In my hometown of Vilvoorde, the potential construction of a large shopping mall (‘Uplace‘) on an adjacent piece of land has been debated for several years. The mayor opposes the project stating, amongst other arguments, the impact on congestion and local economy. A few conversations I’ve had with business owners in Nakhon Ratchasima today, revealed interesting parallels.
Nakhon Ratchasima currently has two large malls: Klang Plaza and The Mall. Klang Plaza started with a book store in 1958, opened up a shopping mall in 1972 and expanded to a second (much larger) mall in 1991, pictured above. The business grew organically with its environment. While a lot of Klang Plaza’s shop units are allocated to chains and large brands, the threshold is still low enough for local entrepreneurs.
In 2000, right outside the city center, The Mall opened its doors and immediately took over the title of largest shopping mall in Thailand’s North-Eastern region. Initial concern about the impact on Korat’s main traffic artery were not addressed, resulting in traffic congestion and pollution. The budget to resolve these issues runs in the hundreds of millions of Euros. Practical problems aside, the Mall was an instant success. The vast majority of its stores are branches of major corporate chains, but one floor is dedicated to small retailers.
The impact on Klang Plaza was visible, but all three locations were still relatively successful. Combined with The Mall’s brimming parking lot, this was a clear indication of spare market capacity, which wasn’t lost on two other major Thai mall operators. Both Terminal 21 and Central group are opening new (enormous) malls within two years. As a response, the Mall is building a huge extension.
Local businesses, especially located at Klang Plaza, are going for a land rush in the two brand-new projects. But here is the catch: only a very small percentage will be allocated to them. The new shopping mall operators favour large corporate chains. Chains operate on a much larger scale and are mainly concerned about the overall bottom line. It matters less to them if a small minority of locations isn’t profitable, brand presence is important as well. Therefore they are a much more reliable tenant.
With this example in mind, will Uplace eliminate commercial diversity, harm the local entrepreneurs, import problems and costs, but export the profit out of the region? Some food for thought.
Oh and by the way: am I really the only one who can’t help but reading it as Up-lace in stead of U-place, and pictures boots being laced up? #thinkingoutloud