was surprised “competitors are not being more aggressive”.

Myanmar’s market interests WPP’s clients because of its large consumer base and its growth potential, with three sectors – natural resources, infrastructure and tourism – among the most attractive. Mr Sorrell said there are also significant opportunities in soft infrastructure, such as telecom and ICT devices, saying there would likely be “a very fast take-up of the Internet” and that people in Myanmar – like those in other developing countries – were likely to “leapfrog the PC and go straight to the Internet via a phone”.

Research conducted by local firms shows that the leap-frog effect is old news: About 22 percent of households in Mandalay and Yangon already has access to the Internet, most often through a smart phone, according to research by Myanmar Survey Research.

Mr Sorrell said WPP decided to start market research from scratch in Myanmar – rather than partner with a local firm – because its market research is the best. It also accounts for 25pc of the holding company’s revenues, he added.

Myanmar firms, however, are moving swiftly to differentiate their research from that conducted by WPP’s units, arguing that their local knowledge gives them the upper hand. When TNS launched its debut report on the consumer market in Myanmar on May 9 at the Park Royal Hotel, they held a rival conference to tout their research at the Sedona Hotel on the same day.

They also announced the formation of the Myanmar Market Research Association.

One local researcher said association members already provide research to 90pc of the brands WPP works with, and that WPP units – including TNS – have been hiring local firms to dosurveys and analysis for them.

“There’s a lot of spin going on,” another researcher said. “Nobody has been ‘waiting’ for WPP.” A WPP executive said such talk is common when WPP “shakes up” new markets.

By Vincent MacIsaac   |   Monday, 10 June 2013

Vietnam Airlines moves towards IPO

HA NOI (VNS)— National flag carrier Vietnam Airlines has seen some progress in its much delayed equitisation process with news that the carrier will start preparing the documents for its initial public offering (IPO) during the next two months.

The Dau tu chung khoan (Securities Investment) newspaper has quoted its sources as saying Vietnam Airlines in April signed an IPO consultancy contract with a joint venture including Morgan Stanley, Citigroup and the two domestic firms BIDV Securities Co and Viet Nam Valuation Finance Consultancy JSC.

The consulting partners are building a plan to assess the carrier’s business situation. After the preliminary report, which is projected to be completed by the end of June, the carrier will announce the timetable for pre-IPO work such as a business valuation report, prospectus and other necessary documents, said a source familiar with the deal in the newspaper.

“Vietnam Airlines is determined to push up its IPO process and offer stakes to strategic partners. This is one of the necessary solutions to promote the group’s sustainable development,” the source said.

The corporation declined to give any details on the IPO when contacted. The equitisation of Vietnam Airlines, leading up to one of the most anticipated IPOs in Viet Nam, started five years ago but missed several deadlines due to unfavourable market conditions.

The Minister of Transport, Dinh La Thang, in March urged the carrier to complete equitisation by the end of this year.

According to market insiders, the latest developments do not guaranteed that the airlines’ IPO will be implemented soon because BIDV, one of Viet Nam’s four biggest banks, took four years to equitise (from signing the consultancy contract to officially selling shares publicly) in December 2011.

Since the IPO, BIDV has continued to delay its listing on the stock exchange even though regulations clearly call for a public company to list shares within a year of its IPO.

“Only when a strategic investor carries out a review with due diligence will we feel more sure about progress towards Vietnam Airline’s IPO,” said a director of a financial consultancy company who wished to remain anonymous.

“In addition, though documents for the IPO have been carefully prepared, it will take time for authorities to approve it,” he added.

Vietnam Airlines plans to sell 20-30 per cent of its stakes to the public, 10-20 per cent of which will be sold to foreign investors, while the State will retain its holdings from 70-80 per cent.

The carrier expects to collect no less than US$200 million from the IPO.

After being equitised, Vietnam Airlines’s equity is estimated to be at about VND14.4 trillion ($680 million), and expected to reach VND21.3 trillion ($1 billion) by 2015. — VNS

New Cambodian Airlines, partner to spend $1 billion

Manila (Philippine Daily Inquirer/ ANN) — Philippines’ San Miguel Corp. and its Cambodian partner are planning a US$1.5-billion maiden fleeting program for their newly created Cambodian Airlines.

