Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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O N T H E G R O U N D : m a c a O Retailers see asia's gambling mecca as gateway to china Macao seems to be moving out of its richer cousin Hong Kong's shadow. Last year The World Bank ranked Macao fourth in the world in GDP per capita — $91,376 per capita — behind Luxembourg, Norway and Qatar, and its economy has grown by a little less than 14 percent annually for 10 years. Gambling is the key growth driver in Macao, the only place in China where gam- ing is legal. And as any visitor to Las Vegas is aware, wherever there is gambling, retail will not be far away. Given Macao's relatively small population of 566,000 (versus Hong Kong's 7.2 million), it is the big-spending tourists taking time out from the tables that underpin its retail industry. Nearly 30 million people visited Macao last year, according to government data, and 64 percent of these were from mainland China, 23 percent were from Hong Kong, and 10 percent came from other Asian nations. Just over half were one- day visitors from the mainland or Hong Kong. Those from mainland China spend more money in Macao than visitors from other places, outspending the average by some 20 percent, according to the Macao government. Better still for Macao's grow- ing legion of retailers, almost 60 percent of the spending goes toward discretionary purchases. Total retail sales reached the equivalent of $8.6 billion last year, up 25 percent from the year before. In Macao's historic old city, stores occupy the ground floors of stately Portu- guese colonial buildings. The names are familiar midmarket brands such as Bossini, Giordano and Levi's. The old city has a significant number of jewelry stores; jewelry accounts for 31 percent of Macao's retail sales ($2.7 billion last year). Macao has been adding about 25,000 square meters (roughly 269,000 square feet) of retail an- nually over the past 10 years. A key retail development marker was the 2006 opening of the Wynn Macao hotel, which introduced such luxury brands as Bulgari, Chanel, Louis Vuitton and Rolex to the market. Since then, the retail-gaming partner- ship has gone into overdrive, though not on the Macao Peninsula itself, where the old city is located. Rather, the focus has been on Taipa Island, which is connected to old Macao by the Sai Van and Friendship bridges. There, in an area called the Cotai Strip, Sands China developed the Venetian casino hotel in 2007. The associated Shop- pes at Venetian houses some 330 bou- tiques. A second Sands China resort hotel, The Four Seasons, opened nearby almost a year after the Venetian, and its associated Shoppes at Four Seasons brought in about 100 additional upscale retail boutiques. In 2012 Sands China opened a third project, Shoppes at Cotai Central, which now offers 140 stores. When the next Sands China project in Macao — Shoppes at Pari- sian — opens late next year, the total number of shops in Macao through Sands alone will begin to approach 800. Meanwhile, Wynn Macao will be contributing 118,000 square feet of retail space in 2016 at its forthcoming Wynn Palace project, on the Cotai Strip. Luxury shopping centers are not the only retail facilities Macao has to offer, but when it comes to catering to the middle market, Macao is no match for Hong Kong. Mass-fashion retailer H&M; has nine stores in the Hong Kong area, and Zara has 11, but neither one has opened yet in Macao — although a Zara Home decor store has, the company's first in Macao. Sands China has moved toward targeting a broader market in its recent expansion of Shoppes at Cotai Central. Like Zara Home, Marks & Spencer too has opened a first Macao store there, and midmarket fashion sportswear brands Nautica and Nike are also part of the mix. The expansion includes a pitch to children's retail as well, with such brands as Armani Junior and Ralph Lauren Kids. There is certainly potential for a broadening of the market in Macao, ac- cording to David Sylvester, Las Vegas Sands' senior vice president of global retail. "With the growing number of main- land Chinese tourists and the increased retail spend in Macao over the past years," he said, "more brands around the world are looking to use Macao as the springboard into China." — Michael Baker 62 S c T / N o V e M B e R 2 0 1 4 s a n d s c h i n a ' s s h o p p e s a t c o t a i c e n t r a l