BANGKOK — Thailand has a new luxury retail center here that developers hope will lure 100,000 visitors a day to about 250 shops.
The three-month-old Siam Paragon, built on downtown property that was the site of the Siam Intercontinental Hotel and owned by Thailand’s royal family, is a 5.4 million-square-foot shopping complex in the heart of this city’s retail district.
The $365 million mall features a 108,000-square-foot saltwater aquarium, marble floors and gourmet food, among other attractions, on a 21-acre site. Like the Emporium Center, a second shopping center owned by Siam Paragon’s developers that anchors the other end of Bangkok’s shopping district, there is also a multilevel Paragon department store in the center.
The Paragon department store is 860,000 square feet. Surrounding it are high-end retail shops such as Giorgio Armani, Emporio Armani, Chanel, Dolce & Gabbana, Chloé, Bottega Veneta, Jimmy Choo, Bulgari, Hermès, Escada, Gucci, Salvatore Ferragamo and Versace.
“We are not selling merchandise, we are selling passion and desire,” Kriengsak Tantiphipop, chief operating officer of Siam Paragon Development Co., said in an interview.
One floor of the shopping center is devoted to what is called a World of Luxury, which includes jewelers Van Cleef & Arpels, Cartier, Karat and Prima Times. The third floor will showcase automobile and yacht dealers such as Ferrari, Lamborghini, Maserati and Lee Marine. Also included are audio and video retailers, bookstores, beauty and wellness spas, technology stores, furniture stores, restaurants and a gourmet market.
Tantiphipop’s vision for the mall is to lure tourists and well-heeled Thai shoppers. Among the biggest target markets are customers from Hong Kong and Singapore. He described the main shopping district in Bangkok, which flanks a one-mile stretch of Sukhomvit Road down to Rama I in the Ratchaprasong area of Central Bangkok, the “Fifth Avenue of Thailand.”
With the mall open, Tantiphipop said his next challenge is to refine his marketing strategy. With the goal of 100,000 visitors daily, he said, “Our target market is quite broad and we’re still finding our focus.”
Tourism is Thailand’s biggest industry, and last year 13 million visitors spent about $10.1 billion, Tourism Authority statistics show. Tourism in 2006 is expected to increase to 15 million visitors and an anticipated $13.3 billion in revenue.
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More than half the visitors to Thailand are from East Asia, and Europeans constitute 29 percent of tourists, the Tourism Authority said. With that much at stake, the Thai government takes tourism seriously, and much of its actions are aimed at attracting more visitors and protecting the country’s reputation.
Rebuilding was rapid after the 2004 tsunami on Thailand’s coast. When a British tourist was murdered on a Thai beach last December, two suspects were arrested, tried, convicted and sentenced to death within three weeks of the crime as the government sought to reassure visitors that Thailand was safe. The government also is changing tax laws to permit shoppers to refund not only the value-added tax, but also the import tax of luxury products such as apparel, leather goods and cosmetics.
The face of Thailand’s retail industry shifted as the country recovered from the 1997 Asian financial crisis, according to a 2004 report by Global Information Inc. Small, independent retailers have been replaced with modern, often foreign-owned operations, and speciality retailers are gaining ground. Total retail sales by 2008 are expected to reach $62 billion, with $35 billion of that coming from nonfood items. The number of retail outlets is anticipated to rise to 472,500 outlets in 2008, with 117,340 of those nonfood retail outlets, Global Information said.
Central Department Stores, owned by Thailand’s biggest retail company and one of Siam Paragon’s primary competitors, spent almost $20 million sprucing up its Chidlom flagship as it braced for the opening of the new mall nearby. To lure high-end shoppers, it added the apparel lines of Charles Jourdan, Vivienne Tam, Strenesse, Juicy Couture Accessories, Anne Klein, Diesel, ck Calvin Klein, Hugo Boss and Dunhill. It also added luxury watch brands Piaget, Patek Philippe, Chopard, Bulgari and Omega Concept Boutique.
“Competition will always be there,” Yuwadee Bhicharnchitr, who rose in her family’s business to be president of Central Department Store Co., said in an interview. “Our customers are gaining more income. Our middle class is growing and so retailers must offer better quality and better merchandising.”
Central’s target is middle- to high-end, she said, adding, “Price is not the only issue. Our customers are looking for quality for value.”
Bhicharnchitr said Thai shoppers preferred one-stop shopping in their department stores. The Central Chidlom has seven floors of merchandise, including a grocery in the basement and restaurants on the top floor overlooking Bangkok’s skyline.
“The Asian lifestyle is different,” said Tantiphipop of Siam Paragon. “We like to go shopping with friends and family and make an outing out of it. Americans are more independent. Shopping in Asia is more of a social function, and Asians are more materialistic and appreciate nice things.”
In addition to revamping, Central Chidlom is embarking on a $1 billion expansion of its Zen store, which is geared to trendy, younger shoppers. In the shadow of Siam Paragon at Central World Plaza, it is expected to reopen in May.
Also in the Ratchaprasong area, the upscale 136,000-square-foot shopping center Gaysorn Plaza has spent $60 million on a face-lift. The 215,000-square-foot Siam Discovery Center has been renovated to appeal to customers aged 25 and up, and the 430,000-square-foot Siam Centre complex next to Siam Paragon has been renovated to target preteens and teens.
“Department stores in Thailand are here to last,” Bhicharnchitr said. “They have a good future.”