About 16 to 22 aircraft will likely be deployed by Cambodian Airlines in the next two years, said Ramon S. Ang, president of San Miguel Corp. and flag carrier Philippine Airlines (PAL).

Last month, PAL struck a deal to set up the new airline in Cambodia in partnership with local tycoon Okhna Kith Meng. PAL controls 49 per cent of the new airline.

The move is an attempt to incubate a new airline in a new market that is among the least developed in Southeast Asia but which enjoys rapid growth.

At the sidelines of the stockholders meeting of Ginebra San Miguel, Ang said Cambodian Airlines would also enter into a “code-sharing” arrangement with PAL, through which the latter could earn additional revenue of $300 million to $400 million per year.

“Code-sharing” is a reciprocal agreement through which two or more airlines offer their passengers single booking, ticket and check-in flight to a certain destination.

“We are studying to deploy at least 16 to 22 planes immediately,” he said.

Ang said the new carrier would initially cater to regional destinations and later to cover domestic Cambodian flights.

The project value of $1.5 billion assumes an initial fleet of 20 planes.

PAL’s equity contribution is expected to be its pro-rated share of 30-per cent usual equity contribution.

In the first year of operations, Ang said Cambodian Airlines would likely have eight to 10 planes and operate more in the second year. “If business is good we’ll increase some more,” he said.

Asked how Cambodian Airline could acquire new planes that soon given the usually long procurement process, Ang said: “We have already acquired a lot of aircraft for PAL and some of these can be redeployed.”

Aside from Cambodia, SMC is also looking at Vietnam and Myanmar, he said. “We’ve been offered by lots of friends and bankers to take a look at opportunities. We are at the moment assessing those opportunities,” he said.

In 2011, the San Miguel group also made a strategic move into Malaysia with the acquisition there of the downstream petroleum businesses of American multinational oil and gas company Exxon Mobil.

New Cambodian Airlines, partner to spend $1 billion

Manila (Philippine Daily Inquirer/ ANN) — Philippines’ San Miguel Corp. and its Cambodian partner are planning a US$1.5-billion maiden fleeting program for their newly created Cambodian Airlines.

About 16 to 22 aircraft will likely be deployed by Cambodian Airlines in the next two years, said Ramon S. Ang, president of San Miguel Corp. and flag carrier Philippine Airlines (PAL).

Last month, PAL struck a deal to set up the new airline in Cambodia in partnership with local tycoon Okhna Kith Meng. PAL controls 49 per cent of the new airline.

The move is an attempt to incubate a new airline in a new market that is among the least developed in Southeast Asia but which enjoys rapid growth.

At the sidelines of the stockholders meeting of Ginebra San Miguel, Ang said Cambodian Airlines would also enter into a “code-sharing” arrangement with PAL, through which the latter could earn additional revenue of $300 million to $400 million per year.

“Code-sharing” is a reciprocal agreement through which two or more airlines offer their passengers single booking, ticket and check-in flight to a certain destination.

“We are studying to deploy at least 16 to 22 planes immediately,” he said.

Ang said the new carrier would initially cater to regional destinations and later to cover domestic Cambodian flights.

The project value of $1.5 billion assumes an initial fleet of 20 planes.

PAL’s equity contribution is expected to be its pro-rated share of 30-per cent usual equity contribution.

In the first year of operations, Ang said Cambodian Airlines would likely have eight to 10 planes and operate more in the second year. “If business is good we’ll increase some more,” he said.

Asked how Cambodian Airline could acquire new planes that soon given the usually long procurement process, Ang said: “We have already acquired a lot of aircraft for PAL and some of these can be redeployed.”

Aside from Cambodia, SMC is also looking at Vietnam and Myanmar, he said. “We’ve been offered by lots of friends and bankers to take a look at opportunities. We are at the moment assessing those opportunities,” he said.

In 2011, the San Miguel group also made a strategic move into Malaysia with the acquisition there of the downstream petroleum businesses of American multinational oil and gas company Exxon Mobil.

Luxury tourism slowly on the rise

A helicopter flight tour to Preah Vihear is just one part of the 10-day Cambodia Immersion for Millionaires Tour launched this week. The cost per person? $25,000.

According to Christopher Gramsch, sales manager for organiser Khiri Travel Cambodia, there is increasing demand among high-spending travellers and calls Cambodia a country with potential.

