Thailand’s Latest Luxury Mall Central Embassy Opens for Business

 

BANGKOK–Thailand’s endeavor to be Southeast Asia’s luxury shopping hub got a boost with the unveiling of the Central Embassy, a 1.8-billion-baht ($554 million) project in the heart of Bangkok’s commercial district.

The Central Group, Thailand’s top department store operator and its largest family-owned conglomerate, opened the mall last week, shrugging off concerns about weak domestic consumption and fierce competition from popular destinations like Hong Kong and Singapore.

Bangkok already has a few upscale fashion malls, but the Embassy is being billed as Thailand’s first full-scale luxury mall. Around 30% of the brand name labels – Ralph Lauren, Tom Ford, (Yves) Saint Laurent and Pomellato jewelers – are opening their first stores in the country, much to the delight of designer-loving locals and tourists.

The mall was originally scheduled to be launched in March but the plan was delayed until early May because both the building and the shops needed more time to get ready.

Ongoing political protests have also played a part.

“When there were protests at the beginning of the year, we could not get access to the site.  So, obviously, no access, no construction,” said Chart Chirathivat, managing director of the Central Embassy who has been overseeing the project since its conception seven years ago.

Months of political turmoil over the leadership of Prime Minister Yingluck Shinawatra have badly dampened consumer sentiment, with consumer confidence hitting its lowest level in nearly 13 years in April.

Antigovernment protesters intent on ousting Ms. Yingluck have disrupted commercial activities in Bangkok for months, staging citywide rallies that shutdown streets in early February. Once the protests calmed at the end of the month, construction resumed.

Thailand’s political crisis continues, with the Constitutional Court ruled to remove Ms. Yingluck last week – just about the time the Central Embassy opened its doors. But Mr. Chart is confident that political uncertainty won’t impact business.

“This is not our first crisis and the Central Group has been around for almost 70 years,” he said. “We always believe in Thailand and in its long-term development and growth.”

Counting on local shoppers alone to fill the mall is not Central Embassy’s main aim.  It’s also banking on tourists who come to the country in large numbers and are willing to dole out big bucks for labels.

When it comes to being a leading shopping destination in Asia, Thailand remains disadvantaged compared with popular shopping Meccas like Hong Kong and Singapore. That’s largely because of import duties as high as 30-40%. Imported items are duty free in Hong Kong and most are in Singapore.

Mr. Chart says he believes Thailand’s position as a leading tourist destination, however, works in its favor.

“Tourists are already coming here for beautiful nature, the best and the cheapest hotels in Asia, Thai food and Thai hospitality, so let’s make them perceive the prices are reasonable here,” said Mr. Chart.

The Central Group is not the only mall developer with the goal of expanding Thailand’s shopping destinations. Its major competitor the Mall Group, which operates almost a dozen department stores nationwide, including the upscale Emporium and Siam Paragon in Bangkok, announced last week that it was investing 50 billion baht ($1.5 billion) in six new world-class shopping malls in Bangkok and the resort towns of Hua Hin and Phuket. – By Nopparat Chaichalearmmongkol