A year on, Aeon Mall has proved madly popular but a dozen businesses have still left
The capital’s $205 million Aeon mall opened on June 30 last year to great fanfare.
Following an official ceremony by Prime Minister Hun Sen and Japanese Foreign Minister Fumio Kishida, thousands of prospective shoppers crowded into its air-conditioned halls while tuk-tuks and motos waited an hour just to get near.
One year later, the Cambodia branch of the Japan-based mall chain reports having received 15 million visitors, with the firm now mulling a second store in Phnom Penh as it hedges its expansion on Southeast Asia’s rising middle class.
But while the heavy foot traffic in parts of Aeon’s first mall in Cambodia is indisputable, some stores and restaurants have struggled to compete due to high rents, pricey products and a lack of knowledge about what Cambodia’s long-chased-after consumer class really wants.
Phillip Scott, surveyor at property firm CBRE Cambodia, said that while the urban middle class Aeon is targeting does have the requisite disposable income, it is still “establishing itself” in the Kingdom.
“The difficulty is getting the right product,” he said.
Since its opening, 12 stores are no longer listed as operational by Aeon. Most of those that have left are upmarket restaurants and clothing stores, such as children’s outfits outlet Tiny Toes and Singaporean cafe Miam Miam.
Aeon director Makoto Yajima said that while some tenants had left, their reasons for leaving were “varied” rather than simply being too costly for Cambodia.
“Currently, we are focusing on rising [up with] the Phnom Penh market”, he said.
One consistent bright spot at Aeon is its food court, where crowds routinely pack the area until 9:30pm, dining on chic versions of Cambodian street food or cheap foreign food like sushi and burgers.
But with most items priced less than $4, the food court’s success has caused concern among the standalone restaurants in Aeon.
“Since the food courts of Aeon Mall are selling quite cheap; it is killing other restaurants in the mall,’’ said Tep Virak, general manager of Express Food Group, which runs four franchises in Aeon – The Pizza Company, Swensen’s, Costa Coffee and Dairy Queen.
Virak added that Aeon needed to reign in its high service charges and rental fees and attract more big brands to lure in customers.
High rent and a lack of customers led one upscale eatery, Japanese-French restaurant FINCH, to leave two months ago.
FINCH manager Than Sarith said the restaurant was losing $30,000 a month, in large part thanks to a $10,000-per-month rent.
“It’s a very high price for rent, and we spent too much,” he said.
Other expensive eateries have left Aeon recently such as Fox Wine Bistro, while Maison Kayser’s French restaurant is being replaced with a Domino’s Pizza.
But the challenges are not limited to restaurants. Some other upscale fashion outlets have left as well, such as Thai retailer Espada, while others bemoan a lack of business.
Sim Champisey, general manager of clothing store Le Marais, said “we still need more customers” to cover costs, such as the $3,200 in rent paid every month.
“Some foreigners [come], but Cambodians still do not know about us.”
According to CBRE’s Scott, many of the higher-spending Cambodians that Aeon is aiming for already have the option of going abroad for retail therapy, where they also have more choice.
“If you wanted [to spend] 70 bucks on a shirt, generally you would go do it in Bangkok or in Singapore”, he said.
For now, much of Aeon’s success lies in its food and beverage and entertainment options, Scott added.
“Because it is relatively inexpensive for the consumers, it’s been relatively successful.”
Indeed, the mall’s cinema and bowling complex usually sees a healthy range of teenagers, families, and students streaming in to watch a movie or knock down some pins.
According to Chy Sila, the local partner of Thailand-based Major Cineplex, the cinema is now Phnom Penh’s largest by attendance.
When Jurassic World opened in Cambodia last month, for example, the cinema sold 6,000 tickets in one weekend, its highest so far.
“Major Cineplex is doing really good,” Sila said.
Despite some challenges – Aeon Cambodia director Yajima says he isn’t calling the mall a success story just yet – the Cambodian market for Japanese goods is expected to grow in size and strengths thanks to ventures like Aeon, said Masashi Kono, director general of the Japan External Trade Organization.
“At this moment, it’s not so strong, but after a big shopping mall appears, peoples’ lifestyles would change”, he said.
“For the future, there is so much possibility and potentiality in this country.”