“What we want to show is that it is possible for even the most high-end clients to be able to experience the same level of luxury and quality that they could in Thailand or Vietnam.”

With its many sites and some high-end accommodation, Cambodia offers potential for luxury tourism. But although demand has been growing, mostly among foreigners, challenges such as a lack of infrastructure and marketing still limit high-end travelling, industry experts say.

“I think it is a market for Cambodia because we have a lot of high-end accommodation,” said Ang Kim Eang, president of the Cambodia Association of Travel Agents.

But “the biggest challenge is the promotion”, he said.

Jay Tindall, co-founder and COO of Bangkok- and New York-based Remote Lands said: “Cambodia is a good market for high-end luxury tourism. We have been operating high-end tours to Cambodia for the past seven years.

“The main challenge is the lack of infrastructure in the more remote areas,” he said.

Along the garment, agriculture and construction sectors, tourism is a crucial industry for Cambodia’s growing economy, contributing around 12 per cent to the gross domestic product. Data from the Ministry of Tourism show that the number of international tourist arrivals reached 3.58 million in 2012, a 24.4 per cent rise from 2.88 million in 2011.

According to Ho Vandy, co-chair of the government-private sector working group on tourism, while Cambodia’s market and demand for luxury tourism is still small, it will gradually increase in the future.

He said that in the past five years there had already been a change, with wealthy foreigners but also Cambodians hiring private jets to fly in and out of the country, a sign of the growing demand for luxury travel.

Ang Kim Eang said promotion for the sector also came through world-class movie productions, such as the movie Tomb Raider. “This kind of publication introduced Cambodia to the high-end tourism,” he said.

Products such as the new millionaire trip are “positive to the country”, he said. “It’s reflecting the country’s growth and what Cambodia has to offer.”

Tindall said their clients frequently fly in by private jet, stay at exclusive resorts such as Amansara in Siem Reap or Raffles in Phnom Penh, or the new Song Saa private island. “[Luxury tourism] is not new, but new hotels like Song Saa help bring added awareness.”

However, while Cambodia has many resorts, “there is a lot of room for growth, whereas Thailand is more saturated at this point,” he said.

“Thailand is a much more developed market than Cambodia, and there are many more options for hotels, yacht, and private jets. In fact most private jets that we fly to Cambodia are based in Thailand.”

However, high-end tourism with such prices remains out of reach for a vast majority of Cambodian tourists.

Both Ho Vandy and Ang Kim Eang said products like the millionaire’s trip mostly target foreigners.

That is where a major challenge lies, according to Ang Kim Eang. He says for a $25,000 trip, it is not easy to find customers.

“We don’t lack the product, the supplier for the high end tourism, but I think we lack the PR and marketing.”

For Tindall, the challenge lies in access to remote areas. “Phnom Penh and Siem Reap have good quality hotels and acceptable infrastructure; however there are many interesting parts of Cambodia that are still difficult to reach and have limited options for accommodation at the high end and poor infrastructure. These places include Batambang, the Cardamom Mountains [and] Mondulkiri.”

By Anne Renzenbrink │25 April 2013│The Phnom Penh Post

Group Lease to fund Cambodia operation

Bangkok (The Nation/ANN) — Group Lease has decided to raise the capital of its wholly owned Singaporean subsidiary Group Lease Holdings to serve as the main funding source for its Cambodian motorcycle leasing operations after six months of satisfactory trial operations there.

“We are now ready to launch full operations there,” Mitsuji Konoshita, chairman and chief executive officer, said yesterday.

There has been not a single case of non-performing loans among the first group of 200 Cambodian customers.

There were only two stolen motorcycles, which were fully insured.

Cambodia, which is managed by Group Lease’s wholly owned subsidiary GL Finance, will increase its accounts to 1,000 next month and 2,000 next quarter as planned.

“We could have pushed the numbers sooner, but we wanted to make sure that our Cambodian operations proceed in a prudent and solid manner,” Konoshita said.

To ensure that the financial resources for the Cambodian operations are adequate and to comply with the National Bank of Cambodia’s regulations on capital sufficiency, the registered capital of the Singapore unit will be raised from 3 million Singapore dollars (Bt69.75 mln) to S$4.6 mln, while paid-up capital will increase from S$757.500 to the full S$4.6 mln, according to a filing to the Stock Exchange of Thailand.